Are management buy-outs a means of ensuring viable futures for established family businesses? Selling or handing over the family business will be one of the most difficult decisions a family will make and many different alternatives will have been explored. Neil Orford explains more. More often than not, management and employees hold the key. Their loyalty, commitment and knowledge of the core values of the business mean that they can become the natural choice as successors. The climate has never been better for the management team to take up the once in a lifetime opportunity of acquiring ownership of the business from its shareholders – the cost of finance is relatively low, venture capitalists have money burning holes in their pockets and company values remain at sensible levels. A Management Buy-Out (‘MBO’) works well for the vendors too. Vendors can test the feasibility of the buy-out before presenting the opportunity to management and they can sleep comfortably in the knowledge that their business will not be subjected to the commercially sensitive scrutiny of a trade buyer. There are a number of advantages and disadvantages associated with MBO’s and careful consideration needs to be given to these prior to proceeding down the route of one. Advantages of an MBO Management work in the business and therefore have an understanding of the operation and can make the MBO process easier Significantly reduced due diligence requirements Potentially reduced warranties and indemnities, reducing comeback against the vendor Some businesses/market sectors do not lend themselves to trade sales and therefore an MBO can be a way of exiting successfully. Disadvantages of an MBO Failure to complete an MBO can ultimately make the management’s position untenable Consideration received for a business by a vendor is typically discounted compared to what can be obtained when selling the company on the open market MBO’s often include some form of deferred consideration, which may not meet the immediate cash expectations of the vendor. The first concern of many managers who are given the opportunity to participate in a buy-out is ‘how much will I need to invest personally?’ In most buy-outs, the bulk of the finance required to fund the acquisition is provided by banks, asset funders, venture capitalists or the vendors. An investment from the management team is helpful in securing the funds required, not because of the size of the investment, but more importantly for external funders it demonstrates the commitment of the management team to the buyout. The buy-out process can be complex and the management team will have to accept that the financial gearing in the business, due to the external investment, will be higher and any funders will keep a close eye on progress. But if the management team are confident in their ability to deliver the plan and grow the business then their financial reward can be significant.

Families in business are unique. While similar to any public corporation competing in the market place, they are fundamentally different in one important and vital regard…their family. Dean Fowler looks at some of the challenges and how a family council might help. As owners and managers, family members – a passionate group – have the power to shape the future success of their family enterprise. The power and cohesive unity of a family provides a distinct strategic advantage to family enterprises – so much so that they outperform the Fortune 500 – with higher profitability, deeper personal passion in their products and services, and more “patient capital” provided by continued family investment in the business. A recent study of successful multi-generational businesses conducted by JPMorgan Private Bank, concluded that the cornerstone for preserving a family legacy across the generations was effective family governance – a process to balance the passions and ideals of the family with the goals and objectives of the corporation. I call this governance process The Family Council . The purpose of The Family Council is to nurture and sustain healthy family relationships while promoting responsible, committed and active stewardship of all the family’s assets including its legacy of values. For successful multi-generational family enterprises, The Family Council is the crucible in which the hard realities of business and the soft complexities of the family are blended into a coherent vision for the future. This ongoing process of creating cohesion and unity involves four major facets (ingredients) which are outlined below: Powerful vision — To maintain continuity across the generations, the family must develop and communicate the central values and purposes that empower the family legacy. The shared vision becomes the cornerstone for enhancing effective communication among family members to build strong relationships through trust and respect. For example, just prior to his recent death, Sam Johnson produced an extremely powerful movie that captured the core values of the business and the dynamics between himself and his father. One of my clients wrote a history of the family showing how the values of the founders have been embodied in the fabric of the family and the corporate culture of the business. Educational development — Future generations must be prepared for their roles and responsibilities as family members and responsible shareholders in the business. In addition, the competencies and strengths of family members must be nurtured through both formal and informal educational opportunities. For continuity, the spirit of stewardship of the family legacy and the family assets must be nurtured in the next generation. Beyond college or graduate school, successful families involve the next generation in the critical issues facing the business, or the family foundation, as a learning opportunity. Balancing family and business — The Family Council provides strategic level guidance to the Board of Directors and/or the management team on issues that impact the direction of the business or the family foundation. For example, how will the core values of the family determine the types of business ventures that should be pursued? During times of inter-generational transition, in particular, the family must lay the basic criteria for the succession process. Should a family member lead the company? The Family Council also establishes the basic rules and frameworks for managing the employment of family members in the business. Responsible ownership — As shareholders, family members must work together to create the necessary legal structures defining their mutual relationships as owners, as well as their appropriate roles in controlling the family business, foundation or other family assets. In addition to designing the primary frameworks for their legal shareholder agreements, including liquidity strategies, formal governance of the corporation, and commitments regarding future investment risk must be addressed for long-term success across the generations. The initial work of The Family Council involves the creation of a comprehensive Family Constitution in order to reinforce the family’s commitment to function as a family, to foster the growth of the business and to assure the ongoing investment in the future of their enterprise together. The family constitution addresses such topics as policies on employment, retirement, and compensation of family members; the purpose, vision and mission of the family; the core values of the family that are the ethical compass for the business; guidelines and procedures for decision making, and finally issues concerning stock ownership, liquidity, and family philanthropy. The ongoing work of The Family Council uses the framework of the family constitution to deal with the complex issues that emerge both within the family, and particularly, the dynamics between the family and its ongoing ownership in the family enterprise.

