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in association with

GEN_NOV11_LIVE_COVER.indd 1 01/12/2011 11:56

Working with you

to put your Family First.

KPMG can help family entrepreneurs

take their business to the next level

For more information contact [email protected] kpmg.co.uk

© 2011 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member

firms affiliated with KPMG International Cooperative, a Swiss entity. The KPMG name, logo and “cutting through complexity”

are registered trademarks or trademarks of KPMG International.

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contents

opinion

upfront

meets

focus

Scotland’s finest

expert

prosperity

panel

review

24

Letting Scottish family businesses flourish

News and highlights from the world of UK family business plus coverage of Family Ties conference 2011

Behind the scenes with Michel Roux Jr, Help for Heroes, Swarovski, Brandauer and Flemings

Insights from the professionals on property and marketing

Celebrating this country’s rich family business community

The professionals talk art, non-family employees, next gen and entrepreneurialism

Discussing family offices, social investments, ethics and online security

Our experts are in the hot seat to answer your burning questions

Recommended reading from our family business library

Under the skin of Helen Thomas from Westons Cider

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Generation Creative Team: Creative Director: Anita Brightley-Hodges [email protected] Head of Design: Colin Fielder [email protected] Designer: Eddy McCabe [email protected] Photogaphers: Jeremy Baile RGB Digital [email protected], Nick Gillott [email protected]

2 Generation Autumn / Winter 2011


editor’s letter

“Family businesses are continuing to make the headlines for all the right reasons.”

2011 has been a difficult time for many companies and family businesses have not been exempt, although they are increasingly being recognised for the contribution they are making to the UK economy during this difficult situation.

We are by no means ‘out of the woods’ yet and the ongoing issues in Europe are certain to continue to have an impact into 2012 and possibly beyond. But life goes on and family businesses need to focus on their businesses now, possibly more than ever before, and plan to ride out the economic uncertainty and move forwards.

Having said that, family businesses are continuing to make the headlines for all the right reasons and in this issue we are delighted to showcase the winners of the 2011 Red Ribbon Awards and to review the recent Family Ties Conference.

A great event, superbly attended and a must for the 2012 diary.

In this issue we have the pleasure of featuring some great family businesses including Swarovski, Help for Heroes and William Purves and are particularly delighted to highlight the culinary delights behind the Roux family, where food is definitely in the genes! We also turn our regional focus to Scotland, where family businesses come in all shapes and sizes.

As well as stories from family businesses themselves, professional advisers highlight many topics which affect those responsible for family wealth including how to set up a family office, responsible investments and business ethics, in the ‘Prosperity’ section of the magazine.

We hope you enjoy reading the latest issue of Generation and, as the year draws to a close, wish you all the best for 2012.

SURVIVING IN TURBULENT TIMES

PAUL ANDREWS, EDITOR-IN-CHIEF

Season’s greetings


contributors

Subscription and Advertising enquiries: [email protected] / Editorial enquiries: Amalia Brightley-Hodges [email protected] Production enquiries: Anita Brightley-Hodges [email protected] / Designed by ‘Brightley-Hodges Associates’ www.brightleyhodges.com Published by Family Business Place www.familybusinessplace.com ISSN 13644776

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1. Paul Andrews, Editor-in-Chief Generation and Family Business Place 2. Amalia Brightley-Hodges, Features Editor

Generation and Family Business Place 3. Martin Stepek, CEO Scottish Family Business Association 4. Grant Gordon,

Director General Institute for Family Business 5. Jeremy Baile, Director RGB Digital 6. Gary Martin, Managing Director

The Martin Group 7. Anita Brightley-Hodges, Managing Director Brightley-Hodges Associates

8. Rob Tavernier, Managing Director Greedy Media 9. Kevin Chambers, Managing Director Contact Limelight

10. Ken McCracken, Director Family Business Solutions 11. Gary Deans, Head of UK Family Business KPMG LLP

12. Steve Rosenbaum, Independent Family Business Consultant 13. Duncan Berntsen, Architect 14. Bryony Cove,

Partner Farrer & Co 15. Richard Lane, Partner Farrer & Co 16. Lisa Sharpe, Curator One Alfred Place 17. Rupert

Phelps, Director BNY Mellon 18. Silja Nyboe Anderson, Ambassador Big Issue Invest 19. Simon Webley, Research

Director Institute of Business Ethics 20. Jonathan Lidster, Director Global Partnership of Family Offices

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www.familybusinessplace.com



opinion

www.sfba.co.uk

A Scottish Government survey of tens of thousands of SMEs in Scotland in 2009 revealed that a massive 73% described themselves as family businesses. A few years earlier Professor Peter Rosa at the University of Edinburgh’s George David Chair in Family Business & Entrepreneurship researched Scotland’s hundred largest privately-owned businesses and found that 41% were family-owned. He then extended his research to the top 250 and found a similar result. 43% of these were family businesses. These figures are of course in keeping with the UK, EU and global statistics, but even so they are remarkable.