Haggis and Macsween are world renowned. We spoke to Managing Director James Macsween to find out more about the evolution of this family firm. The Macsween story begins with Charlie and Jean Macsween, the grandparents of James Macsween who is currently involved in the business who opened a retail butcher’s shop in Bruntsfield, South Edinburgh in 1953. Previously they had both worked at Orr’s, the well respected butcher and game dealer in central Edinburgh, which was where they met. Charlie was eventually promoted to store manager while Jean worked in the accounts department. Mr Orr’s business was very much ahead of his time, with segregation of raw and cooked meats, its own slaughter house and even a dedicated engineer to look after the fleet of vans. After the death of Mr Orr the company ceased to trade, so Charlie and Jean decided to set up their own business. Dedication and entrepreneurship was at the heart of the business with strong family values and Charlie’s customers at Orr’s remained loyal to the new business and happily travelled across town to the new shop. Word soon spread and within a few years adjoining space was purchased to accommodate the thriving business and growing workforce. ‘Charles Macsween’ vans were soon to be seen delivering quality meat to private and wholesale customers all over Edinburgh. Like all good butchers of the time, ‘Charles Macsween’ made a range of home-made products such as pies, sausages and the now famous haggis. The business quickly established a reputation for quality, a wide range of all meats and games and the friendly and knowledgeable service from Charlie at the butcher’s block and Jean in the office. The second generation – John and Kate Macsween John was Charlie’s eldest son and had always been passionate about the business. On the day he left school in 1957 he put his passion into practice and started working alongside his parents. Father and son enjoyed a great working relationship and jointly ran the business under the name ‘Charles Macsween and Son.’ John learned all the aspects of retail butchery while developing his natural abilities in the manufacturing potential of the haggis and other company products. When Charlie died in 1975 the business passed to John but dynamic and challenging times were to follow. The growth of the supermarkets started to threaten the independent high street retailers and less time was being spent cooking traditional family meals at home in the kitchen. Being the natural entrepreneur that he was, John and his wife Kate saw opportunity aplenty in the specialised manufacture of haggis. James explains, “Dad (John) met Mum (Kate) at 19 and were childhood sweethearts and they signed up for the same goals, a nice house, a family and a successful business and that is not only what they set out to do, they succeeded.” As James continues, “Dad worked tirelessly to build the business and his devotion to the family firm soon began to pay off.” A chance to present Macsween haggis at a Scottish food fair in Selfridges paved the way for sales across the UK. John’s innovation and acumen for product development saw the introduction of the first vegetarian haggis in 1984 and this was another decisive moment in the company’s continued expansion. Kate’s blue sky thinking and John’s practical ability proved to be a winning combination and soon the words ‘Macsween’ and ‘haggis’ became intertwined. John sadly died in 2006 after a life’s dedication to the business that he loved so passionately. As his numerous obituaries testified, he achieved a very special place in people’s hearts all over the world. As James continues, “He elevated the status of Scotland’s national dish and rightly takes his place as one of Scotland’s inspirational entrepreneurs.” The third generation – James and Jo Macsween John and Kate’s children, sister and brother, Jo and James joined the business in the mid-1990’s. When their father passed away in 2006 they both took on joint responsibility for running the business as it entered the next stage of its journey. Both grew up doing their homework in the offices of the butchers’ shop, inhaling the smells of matured meat and steaming haggis. During the holidays, they served the very particular requirements of Edinburgh’s Morningside ladies and thereby gained very early insights into the challenges and rewards of excellent customer service. On joining the business full time, working with John and Kate, Jo set about nurturing and building the brand, while James started to make operational and technical improvements, ensuring that their haggis was consistently brilliant every day. In 1996, this multi-generation team created the world’s first, custom-built dedicated haggis factory. Since taking on joint responsibility for running the business, Jo and James have driven an obsessive focus on making authentic haggis to the unique family recipe, concentrating on quality, product innovation, employee engagement and sustainability. Their successful microwaveable haggis and black pudding products are testament to this, launched to serve time-pressed customers who do not want to compromise on quality. The company embraced the digital age too and have taken a lead in sustainable management and reporting. The future James Macsween continues to champion and celebrate the haggis in all of its glory, and continued hard work and dedication to continually improve sees new products being brought to market too – Sausages and Gluten Free Haggis for example. As James explains, “Over the last twenty years or so Macsween has focused on excelling in the manufacture of haggis, and I think that the numerous awards and accolades that we have been awarded is testament to us continuing to achieve that goal.” James has the same passion for haggis and the business as the previous generations. “I genuinely love what I do,” he adds, “but am fully aware of where the business began and the fond memories that it provides from growing up in and around the business. I guess being involved in this family business has become instinctive, there is something about it being yours and having your name above the door adds to the pride, and helps keep the eye firmly focused on the business too. “ Working with your parents can be tricky but as James explains, “I never regretted joining the business at all, even in the early days when Dad and I ‘rubbed swords’ due to our similar personalities but at the end of the day it was business first and the business is essentially the common denominator for all of us anyway. The experiences have stood me in good stead and the entrepreneurial flair and dedication to the business and the underlying values have helped me become the person that I am today.” Macsween is undoubtedly a pioneering family firm being the first company in the UK to embrace microwaveable food technology and continuing to embrace opportunities both at home and abroad, where Macsween are hoping that the ban on exporting haggis to the US will be lifted. James, is however, aware of the heritage and history behind the Macsween brand, something that his own children have reminded him of from time to time, such as one visit to the factory when he was asked, “Dad, what are you doing here in Granny’s factory!” There are continued pressures on the business to grow and in order to do so there are plans in place to open a new, purpose built manufacturing operation in 2018 which will see all of the operation under one roof, with space to grow further too. As James adds, “These are exciting times for the business and the brand, but we remain true to our values and our roots, clearly identifying the family company origins dating back to 1953 on our packaging, and we’re proud of who we are a business. Not only is this a great point of difference but it also shows that we are a brand that is real and honest, and as our company strapline says, ‘trust us to be interesting.” A fine Scottish family firm that is continuing to push the boundaries and harness their reputation as manufacturers of fine foods and guardians of Scotland’s national dish.

Over time a Family Constitution can gain such moral weight that contradiction becomes unthinkable. Bryony Cove and Sonal Shah of Farrer & Co explain more. Family businesses are as old as civilisation itself. But family and business are not necessarily natural bedfellows. They operate under different cultural systems; family is safe and protective and business can be hostile and competitive which can create tensions between the two, particularly as a business expands. Wealthy families with businesses are beginning to recognise this tension and are fighting back, often through the use of a Family Constitution. Just as the constitution of a country tries to balance the different needs and visions of its people, so too does a Family Constitution in the family context. It can be named many things – family contracts, family charters, codes of conduct, mission statement, etc. Essentially they are all trying to achieve the same aims: To set out the family’s shared vision and ethos which underpins the conduct of the family business: To articulate the relationship between the family and the business including setting out how decisions affecting both will be made; To set out the mechanisms for the succession of the business and shared expectations of how family members should behave towards each other in the context of both the business and the family. Family Constitutions can be long or short, simple or complex and drafted either by family members themselves or professionals. They are personal documents and as such are not normally legally binding. However, over time a Family Constitution can gain such moral weight that contradiction becomes unthinkable. We find that families who run large businesses are often too busy to deal with what are often seen as “softer” issues such as communication and management of the family as part of the business. The idea of a Family Constitution is often dismissed as far less important than the everyday running of the business itself. However, the impact of having a Family Constitution can be significant. The process of creating one in itself addresses questions which may not have been considered before: Who should be involved in preparing the document? What issues should it cover? Should non-family members (such as key employees or managers) be involved? These questions can then lead to a dialogue which many families simply do not get around to having, often until it is simply too late. Without the pretext of a Family Constitution, important questions can go unanswered, for example: How important is the continuation of the business? Should it be sold in the future or retained for future generations? •How should the business be managed, both now and in the future? •Should there be regular family meetings? •Who is expected to do what, both within the business and within the family? Often, by the time families consider a Constitution, it can be too late. The catalyst can be the retirement or death of the founder of the business (usually the head of the family) or when serious disagreements occur such as over a child’s divorce or even prospective marriage. Passions can often run high and factions may have already appeared. The best time to embark on a Family Constitution is precisely when the need for one is not obvious – during a period of stability and harmony and when there is little or no conflict. That way decisions can be taken objectively and calmly and ensure that the procedures are in place and ready to be used before the unexpected event or disagreement occurs. Just as each family has its own individual dynamic, challenges and taboos, so each Family Constitution will be unique. Often the finished result is not the most important thing; it is the thought and effort that goes into creating it and the discussion this requires. However, Family Constitutions should be treated as living documents and families should be ready and willing to update and adapt it as circumstances change. Family Constitutions cannot prevent conflict; however the successful development of one often results in better communication and greater harmony within the family. Commercially, a Family Constitution can help ensure the success of the business and ensure its survival for future generations.

Here, we examine the ownership role in a family owned business in Asia – not the management or leadership role but the impact of ownership highlighting some of the ownership issues to consider, with the underlying assumption that there is a family objective of wanting to continue the business as a family business; and of keeping the business in the family across generations. When Does Ownership Start To Matter? If there is a full overlap between ownership and management, for example because you have a sibling partnership and all siblings work and own shares, then does it make sense in practice to think about a separate ownership role? It will probably make sense to think separately about the ownership role once you have future potential family member shareholders (e.g. the next gen) who are old enough to start participating in family meetings. The Patriarch Does Not Think About Ownership In overseas Chinese families there is a tendency for the first generation founder (“the patriarch”) not to think about the question of ownership. However at the same time there is a tendency to divide up ownership equally among the next generation. The first generation patriarch has never experienced a split between the ownership role and the management role, so the impact of such a split in roles may not be an issue that the patriarch is aware of. The patriarch may assume that the child who is going to succeed him in running the business (the future business leader) will enjoy the same degree of control that the patriarch has had. That the future business leader will have the support of the other family member shareholders is often something that is taken for granted. It may be assumed that if, for example, the eldest child is appointed as the next business leader, they can simply rule over their younger siblings because of family hierarchy. However in practice, after the death of the patriarch, younger siblings sometimes revolt! The next generation business leader will not enjoy the same degree of control and authority as his father had. Leadership Succession & Voting Control When you are thinking about who is going to succeed in the second generation as the business leader, one common question would be whether that future business leader needs to be given a bigger share in the company if not a majority vote. Another option to think through is whether to use voting and non-voting shares, apparently a common practice in the US. But You Can’t Ignore Relationship Issues However, these legal mechanisms do not rule out the need to think about the relationship issues. Even if you have a minority shareholder or a shareholder holding only non-voting shares, you can still have relationship problems that upset the ability of the business leader to lead the business. Just think of the example of Sally Bingham. In addition, research shows that (i) emotional commitment from shareholders matters in a Chinese family firm and (ii) shareholders who do not participate in management will have a different perspective than those that do. Maintaining the emotional commitment of the outside shareholders is an important concept here. If the goal is long term family business continuity it is clear you cannot afford to ignore the minority or the non voting shareholders. Stewards Or Inheritors In The Next Generation? Family governance expert James E. Hughes Jr., author of Family Wealth: Keeping it in the Family (Bloomberg Press), says that there is a threshold question in a Chinese family firm of whether the second generation shareholders see themselves as Stewards or as Inheritors. Stewards are happy to work together. Inheritors do not want to. Hughes says that you cannot convince an Inheritor to become a Steward. These two different archetypes just cannot work together. Can The Shareholders Work Together As Partners? The other way of expressing this is there is the important question that needs to be address of “Can the shareholders work together?” “Do they want to work together?” If they cannot – or if some of them cannot, is there an exit plan so that people can sell out without having a dispute? Redefining The Sibling Relationship After the transition from first generation to second generation, the siblings will need to learn a new way of working together as shareholders. There is a process of redefining the sibling relationship. To be able to work together successfully after the transition to the second generation, the siblings need to find a more participative, collaborative, decision making process. In an Asian family you will likely need the eldest sibling to lead this change in family culture. Relationships With Family Shareholders Matter Every family is different but at the very minimum, the family members who are running the business (in particular the successor business leader) need to make an effort to maintain good relationships and good communication with their family member shareholders. You might call this “family investor relations”. If you keep it at that level, with there being an objective of managing relationships well, this might lead you to think about doing work as a family shareholders group on communication and relationship skills. You could think of bringing in an outsider facilitator for training sessions. Family businesses after all are relationship businesses and relationships need to be maintained. You may think that the current relationships are on a good footing and need no maintenance work; but wait until there is a time of crisis and then see what happens to those relationships. Good Fences Make Good Neighbours If you want to have good relationships with the family member shareholders, how can you do this without having clarity around the rules of those relationships? How can you have a good relationship with a shareholder unless the role of the shareholder is clearly understood. There must be role clarity. Institutionalizing Roles To Meet The Long Term Goals If the goal is a longer term family business continuity, then this again points to the need to institutionalize the roles – which is what family governance is about in the context of a family owned business. If you have a long term goal, how are you going to address that goal just by thinking of it in terms of your current relationships? Accordingly a key question is: “Do you think it is just about managing the relationships – or should you be thinking about governance structures and processes so you can institutionalize family control?” If you have the goal of long term family business continuity, the conclusion is clear; you need proper family governance for your family business. Creating A Family Council The starting point for family governance would be to create a forum for owners to talk about ownership issues and to exercise their ultimate control. In practice this could be called the family council. One of the goals of the family council is to build family commitment for the business and to have the family members “speak with one voice.” In addition to the reasons given above concerning the need to have clarity around the role of the shareholder, the need to institutionalize that role, and the need to ensure that family shareholders remain emotionally committed, there is another good reason for establishing a family council. If the owners do not have a proper forum where their interests and concerns can be raised, the result is normally that the interests and concerns of the owners will be voiced in the wrong forum (e.g. the Board room) and can lead to family conflict. What Does The Family Council Do? One of the first tasks for the family council is to prepare a shareholders’ agreement, so that there is a clear exit plan. Alternatively the key details of the exit plan can be documented in the family constitution or a family policy. Another primary task for the family council will be to ensure that emotional commitment for the family business is maintained. How do you ensure emotionally committed shareholders? By involving them and educating and developing them – and by giving them a real voice. If they are essentially powerless, they will not participate. Family Policies To Address Predictable Problems In family business, here in Asia and elsewhere in the world, there are predictable problems. It is predictable that there will be differences of opinions between “inside” and “outside” family shareholders. (An inside shareholder is one who plays a management role. An outside shareholder is one who does not.) The simplest example of this is that inside shareholders may want to accumulate more profits for reinvestment while outside shareholders may want to maximize the dividend payout. Outside shareholders often complain they lack clear information about what is going on inside the business. Part of the ongoing role of the family council is talk about how you are going to deal with these predictable problems, and to find solutions (and document them in family policies or a family constitution) before they ever become actual problems. This is the planning and policy making process of a family council. How important is this planning and policy making? A study of some 50 South East Asian family firms concluded that the majority of Asian family businesses fail because of internal family feuds and conflicts (and not as a result of external factors). And most family business conflicts are role conflicts and are therefore predictable. What Is Involved In Forming A Family Council? When you form a family council you have to think about what roles it will carry out – what is its purpose – what processes it will engage in and what policies it needs. It involves a process of forming a group. Often the formation of a family council can mean the need to change the way the family shareholders make decisions and communicate among each other. It might also need to a need to change certain old practices. In short, often you are talking about making a change in the family dynamics. Accordingly the critical thing will be the implementation. About the Author - Christian Stewart helps enterprising families around Asia work together, by facilitating family meetings and as a process consultant, helping the family to develop their own family governance structures.