Estimates gleaned from extrapolation of Scottish Government figures suggest that 45% of GDP

in Scotland and 50% of the private sector workforce are created and sustained by its family businesses. This makes family businesses the largest economic player in the country, and surely one of the critical pillars of Scottish society.

Scotland has some world-leading family business

brands: William Grants & Sons, Tunnocks of Carmel Wafers fame, Baxters, Walkers Shortbread, plus UK leaders like Arnold Clark and Stagecoach. A veritable forest of powerful and robust family businesses have sprung up around the oil industry in Aberdeen, whilst hundreds of local or regional bakers, confectioners, meat and

dairy farmers are household names to the communities they serve.

All seems well. But of course we know that family businesses have an inherent tendency to implode, especially around time of succession. The Scottish Family Business Association (SFBA) was set up in

ALLOWING FAMILY BUSINESSES TO FLOURISH

2006 as a charity whose mission is to make family businesses aware of this potentially fatal issue, and to bring the world’s leading thinking and practices on governance, communication, leadership and relationship-building specific to family business to the 85,000 businesses that need our help.

This is easy to write, but somewhat harder to achieve. Why? Because it is often incredibly difficult to bring the family together to explore in a calm, facilitated way, sensitive issues such as who should be the next MD, rivalry between siblings and autocratic parents. To help facilitate good governance practices SFBA train and educate advisors to family businesses, journalists, academics and university principals, and members of local and Scottish government.

But so much still remains to be done before Scotland has the

infrastructure and culture of support and expertise that our fantastic family businesses deserve. Family business is still an almost invisible term in our business, law and finance degrees at university, which is an absolute scandal. Similarly our governments at all levels still work under a false paradigm that The Apprentice or Dragons’ Den type of business start ups, FTSE stock-listed public companies, and inward investment is what really constitutes our economy and the pathway to economic recovery and growth. It is frightening when our elected government has such a glaringly obvious blindness to the importance of family businesses to the economy and society. Most lawyers, accountants, wealth advisors and bankers in Scotland still have no idea how to help family businesses in a long-term, holistic way. Worse, they would deny their ignorance and tell you that they have advised hundreds of family business clients over decades. We know this because we help these families heal after the carnage caused by wrong advice.

So what do we, the Scottish Family Business Association, intend to do about this? Well, we are at present raising funds to create a free family business mentor scheme throughout the country so that all of our family businesses can access local properly trained and educated advisors who can help the families move forward through their challenges and thrive, as families and as businesses, as a result. Our family businesses deserve our help.

Martin Stepek, CEO of the Scottish Family Business Association tells us why it’s important to offer support and advice to the family businesses of Scotland.

“It is frightening when our elected government has such a glaringly obvious blindness to the importance of family businesses to the economy and society.“

“45% of GDP in Scotland and 50% of the private sector workforce are created and sustained by its family businesses.”


Andrew Webb has also included Macknade Fine Foods in his new book Food Britannia, a wonderful ‘Who’s Who’ of the foodie world, recounting his year long trip around the gastro hot spots of the UK. Andrew visited the shop as part of his food odyssey last year.

“…Renato and Patricia Cuomo run the produce pleasure-palace that is Macknade Fine Foods.” (Andrew Webb, Food Britannia, 2011).

upfront

Cider maker H Weston and Sons, from Much Marcle, near Ledbury, has been named the top business in two counties.

The family firm won the overall business of the year category at the Herefordshire and Worcestershire Chamber Business Awards, which were held at a gala evening in the nave of Worcester Cathedral.

The event was a celebration of the success and achievements of businesses throughout the two counties with this year’s awards

having the theme of business heritage.

Helen Thomas, Managing Director of Westons, said: “We have been in business for 130 years and to build on our present foundation it is really important that we develop and encourage our people.

We are so proud to have won these awards. It means a lot to us and we want to be around for many years

to come.”Mike Ashton, the chamber of

commerce’s Chief Executive, said: “Businesses in Herefordshire and surrounding areas are making a significant contribution to the growth of the economy. The standard of entries was exceptional.”

www.westons-cider.co.uk

Macknade Fine Foods have been celebrating their recent recognition as one of Kent’s finest family businesses. Macknades are hugely proud to have been selected by The Independent as one of their 50 Best Farm Shops in the UK.

Panel member, Lulu Grimes (the director of ‘BBC Good Food’ magazine and ‘Olive’ magazine), was very generous in her praise:

“This huge food hall is more than just a farm shop.” “It is more of a fine food emporium.”

Journalist and food adventurer

Dutch lingerie manufacturer Van de Velde has announced that it has acquired a majority stake in UK lingerie retailer Rigby & Peller.

Van de Velde paid £8m (US$13.2m) for an 87% stake in the company. The Kenton family, which previously owned the company, will retain a minority stake in the business and will “have a role in carrying it forward”, said Van de Velde.

The retailer, which has held a

Westons On Top

The finest in Kent

Rigby & Peller take a back seatroyal warrant for over 50 years, was founded in 1939 and was bought by June and Harold Kenton in 1982.

Commenting on the sale, June Kenton said: “It was important for us to choose a company that shared the same values and vision as Rigby & Peller. It is a privilege to sell the majority stake to Van de Velde, who, like us, are a family-oriented company and appreciate the value of heritage whilst looking to the future for growth and success.”

30%of UK GDP comes

from family businesses

www.rigbyandpeller.com

www.macknade.com

“


upfront

She’s not old enough to appreciate it yet, but Harper Beckham has already been given her first luxury item – an £800 custom-built buggy and carrycot designed to match her nursery from family-run business iCandy. And although footballer David and his fashion-designer wife Victoria are worth £165 million, the bespoke ‘Poshchair’ did not cost them a penny – it was a gift from the British family firm that made it.

“iCandy have created a bespoke model of the Peach stroller for Victoria and David. iCandy is passionate about its British heritage with the family business dating back to the 1930’s.” said a company representative.

iCandy are a British family business that dates back to the early 1930’s. With almost 80 years manufacturing pedigree and expertise that has been passed down to their 3rd generation of family, the current generation, brothers Bradley and Warren are now entering their fourth decade of manufacturing children’s safety products.

iCandy unveil ‘Poshchair’

Merrythought Ltd in Ironbridge is the last surviving teddy bear factory in Britain, where toys are hand made. The 80-year-old firm will produce a range of traditional limited edition mohair bears for the London 2012 Games.

Sarah Holmes, great-grand-daughter of the company’s founder, said they were delighted: “It’s great the official teddy bear’s being produced in the UK. It’s important for our business to be involved in a national event like the London Olympics.” The firm’s Managing Director Oliver Holmes said it was a “significant milestone” in the history of Merrythought.

A cult following in Japan has been an important factor in Merrythought’s success and according to Sarah Holmes they would be busy without the Olympic contract. She added however that the licence was “a great string to our bow.”

An Olympic achievement

Opening doors to 2012Renowned family business, H. Forman & Sons have opened a new hospitality venue which claims to be the closest venue in London to the 2012 Olympic Stadium.

Overseen by Managing Director Lance Forman, the venue boasts incredible views and the talents of Executive Chef Lloyd Hardwick, who trained under the Roux Brothers.

Lance joined Forman’s in 1994 as the fourth generation and has developed the business, pioneering the growth in speciality British food, through the launch of Forman & Field.

His battle with a former Mayor of London over the compulsory purchase of the Forman’s factory led to the development of new premises, venue and restaurant – Forman’s Fish Island – in record breaking speed. It is the closest venue in London to the 2012 Olympic Stadium.

If you have an exciting

piece of family business

news just give us a call

and let us know.

We could feature you

in the next issue of

Generation and on

www.familybusiness

place.com

Contact:

press@familybusiness

place.com or phone

01732 220 120

www.icandyuk.com

www.formans.co.uk

www.merrythought.co.uk


eyebrow running head

For all the latest news, views, features, recipes and more besides...• Marcus Wareing, Rick Stein,

Michael Caines & Adam Byatt

• School food for the future

• Sustainability

• Seasonal produce such as

beetroot and asparagus

• New products

www.thecommercialkitchen.co.uk


upfront

Family-run Stoke Park Country Club and Resort in Buckinghamshire has been awarded 5 Stars for Hotel Excellence by Quality in Tourism.

This accolade showcases Stoke Park’s commitment to the highest quality of accommodation and service, whilst constantly striving to exceed guests’ expectations.

Quality in Tourism commented, “Stoke Park is a stunning property offering the highest standards of hotel accommodation and leisure facilities complemented with excellent standards of food and service” and awarded Stoke Park an impressive 94% 5 star Quality rating.

With the Olympics just round the corner, and the hotel’s close proximity to Dorney Lake (rowing and canoe sprint) and to London, Stoke Park is the ideal place to stay and to entertain.