With more than five million family firms across the UK and a large majority of them taking a long term view, it is no surprise to see them looking to export markets to secure new opportunities to grow. Family firms that do export take the necessary steps to investigate opportunities fully prior to embarking on the decision to export, but with the current uncertainty prevailing around the brexit negotiations and potential US trade tariffs, it is likely that we will see more British family firms seeking to make the most of their opportunities overseas. Some family firms have been exporting for many years and we spoke to a number of them to gauge the importance of exporting to their businesses. Scotland’s largest producer of jam and marmalade, Mackays Ltd is best known for its household name brands – Mackays and Mrs. Bridges. Since humble beginnings in 1938, Mackays has remained true to making every jar of its marmalade, jam and curd in the authentic way. The taste is truly recognisable – a combination of delicious real fruit and the use of traditional techniques such as hand-stirring and the iconic copper bottom pans, which, like Mackay’s world-famous Marmalade, are Dundee-made. Fast forward to 1995 and the business was owned by United Biscuits. After a 27-year career with United Biscuits; Paul Grant – latterly the HR Director for McVities bought the business from his employer at a the time when they employed 19 people and had no branded products but was the last remaining producer of the iconic Dundee Orange Marmalade, in the Dundee area of Scotland, the home of marmalade. This key feature was used to build the business and its brand. In 2000 the “Mackays” brand was launch and Mrs Bridges was also acquired. Since then, Paul and his son Martin have grown the business and now employ a staff base of 180 local people and produces over 25 million jars a year; soaring from a humble 10,000 in 1995. Under the watchful eye of Managing Director, Martin Grant, the last seven years have seen the firm enjoy considerable success; both at home and abroad. With turnover increased from £6.8 million to £18.2 million since Martin took to the helm in 2012, the growth of the business shows little sign of slowing its marmalade and jam-fueled trajectory. With 30% of its sales coming from export, Mackays Ltd products are available in 80 territories worldwide, including far-flung reaches such as the Galapagos Islands and Japan. In the last year alone, business turnover grew by 7%, including an increase of 25% in export revenues. As Paul Grant confirms, “Exporting can be a fantastic opportunity and although it will complicate your business it can also create significant sales opportunities . One thing that is for sure, having unique brand and product features like those associated with our business, are key to profitable export success.” Another family firm with an eye on the export markets is Fracino which established in 1963 is a family owned and run business that is home to three generations of the Maxwell family. Founder Frank is the company’s chairman; his son Adrian is the MD, and his daughter Rebecca is the service support manager. Fracino is the UK’s sole manufacturer of cappuccino and espresso machines. Since launching an export arm in 2008 to take advantage of the weak pound, award-winning espresso coffee machine manufacturer, Fracino, now exports to over 70 countries via a 40-strong distributor network. Exporting is vital to the growth strategy and sustained success of the Birmingham –based family firm which produces almost 5,000 machines annually in a market traditionally dominated by Italian and Spanish manufacturers. International sales from distributors and global brands, including SUBWAY®, currently make up 25% of turnover and Fracino is on track for exports to constitute 50% of total sales by 2018. MD, Adrian Maxwell adds that “Our export vision has been underpinned by continued innovation and a multi-million pound investment programme which we’ve forged ahead with in spite of the uncertainties of Brexit. We’ve always looked further afield than Europe to maximise global opportunities and would urge fellow exporters to do the same. This strategy has brought 25% sales growth in the last 12 months from existing distributors in countries including Slovakia, Australia, UAE and Chile. We’re also making inroads in new countries such as South Africa and Taiwan which will help to drive our sustained success.” Environmental Street Furniture (ESF) is a Northern Ireland based, global designer and supplier of street furniture and site furnishing products. The company was established by husband and wife, Alan and Caroline Lowry in 2012 and after servicing the local market with street furniture products, the company set upon an aggressive export campaign to establish the ESF brand globally. Harnessing new innovation and technologies, ESF quickly gathered a reputation for offering unparalleled and never before seen expertise and with the launch of their ‘Style Collection’, a range of street furniture products for the themed experience attraction industry, the company had the opportunity to supply products to some of the world’s largest and most successful theme parks in the USA, Middle East and Europe. The themed attraction industry is now one of the company’s most successful markets. ESF Managing Director, Alan Lowry is aware that without the ability to export, the company would not be the success it is today. Alan said, “Having the opportunity to export makes us accessible to clients globally and as a result, we have seen significant growth in terms of the products we supply to an international market. We have been fortunate enough to work with clients as far away in Australia and United States of America, the Middle East and Europe as well as in the UK.” Alan continued, “We have received excellent support from Invest Northern Ireland and the UK Department for International Trade (DIT) to establish ourselves globally and this cements our position as a prestigious supplier to the international market. Our export sales have increased year on year and we want to continue this going forward, which is why we have a dedicated executive to lead and support our overseas export efforts.” In 2017, ESF had successfully secured business in 22 countries across five continents and this is something the company are intent on developing for many years to come. Some people assume that exporting is not an option for them whereas in reality, exporting is an opportunity that many family firms take up, and do very successfully, from all sorts of business sectors too. There are also some great UK family business exporters that really do help put the family business sector on the global map – take the likes of JCB, Walkers Shortbread, Macsween, Kinloch Anderson and The Morgan Motor Company to name a few. All family firms that succeed at exporting have clear strategies in place to minimise the risk and maximise the opportunities and it may sound obvious, but it is really important to do all the necessary due diligence and to seek appropriate advice before starting.

The story of Munchy Seeds dates back two generations in New Zealand to the days when a toasted two seed blend was the way for granny to get the kids nibbling on something nutritious. Now, settled in East Anglia with her husband, Paul Andrews spoke to Lucinda and Crispin about the evolution of their family business. As Lucinda explains, “Munchy Seeds began over 25 years ago in New Zealand actually, by my lovely mummy and sort of me! I had been demonstrating stainless steel Swiss potato peelers at exhibitions around the world for 8 years and came home when the family farm was sold. I had seen many different products being sold at various exhibitions and I knew we could come up with a product of our own that we could put our own personal, friendly, happy stamp on and bring it successfully to the market. Of all the lovely recipes we have in our family, Granny’s roasted two seed mix was to prove to be the most perfect of all.” “To begin with we roasted Granny’s seed mix in the kitchen at home and took them to the local Saturday Flea Market in Nelson NZ, encouraging folk to try the seeds sprinkled on bread & butter (because honestly who can resist white bread & butter!) And it just kind of took off! As the seeds became more and more popular, my parents started taking them off to shows and exhibitions around New Zealand. Never did it occur to us that they would become so popular and that 10 years later my husband, Crispin (boyfriend at the time) and I would have the same level of success here in England.” Munchy Seeds is a business built around the concept of healthy snacking together with a healthy way to revitalise meal times, with a range of products to suit a variety of tastes and uses. Lucinda has fond memories of her Granny’s concoctions and it is these mixes that fuel the essence of the business today. “Like all granny’s, my grandmother’s cooking was wholesome and honest; her fridge was laden with cold meats from the farm, salads and fresh veggies, homemade mayo, jams and sauces; the pantry was filled with cakes, slices, nuts, fruits and seeds. Granny had to learn to cook super-fast as a young wife on her husband’s family sheep farm. She cooked for the whole workforce including the Maori shearers (a ‘gang’ of 6 to 8 men and women who came in each year to shear the 2,000 odd sheep). The shearers delighted in setting nets in the lake on the farm, catching whopping great big eels for her to boil up for them (yikes)! Some of the eels they pulled from the lake were over 6ft long! In truth, they never ate the big old ‘grand-daddy’ eels (as we kids referred to them), because they were the breeding stock for the future and could live to be over 80 years old.” “Another odd ‘delight’ Granny used to boil up for the men, was the incredibly fatty, native Mutton Bird, that nested in holes in the muddy banks