As Britain’s first Country Club, created in 1908 and voted within the ‘Six of the Best Golf and Spa Resorts in Britain’ by Sunday Times Travel magazine and ‘Five of the Best Sporting Hotels in the World’ by BA High Life magazine, Stoke Park has the perfect pedigree to relish the Olympic spirit.

Andrew Wylie, 38, runs a scooter and wheelchair sales, services and repairs business in Tynemouth. But now the family business of over 20 years is branching out, by stocking Harley Davidson-style mobility scooters and some custom designs of their own.

Mr Wylie said: “I’m planning on making an articulated lorry, and maybe a Formula One racing car.”

Recognising that scooters “tend to look the same”, Mr Wylie’s firm TravelAbility UK started looking into sourcing something a little bit different.

Mr Wylie said: “We ended up with a lot of accident-damaged vehicles that weren’t worth repairing, so we put all the good parts together and made something for fun.”

One scooter is designed to look like a Jeep, and there are plans are to make a racing car and a lorry “You could pimp it up

Stoke Park reaches news heights

1095 days ago, a family of fun loving people decided life was not exciting enough.

One day, one of the family decided to bottle an ancient (25 year old) recipe, believed to unlock the untamed riches of life and to see what would happen...what followed was a roller coaster ride for the family!

All of a sudden they were whisked away to far flung places across a Kingdom United with people yelping with joy at the taste of this bottled sauce!

Then one day, via the electronic mail fairy, a message arrived from the almighty BBC!

Three years of Mr Singh’s

Pimp My Scooterto about 20mph, but the legal limit for a mobility scooter is 8pmh on the road and 4mph on the path. It’s for people who don’t want to have something that looks disabled,” ends Mr Wylie.

UK businesses are family-run

Over 3 million

A short while later, the family were known all over the land after being seen by 4.5 million of their fellow citizens!

Excitement, opportunity, loss and gain ensued for the following year and a half, leaving the family dazed and confused. Until one day, during a gathering at their own tiny English castle they saw a light at the end of the proverbial tunnel and a prophesy foretold...

In the two-thousandth and twelfth year, it will be the time of Mr. Singh...

www.stokepark.com

www.travel-ability.co.uk

www.mrsinghssauce.co.uk

Please enjoy responsibly.

SIMPLY BURSTING WITH FLAVOUR

Look out for Henry Westons VintageCider with its distinctive taste which just bursts with the full flavour of apples.

You can find it in supermarkets,specialist shops, convenience storesor your local independent shop.

Alternatively the complete range is available from our online shop atwww.westons-cider.co.uk


upfront

THE owner of a family business celebrating its 30th birthday says keeping a traditional craft fashionable is the secret to her success.

The Quilt Room was opened in 1981 above a bookshop in Dorking High Street.

The business has moved around the town over the years but is now back in the old shop on the ground floor, with a purpose-built studio in the courtyard behind the building.

Owner Pam Lintott, said: “If someone had told me back in 1982 that I would still be running the Quilt Room 30 years later I would never have believed them. But here I am in 2011 celebrating a fantastic 30 years.”

Mrs Lintott’s daughter Nicky also became involved in the business seven years ago, and together they travel to America to sample materials and ideas.

The duo have since written six books about a product they found on one of their visits.

The books are being sold around the world and, while Mrs Lintott has now handed the running of the business over to her daughter, she hopes the passion of regular customers will keep the firm alive for some time.

She said: “Not many people can say that they have been in business for 30 years these days. But I think that as long as we are passionate about what we do and have a good team then, who knows, the Quilt Room might be around for another 30 years.”

30 years in the quilting business

www.quiltroom.co.uk

A rare RAF jet, which has been outside a family business in Herefordshire for more than 40 years, is up for sale to help secure the future of the shop.

The Supermarine Swift F4. WK 275, at Sheppards Stores in Upper Hill near Leominster, is priced at £250,000. Andy Sheppard said they would be upset to sell the jet, which was bought in 1968 by his grandfather.

His wife Karen said they were finding the current economic climate “very difficult” and the money would help. The family said it had not been an easy decision to part with the aircraft.

Mr Sheppard, 47, said the jet had been a tourist attraction over the years, but it also needed a good home because it was “crumbling away”.

According to the family, Andy Sheppard’s grandfather, Percival, bought the jet when he worked at the Gloster Aircraft Company.

Swift sale to help secure future

If you have an exciting

piece of family business

news just give us a call

and let us know.

We could feature you

in the next issue of

Generation and on

www.familybusiness

place.com

Contact:

press@familybusiness

place.com or phone

01732 220 120

www.sheppards-furniture.co.uk

Oldest UK family businessA butcher’s in Dorset has been named as the oldest family business, in the UK having started back in 1535 when Henry VIII was on the throne.

RJ Balson & Sons export sausages as far afield as the United States.

Current owner Richard Balson puts their success down to being “at the heart of the community. The shop is a meeting place, some people don’t even buy anything, they just want to come in for a chat. Coming to our butcher’s is an experience and a joyful one, we have a laugh and a joke and talk a bit of gossip, we’ve got lovely customers.”

Mr Balson said life had got easier in the years he had worked as a butcher – “My father always said his first job every morning was catching the horse. My job when I started out was pumping up the tyres on the delivery bikes. Now you just have to turn the key and start up the car!”.

Mr Balson’s 31 year old son, Billy, has recently begun working for the business and it is hoped that Billy’s son will continue the family trade.

www.balsonbutchers.com

are family businesses

65% of the UK’s

private sector

We understand family business issues to a T

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Hazlewoods will bring fresh and creative ideas to your family business. We will work with you to produce viable solutions, including plans for growth, tax efficient structures, corporate governance and succession planning.

Hazlewoods LLP is authorised and regulated by the Financial Services Authority

Call David Pierce on 01242 680000 or email [email protected]

17249 Mugs 297x210 AW Generation.pdf 1 08/04/2011 09:05

eyebrow running head


I recently read a magazine article about Pimlico Plumbers that really made my day. Over the years the press have branded us (and me) all sorts of things, including ‘Posh Plumbers’, ‘Britain’s richest plumber’, and the ‘celebrities’ plumbers’, all of which are great for business, no argument there! But when I saw that we had graduated to ‘Britain’s Premier Branded Plumbing Company’ – that in my book was the best compliment I think I have ever received, and it confirmed to me what I’ve always believed – that good branding is priceless.

Regular Generation pundit and business mogul

Charlie Mullins explains why strong branding

combined with a great professional reputation

is the key to his family business success.

UK (who always turn up when we say we will). The second part of the equation is creating a physical image, in our case it’s the Pimlico Plumbers logo which instantly reminds people of what the company stands for the moment they see it. Neither of the two parts works independently of the other. Great design in terms of your logo (and other advertising media) is a must, which is why I have my own in house marketing department, but so is associating in people’s minds the logo with what stands behind it – which is the tricky part, and takes time and effort. Wherever I go people are always telling me that they saw my vans here and there; in the street in Earl’s Court, parked at a customer’s house in Chelsea or outside Claridges. Every time someone feels the need to tell me that they noticed us, it confirms to me that all the hard work we put in on marketing the business is paying off.

www.pimlicoplumbers.com

upfront

The importance of branding

“WHETHER I’M WORKING IN MY OFFICE, OUT INSPECTING A JOB, OR MEETING POLITICIANS, CAPTAINS OF INDUSTRY OR EVEN ROYALTY, I’VE ALWAYS GOT OUR COMPANY LOGO

ON MY SHIRT AND TIE”

Obviously things haven’t always been that way. Back in the early 1970s when I first began working for myself, before I’d even started trading as Pimlico Plumbers, I didn’t even have my phone number painted on the side of my old van. In those days if I didn’t make an impression through sheer force of personality (and spectacular plumbing skills of course) then I would soon be forgotten. And even then I was probably remembered as ‘that cockney plumber bloke... what’s his name again?’ Not very helpful for getting repeat business in! It’s fair to say I learnt that lesson a long time ago, and since then I’ve been building the Pimlico Plumbers brand pretty much as a full time job. As far as I’m concerned if it’s good enough for all my engineers and office staff to live, breathe and of course wear the brand proudly at all times, then it’s good enough for me too. So whether I’m working in my office, out inspecting a job, or meeting politicians, captains of industry or even royalty, I’ve always got our company logo on my shirt and tie. There are of course two parts to a successful brand; you have to be recognisable and you have to stand for something. In our case it’s a quality job, from a professional, fully qualified tradesman, with the backing of the largest independent service firm in the


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Receive discounts worth over £150 in the first year alone!

The Family Business Place is a fast growing business aimed at delivering quality publications, events and recources to family business and their professional advisers.

We already publish the UK’s only bespoke family business magazine, Generation, run the family Ties Conference and present the Red Ribbon Family Business Awards.

Help us to continue to champion the cause by becoming a Friend of the Family Business Place and take advantage of the following added value benefits:

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• Access to exclusive products and services from other family businesses including Family sConstitution Books, fine wines, hotels and more.



upfront

With Government attention focussed on how to kick-start the UK economy the IFB was approached to help highlight the barriers to growth for family firms and how more can be done to support the sector.