of the lake. (If you want to try this rather rich, fatty delicacy today, you would have to travel to the bottom of New Zealand – jump on a little boat and brave one of the roughest stretches of waters to get to Stewart Island where the local hotel still serves them up!)” “As small kids we spent the hot summers roaming across hills and flats (fields) in bare feet, catching insects, lizards, rabbits and little cocker-bullies (small fish) from the streams. We went everywhere with our glass jars with screw-top lids, turning and lifting stones and logs seeking out creepy-crawlies to bring home to show Mum, Dad & Granny, and any unsuspecting poor visitor who happened to pop in! Granny’s roasted seeds were just a part of our normal everyday diet, nothing very special at the time – but then again neither was smocked eel, mutton bird, homemade mayonnaise made with mint and condensed milk – it was just a part of a very happy, healthy lifestyle that my siblings and I were lucky enough to share,” continues Lucinda. Munchy Seeds were eaten like fresh cherries, grapes or sweets – “we would just have them as a treat or ‘when Granny had remembered to roast up some more, so they were quite special I guess,” continues Lucinda. “When we were sent off to boarding school we kept them in big biscuit tins for our tuck. They were brilliant because they lasted for ages and massively filled us up, except all our friends used to nick handfuls of them!” Both Lucinda and Crispin have embraced their business and encouraged others to try and taste their mixes. “Both our children grew up munching seeds,” adds Crispin. “In fact Claudia used to practically live in the factory when she was a baby, at 6 months old we would plonk her (position her carefully) on the work bench in her little bouncy seat beside us, as we hand-filled the tubs. She would help herself to fistfuls of seeds and loved them. I might add – she’s 16 now and won’t touch them for love nor money! Let’s wait until she’s a student with little cash!! She and her friends will be very grateful to receive her parents’ free Munchy Seeds!” “Oscar, being a 12 year old boy, will eat almost anything (within reason – as long as it’s not broccoli!) He is forever ‘fuelling up’ – especially now he’s started playing rugby. Refreshing orange segments served at half time with Honey Seeds aren’t a bad combination for a lad burning up energy in the mud and rain!” explains Lucinda. After the sale of the family farm in New Zealand, the business was born. “My parents have been roasting their Munchy Seeds in NZ for over 30 years now,” adds Lucinda, “and Crispin and I have been flat out roasting seeds in the UK for the last 19 years – it’s been a fun, full-on ride. One of the most exciting things for me is when young mothers come up to me at a show, with a child on their hip, and exclaim how their own mothers had given them Munchy Seeds when they were growing up. They’ll usually be grinning from ear-to-ear watching their own little ones stuffing seeds into their mouths flat-out – just as they used to! It is great to see the full circle with the next generation being introduced to seeds at a young age.” As a business, Munchy Seeds is all about the product which as Lucinda explains is essentially “something that between us, we produce as a fun, quirky little product that was given to us when we were carefree children by our special Granny and now we have the good fortune to be able to share that little bit of fun and wholesomeness with others! Munchy Seeds are for all ages and stages and shouldn’t be taken too seriously, but just enjoyed anyway, anyhow and with whomever you like!” Both Lucinda and Crispin have a positive work ethic and continue to invest in the business, building the brand, seeking new outlets for their products and creating new flavours too. It is also a business that is balanced as much as a ‘new’ business can be. As Crispin confirms, “a lot of our friends undertake the long commute daily into London whereas we have a short commute into the office, where we are in control of our own destiny though our business.” This business sets its sights high, having already made it on to the main in-flight service on Emirates Airlines and recently selling 1.6 million snack packs in a year but has a set of core values, many aligned to the family themselves that have evolved over time too. Values that are important to the business are Excellence, Efficiency, Team Work, Earnt not Owed, Communication and above all ensuring that Munchy Seeds is a ‘great place to work.’ With a growing team, now 18, the business continues to push the boundaries but as a family firm, personality is important, not just in the way they operate but in the brand too. “The brand really does represent our values, who we are and how we want to be seen,” continues Lucinda. “We are serious about what we do but want to make sure that we enjoy it too. Customer service is key and we are all about producing a great tasting product and making healthy eating fun!” The toasted seed sector is growing and every seed is crammed with natural goodness such as protein, fibre, iron and zinc and they are versatile not just as snacks but in the kitchen too – sprinkled over breakfast cereal, stirred in to soups, added to home made breads to name a few. Munchy Seeds, a family business that continues to create tasty little toasted treats!! For more information please visit www.munchyseeds.co.uk

A family business journey that has had its fair share of challenges but where determination has paved the way for success. Richard Healey Removals is a family business going places. In the last 6 years the company has significantly increased its contract business; quadrupled the size of their premises; diversified into new markets and amassed an impressive array of awards along the way. However, circumstance very nearly spelled disaster for this second-generation Ayrshire family business. Georgina Berry explains why. My parents instilled values in all of us that you should never give up no matter how bad a situation may be and that there is nothing in life that you can’t do if you work hard and stay determined. It was that determination to succeed that inspired my father, Richard Healey, to set up a removal business in 1965. Within a short period of time the company was fulfilling contracts with local authorities, prisons, and schools, eventually providing enough capital for him to apply for an operator’s licence, rent premises and employ staff. My brother Richard joined the business in 1994, the same day he left school. It was never in the plan for me to be part of the family business. A few years later, I completed my financial services exams and agreed to help out in the office for a few weeks to free Richard up so he could focus on growing sales. That was 20 years ago and I’m still here! For many years the business thrived but in reflection we were probably under resourced. We became too focused on servicing our largest customer and a little complacent in neglecting other important parts of the business. At the height of the recession, we lost our biggest customer. Finding ourselves in such a circumstance, to have unwittingly put all our eggs all in one basket, was gut wrenching. We thought we were finished. We had to work hard and re-invent ourselves to ensure the survival of the business. We developed a new marketing strategy, and started paying closer attention to the monthly figures and forecasts. We also started networking again and entering awards. That was six years ago and the hard work has paid off I’m glad to say. We have expanded into new markets including document storage, shredding and the destruction of confidential waste. In 2015 we moved into 120,000 sq ft premises, which has given us capacity to grow. Last year we became an approved training centre for the British Association of Removers, which means we can offer Driver CPC training as well as a variety of accredited courses including manual handling for care home staff, hospitals, colleges, and so on which we do here in Beith at our dedicated onsite training rooms and conference facilities. We have also sought external advice from Family Business Solutions Ltd (FBS) who have been incredible. Decisions like succession planning, delegation, and decision-making are more emotionally driven when it’s a family business and in my experience it helps to get an external perspective especially at times of change, uncertainty or when one generation is moving on or taking over the reigns of the business. Thanks to FBS we have also established better structures and processes that make people accountable for their own jobs, allowing Richard, Barry and I to focus on business development. We employ 34 staff and we have 4 apprentices working for us. We like to promote from within the business where possible, so that when someone comes to work with us they have a defined career development path within the company. Everyone puts in 100% effort and we all share the same ethos and constantly strive to improve our quality of service and reputation. It’s because of the family connection and our heritage that our team make an extra effort with every task they carry out. There are still challenges. Ayrshire is an area of high unemployment but removal work is hard work. It’s physically demanding and it’s difficult to attract the calibre of staff we need. The increase in minimal wages has also had an effect and contract work doesn’t have the same margins it used too. However, we have received wonderful support from North Ayrshire Council in areas such as marketing, tendering, and training, which in turn has played a pivotal role in us winning contracts with South Ayrshire, South Lanarkshire, and East Renfrewshire. It has been an eventful journey and there is still so much ahead of us, but we work well together as a family and at the end of the day I am enormously proud to say I that work for our family business.