Mid-sized Companies Growth Review

The IFB has been closely involved in discussions with both the Department for Business, Innovation & Skills (BIS) and the CBI, who have both been conducting reviews into how to stimulate growth in mid-sized companies (£25m - £500m turnover).

award of Government contracts and there was a call for improvements in the export licensing process.

The IFB also emphasised to the Government review team the unique issues that family businesses face that inhibit their growth, such as the need for better advice and assistance to companies planning for succession and the problems associated with transfer of ownership – with thousands of family firms facing such transitions each year.

The IFB is meeting the Minister for Business and Enterprise Mark Prisk MP to hear the outcomes of the review and discuss what actions can be taken to strengthen the ability of mid-sized companies to grow.

Family Business Stewardship

The IFB has produced a major piece of research on Family Business Stewardship - an aspect of business that reflects the unique strengths and enduring qualities of UK family firms. The report was launched at the IFB National Conference in Liverpool, this summer, which also celebrated the 10th anniversary of the association.

Jointly published with business think tank Tomorrow’s Company, the report sets out a practical model of stewardship for family firms and how this can drive improved business performance.

Among the characteristics of good stewardship are clear purpose, lasting values, a responsible approach to funding investment and a commitment to long-lasting employee and stakeholder relationships, all supported by stable leadership. We will be presenting the findings to the BIS Minister for Corporate Governance Ed Davey MP later this year.

APPG for Family Business Annual Reception

This autumn will also see the publication of the UK Family Business Sector report in conjunction with Oxford Economics. The report will chart the recent progress of the sector, demonstrating the powerful contribution that family firms have made during the recession by delivering stability to the UK economy. Its launch will be at the inaugural All-Party Parliamentary Group (APPG) for Family Business Annual Reception at the House of Commons, in November, with guests of honour The Rt Hon Dr Vince Cable MP, Secretary of State for Business, Innovation and Skills and Mark Prisk MP, Minister for Business and Enterprise.

The APPG is sponsored by the IFB and the reception will be an important opportunity for prominent figures in the family business sector to raise issues of concern with ministers, MPs and peers.

www.ifb.org.uk

A Voice in Westminster

This sector has a substantial number of family businesses and ensuring that mid-sized companies can grow and prosper is a key Government priority that is supported by the IFB.

This autumn the IFB arranged for a joint team of BIS and HM Treasury officials to visit some mid-sized firms in the West Midlands to listen to family owners.

The officials learnt during the discussions with owners about the barriers to expansion; the factors that constrained growth; and the keys to success in international markets.

Among the common problems highlighted during the visits was the slowness of local authority planning decisions, the difficulties of hiring skilled staff and the lack of Government support for businesses who wished to enter export markets.

Another concern was the difficulties mid-sized companies faced when it came to competing for the

T: +44 (0)20 7437 5050www.boodles.com


Peter Leach and Bella Hopewell, C Hoare & Co.

upfront

The hugely anticipated Family Ties annual conference 2011 exceeded expectations and was an incredibly inspiring and through-provoking day. For the family businesses in attendance, it gave them the opportunity to hear about life behind the scenes at some of the UK’s most successful and well-loved family businesses.

Family Ties is a must in the family business calendar so make sure you book your place at next year’s conference now –

www.familybusinessplace.com/familyties2012

Guest speaker June Kenton and husband, Harold.

Adrian Riggs, The Number Seven and Gary Martin, The Martin Group

Guest speaker - Sanjay Arora, Arora Hotels

Guest speaker - Sanjay Arora, Arora Hotels

Spears Wealth Management

Thank you very much for the most stimulating, interesting and enchanting conference. It was one of the best I have attended in the last couple of years.

BNY Mellon Asset Management

The Family Business Place team put on a truly splendid and inspiring conference yesterday. Quite the best I have ever attended

George Stevenson, Family Business Solutions with Andrew and Michael Donaldson, James Donaldson & Sons



upfront

Red Ribbon Award 2011 winners – TOP ROW: L-R James Burns, Help for Heroes. Trevor Reeves, House of Reeves. Barbara Gray, Clarity Stamp. George Stevenson (accepting on behalf of Martin Stepek), Scottish Family Business Association. Steven Oxford, Oxfords Bakery. BOTTOM ROW: L-R Helen Thomas, Westons Cider. Sarah Holmes, Merrythought. Lucy Marsh, Polly Greedy and Edward Bodenham, Floris.

Kylie Russell, KPMG Guest speaker – Paul Kelly, Kelly Turkeys

Conference lunch at The Royal College of Surgeons.

Family Ties 2012 will be even bigger and better, so book your tickets today!‘Family Ties’ annual conference is THE

conference for the family business sector and

has become a firm favourite in the calendar.

Register your interest in next year’s

conference online to ensure you receive the

early-bird discount once tickets go on sale.

Marc Stevenson, Stevenson Brothers and Elizabeth Sieff, Little Emperors

Register online www.familybusinessplace.com/familyties2012

‘12


a

MBII

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THE MANY FACES OF MICHEL ROUX JRGrowing up in a family business environment, the next generation often has a desire to do something completely different, but in the case of Michel Roux Jr he has ultimately followed in his father’s footsteps. Paul Andrews spoke to Michel about his culinary journey.

Photography by RGB Digital

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M ichel Roux Jr was born in 1960, seven years prior to his father and uncle opening Le Gavroche, and from an early age Michel

is the first to admit that working in the catering arena was pretty much a foregone conclusion. As Michel explains, “I was almost born in a kitchen and always wanted to be a chef. The smell and sound of sugar caramel cooking is the first vivid food memory that I have and I am sure is one that will always remain.” Family influences affect the career choices of many of us and being born into the Roux family led to significant culinary influences, although Michel was free to make his own decisions. Numerous family members were involved with food including his grandparents on both sides, his uncle and cousin too, as charcutiers, butchers, innkeepers and chefs.

At the age of 16, Michel began life as the Maître Pâtissier at Hellegouarch in Paris. Like many sons following a career in the same sector as his father, Michel was being trained away from the family fold and, as many chefs will attest, being a patissier enables a chef to truly learn their craft. It is here that Michel grew to appreciate the importance of selecting the right ingredients, getting the basic cooking skills right and paying attention to the detail of the finer product, core skills that are required by any chef, and the best chefs recognise that

“There can be drawbacks when family work together and it is sometimes fraught and not easy at all but when it comes together it is magical.”

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they remain important throughout their career. The next steps in what has become a great culinary career for Michel were three months in the kitchen at Le Gavroche, working for his father. It was a lowly commis de cuisine position but enabled Michel to learn more and more before gaining a further two years’ experience under Alain Chapel in France. Michel is the first to admit that “Alain was a big

influence over my career and helped to shape the chef that I am today”. Michel returned to Le Gavroche in 1992 before being called up for military service in France, which

consisted of catering for the Presidents of France at the Elysée Palace. The family business effectively changed hands in 1990 when Albert turned 55 and took the decision that it was time for his son to take over the reins and become the chef de cuisine at Le Gavroche. At the age of 31, Michel was standing in his father’s footsteps. Undertaking the same role as your father, especially a successful one, can be daunting for anyone. Michel is the first to appreciate this but found following in his father’s footsteps both inspirational and daunting at the same time. “It has certainly been challenging at times but we do love a challenge in the family” explains Michel. “There can be drawbacks when family work together and it is sometimes fraught and not easy at all but when it comes together it is magical.”

Michel continues, “I had big feet to fill as my father was world renowned but I was able to introduce new elements to the menu. My father was more traditional in terms of dishes and I was able to introduce a new era to Le Gavroche, mixing the new dishes with some of the traditional classics.

My father dined with us regularly and was always happy to share his thoughts on the food too.” Since taking over at Le Gavroche, the restaurant has continued to deliver fine dining experiences and received leading accolades from critics and organisations the world over. Michel is very appreciative of this but also believes that the values that the family have instilled in the business are part of the reason for its success. As Michel confirmed, “The customer is top of the most valued list in the restaurant and to ensure client satisfaction you need a team you can trust. From the manager to the cleaner, everyone has a part to play in making sure the reputation of the restaurant is maintained and this is part of the secret behind our longevity.” Hot topics in the world of food right now are sustainability and provenance, topics that Michel is only too aware of, and again help to contribute to the overall customer experience. Michel is adamant when it comes to the quality and availability of food. “Produce should be locally sourced where possible and I believe chefs need to make more of seasonal produce and that seasonal produce should be ‘rigeur’ for all chefs.”