Francis Kirk originated back in 1868 so this year sees them celebrate a major milestone for any family business, 150 years as a family firm that is now in the hands of the fifth generation. This business has continued to develop and grow over time – in terms of scale, turnover and profitability and has come a long way since the founding Francis Kirk launched the business as a tool shop 150 years ago with the simple aim of manufacturing a quality tool for workmen to use. The business was born in Denton in a small shed and although the business has moved, it has not gone far and Denton is very much at the heart of the business today. Each subsequent generation added their own developments helping the business move with the times, remain relevant at the time and to continue to grow. Thomas Kirk was the second generation to take the business on and he developed the company’s offering to include the stocking of tools and not just their manufacture, increasing the efficiency of the business and the speed of fulfilment of customer orders. Following the conclusion of World War II James Kirk came back from the war having signed up with his brother who sadly never returned. James returned with the bad news for the then girlfriend of his brother and vowed to provide for her as though she were family. In fact, the relationship bloomed and they eventually wed and became the next generation to run the business, the grandparents of the current Managing Director. The business took advantage of grants that were made available after the war for companies involved with projects to help rebuild the nation and the journey continued. The innovative and entrepreneurial spirit of the Kirk family came to the fore because already known for making tools, James committed them to giving fasteners a go too which continues to be a major component of the business to this very day. Innovation continued and the fourth generation, Francis Kirk, the current chairman, recognised that the world was changing with the introduction of the metric system and driven by his foresight, the business was the first in the UK to manufacture both Imperial and Metric socket screws. Recognising the world was continuing to change, fifth generation leader Tom Kirk has not shied away from making tough decisions either, decisions that came hard but were necessary to enable the company to achieve the next stage of growth. New products were introduced, strengthening the supply chain and service to customers; new products included clothing, PPE and abrasives enabling Francis Kirk to become the one-stop-shop for customers. Further change followed and in 2004, after 136 years of trading from the original Saxon Street Warehouse, Francis Kirk relocated to Denton Hall Farm Road where they are today. The acquisition of Pontefract based Philidas’ manufacturing plant in order to maintain full control of a specialist metal locking nut product followed. These products are sold into safety critical areas and as a result has enabled Tom to develop new international markets for the business. Since beginning over 150 years ago Francis Kirk has grown into a business with operations in the UK and overseas with a great reputation for what they do, operating from a purpose-built warehouse complex in Denton. As Tom explains, “Customer service is everything to us and when it is your family name above the door it means so much more. Each generation of the family has added a new dimension to our business that has helped us to grow, maintaining our core values at the same time.” Tom is also realistic about the way the business has developed, adding that “I am the first generation that has had to face the fact that the original core business of tooling is nowhere near as important to us as a firm as it was to my predecessors and it is the fastening business that is now our core trade.” Growth has been steady too and this is important to the family who pride themselves on financing their growth and development out of cashflow. Tom is also aware of the benefits of diversification and admits that the “move into PPE, abrasives and clothing has added new revenue streams and enhanced our service offering too.” As a family business leader Tom is unusual, young, in a very senior position and with an experienced head on his shoulders, one that to a degree belies his age. He is also incredibly respectful of his father and the part that he has played in the business, and the development of Tom as an individual too. As Tom explains, “Growing up we had a great life and a good education and in hindsight a really early induction into the business too. From the age of six or seven months I was placed in a box and brought into the office by my father and went home at the end of the day in a box too! Pre-school years were great fun too as I came to the factory and scooted freely amongst the boxes, something my young son now does himself although health and safety comes first much more than it did then!” Over the years, little known to Tom at the time his knowledge of the business continued to grow. By the ages of seven and eight he was coming to work with his father for a few hours when he could and then as he got older he had roles at weekends and in the holidays, much like other next generation family members gaining experience and earning money in the family firm. Knowledge was being acquired all the time, from products to the needs of customers and more besides. Education continued until an important day for Tom and the evolution of Francis Kirk. As Tom explains, “I was seventeen and sitting with Dad in the back of a car being driven to London to watch the FA Cup Final and was excited about the day ahead. Dad had a pile of files with him and it was strange as I was in the back when clearly I would rather have been driving. I now know that Dad had something on his mind.” As Tom continues, “I was a captive audience as we were driven down the M1. The question that followed was whether or not I wanted to come on board and work in the family firm. I said that I did and that was that! I asked what the files were and Dad said that they were an offer from someone to buy the business, something that he had been evaluating, but my decision changed that and we moved forward with our plans for the future.” “I spent three years at University which I now appreciate was to learn about the ways of the world – cooking, cleaning, washing – and this stood me in good stead when I returned to Denton. I had the respect of the staff for getting on with things and starting in the goods in yard I spent around three to four months earning each and every aspect of the business.” “One day, following the conclusion of what I had felt had been a good day at a national conference, I was talking to Laurence, the Sales Director and a key man in the firm then, and to this day, and he told me in no uncertain terms that I needed to grow up. At the age of 25 if I was serious about the business then I needed to step up and make it easier for my father to hand it over to me in due course, when the time is right for him.” Tom clearly took this firmly on the chin and has grown into his role and made some big decisions too. The business has won some global distribution rights, has acquired manufacturing operations in India and is securing significant orders from firms in the Middle East. As Tom is the first to admit, “Now it is all about repaying the faith that the family have placed in me and moving things forward. As a custodian of the business for future generations I have to explore all the opportunities as they arise. We have 26 employees and their families that depend on me to make the right decisions and they are my responsibility and I have my own family too, a son Raphael and a daughter on the way.” Tom appreciates all that his father has done and continues to do for the business as he remains Chairman and is a great ambassador for the brand too. As Tom concludes, “He can take a step back and enjoy life now and when the time is right there will be a transition of ownership. He leaves me to run the business on a day-to-day basis and given I am still young, it is up to me to steer the ship, something that I am relishing each and every day too.” There is a next generation but they are very young so the future is to be determined but this is an innovative family business that has been going for over 150 years, each generation has added their own mark and helped the firm to evolve, adapt and grow and it is now the turn of Tom to continue to develop this family firm as they set out on the next phase in their journey. Here’s to the next 150 years!

There are few sectors so closely aligned to our traditional idea of a ‘family business’ than baking, and few more mature markets than sliced bread. The Roberts Bakery company is both, and it’s also a great example of how a family firm can turn resilience and longevity into competitive advantage. The business was started by Robert Roberts back in 1887 as a small bakers and grocers, but by the 1930’s it was focusing on the bread side of the business, and making the most of new technology like bread slicers and wrapping machines. When a flour miller bought a share in the firm in the early ‘60s, Roberts was able to invest in a new bread plant and output rose from around 200 loaves an hour to approximately 1,500. By the early 1980’s business was so good that the family could buy out the minority stake and become an independent family firm once more. The current Deputy Chairman, Mike Roberts and his cousin Julia Roberts were already part of the business by then and have seen the company grow exponentially since, “By the late 1990’s we were making nearly a million loaves a week, and it’s double that now. We’ve gone from £1 million or £2 million of sales per year in 1976, to £94 million in 2016.” The company’s physical presence has grown too, from the back kitchen of its Victorian founder to a huge complex on 24 acres, which includes a brand-new facility which “future-proofs the business for the next few years”, and includes [two baking plants], a packing hall, slicing and wrapping, and despatch. And these days, it’s not all about bread, either. “Biscuits are big for us now,” says Mike. “Both commercially and literally – we make giant custard creams and bourbons that are four times the normal size. Our Little Treats business is really important to us strategically. It’s related to our core capabilities, but it’s also a different market from bread – the shelf-life is longer, the margins are higher, and the logistics are different, as is the consumer.” But bread is still in the Roberts’ blood: “We’ve explored pretty much every aspect of the bread business over the years, and we keep up with how consumer tastes are changing. We experimented with gluten-free as that looked like a growing segment, but it didn’t work for us – it’s very niche and surprisingly difficult and expensive to do well. Specialty artisan bread, on the other hand, has definitely been a success, and we’re constantly looking at new ways to make and sell our main staple, which is white sliced.” That ranges from new recipes and new production techniques, to selling frozen bread for export, making private label for distributors, and supplying the sandwich market. “We’re exporting to Europe, the US, and the Middle East, and though it’s still a small percentage of our sales right now, we’re looking to grow it.” Roberts Bakery has innovated in the running of the business too: “We’ve expanded our distribution by working with a logistics company, which has helped us get into around 400 supermarkets. We’ve put massive investment into infrastructure too, including more sophisticated order planning and processes, SAP for IT, and our first IT director. We’ve automated a lot of our plant as well – we have robots making biscuits these days.” Only around 3% of family firms make it to fourth generation and beyond, but fifth generation is looking good for Roberts. “I’m one of the fourth generation,” says Mike, “and we have around 9 people who could come into the business from the fifth generation. These days we’re more like a ‘cousins consortium’, in structural terms, but unlike many other long-standing family firms there are only seven family members with shares, and four of those are on the board. That could change with the next generation, but it’s a structure that works well right now.” “We have a non-family member, Robert Higginson, as our Chair, and he brings over a decade of experience at another family bakery business with him. We also have specialist advisers who aren’t on the Board, but who help us with HR, marketing, and pensions.” “As for the next gens, we tend to think that 30 is a good age to join. That gives people the chance to develop their skills, and make an informed decision about their career plans. We invited all the next gens to the last shareholders’ meeting, and the management team gave presentations about what’s happening in the business and where we want to go in the next few years. That’s the sort of knowledge they need to have if they want to work here, but they’ll also need it to be good shareholders. I think that’s a really important skill, and can get overlooked in family firms. But to stay in that magic 3%, that’s what you need.” This piece was featured as part of the PwC Family Business Survey and has been reproduced with their permission. Find out more about their services to family business here.

Paul Andrews spoke to Chairman Lizzy Rudd and CEO Dan Jago about their roles and what it is like to be running such a prestigious family firm as Berry Bros. & Rudd. Berry Bros. & Rudd is Britain’s oldest wine and spirit merchant, having traded from the same shop since 1698. Today the company also has offices in Japan, Singapore and Hong Kong, a Wine School and an exclusive fine wine and dining venue in London St. James’s. With over 320 years of history, Berry Bros. & Rudd is justly proud of its past. Over three centuries later, the family business continues to flourish, with its heart still very much at No. 3 St. James’s where some of the established traditions of those early years are still maintained today. In 1698, the company that we know today was started by a woman, a widow and a mother of at least two daughters with the surname Bourne. She established a grocer’s in the prestigious neighbourhood opposite St. James’s Palace which in that year became the official principal residence of the monarch. Her daughter Elizabeth married William Pickering and the Pickerings continued to run the business, supplying the newly fashionable coffee houses of St James’s under the sign of the coffee mill, which continues to hang above the door of No.3 to this day. Elizabeth continued to run the business after the death of her husband, succeeded by her two sons and upon the death of John Pickering, William Jr brought in a relation, John Clarke as his partner. In 1787, John Clarke’s daughter Mary, who had married a wine merchant from Exeter, gave birth to the first George Berry, who was destined to take over his grandfather’s business in due course. With 320 years of history and heritage behind them, stepping up to the helm is not an easy challenge, but it is something that Lizzy Rudd, Chairman of the family firm, is relishing, having taken over the role from Simon Berry in 2017. She is joined at the helm by CEO Dan Jago and together they are forging ahead. As previous generations of the family have testified, it is their attention to detail, willingness to change and constant innovation that has enabled them to succeed where others have not. Lizzy has fond early memories of the family business. As she explains, “my earliest memories are of visiting the shop at St James’s and being weighed on the famous scales. The scales were originally installed for weighing coffee, tea and spices back in the 1700’s when we were more of a grocery business, before it became fashionable in the 1800’s to weigh people!” “Back then, our side of the business was heavily involved with Cutty Sark whisky, so my parents were away a lot, especially to America. However, once a year, I would come to London and visit the shop at St. James’s to have lunch with my father. It is quite a childhood memory as it was always wonderful to come in and see the business. Whilst it was only a couple of times a year, it was enough to get a feel for how the business was part of our lives.” “Other than that, I was always aware of the appreciation my parents had for wine in our house and how lucky I was to be allowed to have very small quantities of lovely wines, often diluted with water, from about the age of 12. For my parents, as it is still for the business, it was always about quality rather than quantity, although on occasion my mother was known for admonishing my father for not producing quite the quantity needed for a good lunch!” At a young age Lizzy did not feel destined to enter the family firm; as a child she not uncommonly either wanted to be a vet or an astronaut, although ended up doing neither. As Lizzy adds, “I didn’t ever think about going into the family business and it certainly wasn’t encouraged – it wasn’t even on my radar; it was what my parents did. In many respects this was nice because there was never any pressure on my part, or for either of my brothers, to join the business, which isn’t always the case with historical family businesses. Perhaps there was some reverse psychology though because now we are all involved; albeit by our own design as opposed to being forced into it.” “As we look at how we might bring aboard the next generation, I think a lot about that fine line between encouraging and preparing them for it, whilst also giving them the freedom to make their own decisions. It is important to us that the business is on their radar so that if they are interested we will be there to give them encouragement and the training required to help them succeed,” Lizzy continues. Before joining Berry Bros. & Rudd Lizzy worked in some other businesses including a year in the City at a stockbroker’s, as well as completing a number of short internships. However, she soon joined the family business when somebody was needed to cover a period of maternity leave in the marketing department and from that moment on she began specialising in building the whisky brands. Roles followed that involved working in Spain for one of their distributors, plus a role at the spirits company, then named Hiram Walker, which subsequently became Allied Domecq and Pernod Ricard. Working in such an old and prestigious business can often be taken for granted when one has grown up with it but for Lizzy there are still new experiences. “Every time that we have someone new come into the shop or attend one of our events, I feel proud because I can see how ‘wowed’ they are by the experience. Our people – our customers, producers and employees – are a constant reminder of how special it is and that we have been going for such a long time. That is a wonderful feeling and keeps me grounded.” she adds. Lizzy chairs both the Board of Directors and the Owners’ Board. The Owners’ Board’s role is to set the vision and direction for the business from the perspective of the two families involved, Berry and Rudd, and also to set the decision-making parameters between the Board of Directors, the Owners’ Board and the family. Lizzy is also a member of the Family Council. As Lizzy explains, “My main role is making sure that we have a professional and effective Board of Directors and, working with our CEO Dan Jago, to help steer the business towards achieving its five year plan. It’s also about making sure that the family values and culture are retained and ensuring that as a business we find a balance between being professional and commercial, whilst also ensuring that our people feel valued, which is perhaps what makes a family business different.” “Within all of these roles, I am charged with ensuring effective and clear communication across all family members, shareholders and the wider leadership team.” Dan is the CEO of Berry Bros. & Rudd and interestingly has a family business background too. His father Tom created the well known drinks brands of Baileys, Malibu and Piat d’Or but it was not a simple entry into the family business world for Dan, who initially sailed in a different direction with a ten year career in the Royal Navy. Returning to London he was drawn to the wine sector and has stayed there ever since. Prior to taking the role at Berry Bros. & Rudd, Dan worked for a number of private wine merchants as well as Group Director for Beers, Wines and Spirits at Tesco. As Dan explains, “It was whilst I was at Tesco that I was approached about joining Berry Bros. & Rudd to help shape its future direction and I saw an opportunity to become part of an extraordinary family business which was impossible to turn down.” Running a family firm is not always easy and can present unique challenges but Dan relishes the opportunity. “For me, running a family firm is appealing for two reasons. Firstly, you have the freedom and the autonomy to make changes, both short and long term, with a high level of consideration and interaction from the owners, in a way one would not expect in a public company. Secondly, there is the benefit of having active ownership participation in the day to day workings of the business.” “We work with an extraordinary breadth of suppliers and customers worldwide and I am charged with being the go-between person whilst also helping my colleagues in the business. It is an incredible opportunity,” adds Dan. “As CEO, I run every aspect of the planning and operation of the business. We employ just under 400 people worldwide. My role is to coordinate the leadership team in delivering the overall objectives set to us by the owners, the two families of Berry and Rudd.” The relationship between Chairman and CEO is key, something that both Lizzy and Dan are in full agreement about. Lizzy appreciates that “for the success of the business it is imperative to have a good relationship between the two roles, especially when the Chairman is also representing the family members and shareholders. Dan and my relationship is crucial to the business and how we communicate is key.” As Dan adds, “Lizzy has taken over having a phenomenal knowledge of the history of the business. She therefore puts an enormous amount of trust in me to keep her informed about the day-to-day goings on in the business and the challenges and opportunities that we face.” “Our relationship is critical and like all good CEO/Chairman relationships, we maintain dialogue around all matters affecting the operation of the business. Fundamentally, Lizzy is always available to interact and support both the leadership team and the wider employee base, which is integral to the role of the family in the business.” Berry Bros. & Rudd is steeped in history and heritage but certainly has an eye on the future. For Lizzy, there is also the need to be cognisant of the generations that have been involved before her. “I wouldn’t want to be the one to mess it up,” she adds and “there is definitely a pressure, although it has to be balanced against the sense of continuity that comes with the role too. As ambitious as I am for the business, I understand that this has to be balanced with taking intelligent risks because we want the business to be here for another eight generations.” “As for me, I’m very keen to play my part in becoming a thriving, commercial and growing enterprise while keeping the ‘eccentricities’ associated with being a 300-year-old family business. I also believe it is important to step down as and when there is someone in the next generation ready to take over, as opposed to staying in until I’m ancient, which is a common feature in family business, and indeed my own family previously,” she adds. For Dan, balancing the requirements of the family with those of the business is certainly one of the more challenging parts of the role. “At Berry Bros. & Rudd we are lucky to have the needs of the family made very clear as a result of the management structures in place. With the main Board and the Owners’ Board, we understand the long-term family objectives and desires very clearly and make sure we deliver against these.,” he adds. Over the next five years, they are looking to grow the business in the UK and internationally, and to be open to exploring new areas of the business. For Lizzy, there is awareness too. “We are in a world that is changing rapidly and we need to be very aware of that and think what might impact us, such as changing drinking habits of the millennial generation. We need to make sure our brand is strong and that we can provide excellent customer experiences and service. In addition, I would really like to see us driving the business to think about ‘profit with purpose’ and our role in the communities and sectors we engage in,” she concludes. For Dan the future is equally clear, “I have probably got one of the best jobs in the entire wine and spirits industry and therefore see myself staying put for as long as I’m delivering the objectives of the family. In five years time I would like to see the business being an even better version of what it is today.” “My job is to make the business fit for the next 300 years by combining history and heritage that the business has with the spirit of innovation and excitement that surrounds it. The scale of the future has no boundaries, but we need to make sure everything we do is a true reflection of the brand and the expectations of the customers. We will continue to grow, steadily rather than urgently, delivering a sustainable secure future for the next generations to come.” “I think the uniqueness of the family business model compared to the public or corporate model is becoming more apparent too, with the pressures on short term results increasingly viewed as leading to undesired long term consequences and the ability for a family to make the right decisions for the long term security of the business is a significant advantage. The advantage of Berry Bros. & Rudd is that despite being eight generations old we still celebrate the uniqueness of being a family business and presenting the business as such remains a key point of difference and a great differentiator,” he concludes. With the final words, Lizzy sums up by adding “I believe that family businesses have a shared mentality which is based on taking a long term view. Everything I do today is about investing in the future. I’m here as a steward to do as much as I can to grow the business, to make it even better than it is already, in order to pass on a stronger business to the next generation. This is the real driver that I see in being a family business.” Berry Bros. & Rudd is one of the oldest family businesses in the UK today. The company’s willingness to embrace change, innovate, look for new opportunities and focus on clear governance and communication is something that has evolved over time and should stand it in good stead for the future, enabling it to continue to act as a great ambassador for the family business sector, not just in the UK but globally too for generations to come. To find out more please visit www.bbr.com

The Wates Group is over a century old, and one of the country’s most prominent family firms and has evolved over time as it continues to build for the future. Over that time, it’s evolved to match the evolution of the construction industry, moving from building suburban terraced homes in the 1930s, to developing construction services in the ‘50s, to volume house building in the 70s and 80s, to the business model it has today, which spans construction, property investment, and housing maintenance. All of which sit alongside a renewed interest in housebuilding. As Tim Wates says, “Over the years we’ve had to reinvent ourselves more than once. What’s always held us together is the ‘family factor’ – that’s what’s given us continuity, which is especially important in an industry that’s as cyclical as this is.” The stability of the family ownership structure helped the Wates business weather the downturns – even the severe recession of the 1990s – and learn the lessons of those challenges. “We realised that we’d been too highly geared, in an effort to achieve more aggressive growth. These days we aim to grow more sustainably and keep the gearing at more manageable levels. The overall objective is to be ‘cycle resistant’. No-one can be cycle proof, that’s impossible, but you can have strategies and be structured in such a way as to make you more resilient. That’s what we’re aiming for. We want to be a top-notch business in the built environment – substantial, ambitious, and sustainable. That’s the bottom line.” ‘Keeping it in the family’ remains important too. “We’re looking 15 or 20 years ahead, at the sort of business we want to hand over to our children. We need an outlook and a corporate structure that’s flexible enough to adapt to new trends, and could allow us to change direction if that’s what we decide to do. We’re also looking at how to manage the family wealth, but also to support our children, whether that’s into a career in Wates, or not.” “We don’t expect any of the next generation to come into Wates and be Wates their whole life, without exploring what else might be out there. We wish to create opportunities for the whole of the next generation, so they can determine their own path, and become entrepreneurs, if that’s where their talents lie.” “We’ve looked at what other families do, and we’re clear that this has to be the right thing to do. It’s all part of developing a ‘professional ownership’ mentality, rather than a ‘running a business’ mentality, which I think all family firms need when they get to this size and stage of maturity. Values are a key component of that – we have values that we consider are the values of family ownership, which relate to but aren’t the same as, the corporate values of the group.” Wates also has a family council, and the younger generation will be encouraged to participate in that. “Though that, in itself, creates challenges. Sitting in a council meeting alongside the very experienced older generation can be daunting if you’re only 20 or 21, so we’re exploring ways to introduce them to it gradually, and build their confidence. The council is really important to us as governance mechanism, so getting this right is key.” “Looking ahead, setting the right corporate strategy for the long term is a big challenge for us, and in a family firm you also have to be mindful of the day-to-day challenges of working together. We do work together well, but you can’t allow yourself to get complacent, and as time goes on and the number of shareholders grows, it gets harder. That’s why regular, respectful communication is absolutely critical.” Tim’s advice to other family firms? “Don’t rely on friendship and love to get you through – if issues arise get stuck in and address them properly. And if it helps, bring in professional facilitation.” This piece was featured as part of the PwC Family Business Survey and has been reproduced with their permission. Find out more about the survey here.