“Seasons are my biggest inspiration and I always look forward to the next change of menu with this in mind,” confirms Michel. “Knowledge is king too,” continues Michel, “because the customer now wants to be sold a story about the food they are ordering and it is up to the chefs to provide that, which in turn can only be a good thing for small farms and local producers.” Food is definitely in the Roux blood, so what about the future? Michel continues to go from strength to strength and Le Gavroche is well established in the upper echelons of fine dining. With a daughter who is now training to be a chef in Lyon at the Paul Bocuse School, there is a next generation of Roux in the sector so it seems likely that the Roux traditions and association with fine food will continue into the next generation at least. As Michel concludes, “Hopefully longevity will prevail, through my daughter, as she is going to be a very talented chef. Of that I have no doubt.” www.michelroux.co.uk

“I was almost born in a kitchen and always wanted to be a chef”

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FROM PENS TO PARTICLE PHYSICSBritain’s family businesses form the bedrock of the UK economy and yet only a minority survive beyond the first generation. Amalia Brightley-Hodges meets John Berkeley, Chairman of sixth generation family business Brandauer, wholly-owned by the family that helped to found it back in 1862.

Many long-established family firms owe their existence to ancestors who came to this country as immigrants

and, thanks to hard work and an enterprising spirit, created a business of lasting value. Brandauer is one such company, founded by a citizen of the German Kingdom of Württemberg, supported by an Austrian and with the help of the grandson of a Frenchman who had fled to London in the 18th century to escape religious persecution.

By the time Huguenot refugee Jean Petit arrived in Birmingham in the 1780s, metalworking had been well established since the end of the 13th century. It was this long tradition, with the development by pioneers such as Matthew Boulton of mass production assembly line techniques in large 18th century ‘manufactories’, that helped lay the foundations for the city’s success as ‘the pen shop of the world’, with more steel pen businesses concentrated in just a few square miles than the rest of the world put together. C Brandauer & Co was one of these, quickly establishing an international reputation for quality and innovation.

“Inevitably, the company has had to evolve over the past 150 years, adapting to changing circumstances and embracing new technologies. However, the heart of the business remains unchanged. It was

founded on engineering skills and so it remains today, with an annual output of more than a billion high-precision metal components for a wide range of customers, from medical and healthcare, to telecoms, electronics and renewable energy sectors,” explains John.

With well over a hundred fifth and sixth generation descendents of the founding family, Brandauer faces many of the same challenges as other long-established family firms. John says “Sustaining family involvement can be difficult, even where the nature of the business is such that a wide variety of talents can easily be put to good use. However, when a company’s entire raison d’être is based upon highly specialised skills and knowledge, it may prove impossible to rely upon the family alone to provide its key manpower resources.”

above: Founder Joseph Letiere Petit and his partner Karl Heinrich Immanuel Brandauer.

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Brandauer accepted this long ago, with its first non-family appointment to the Board back in 1952, and had a non-family Managing Director from 1959. Today, the need to separate family ownership from professional operational management is at the core of its present two-tier structure. A four-person Family Board controls a holding company, providing the overarching long-term strategy and setting the key standards and targets for the operating company, which is headed by a Management Board comprising three Executive Directors and the Company Chairman.

Whilst at first sight this might appear unnecessarily complex for a £10m turnover business, it is a structure that seems to suit Brandauer, that recognises the distinction between family stewardship and operational effectiveness, with the Family Board defining the overall vision and values of the Company, but leaving the Executive Directors free to manage the business as efficiently

as possible and accountable for delivering on the key measures of performance.

When John, whose wife is a great-great-granddaughter of the founding member of the Petit family, joined the holding company board 18 years ago, the only reference to corporate values was a document dating back to 1862 stating that the company would be “governed by the principles of frugality, order, confidentiality, carefulness in granting credit, the prompt demand of outstanding amounts and the similarly prompt satisfaction of received liabilities.”

Whilst those founding principles have served the business well and contributed to its survival, the current statement of Vision, Values and Strategic Goals was arrived at by a process that would probably have been anathema to the founding fathers, with the emphasis very much on consultation and consensus, both across the family and amongst the workforce.

“Communications have been transformed. If the business is to engage with a widely dispersed range of current and future shareholders, in order to secure their interest and involvement and, for some at least, their active participation in the future of the company, then it is vital to communicate on an equal basis with everyone concerned,” John explains.

Clockwise from left:Point of sale advertising, the Brandauer family board: Steven Webb, John Barkeley OBE, Fiona Alldridge, Paul Rummer, The original factory, A box of ‘Times’ pens

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Keeping Memories Precious

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Regular newsletters, for shareholders, the wider family and the workforce alike, help to demonstrate a commitment to a genuine partnership approach, as well as keeping everyone informed.

But communication must be two-way and, in addition to the formal AGM, there is an annual Family Circle gathering, open to any family member of any age, designed to encourage discussion and debate on current and future business issues.

These provide an opportunity to question the Family Board and Executive Directors and to examine important topics such as succession planning, future options for ownership and control and other matters. The introduction of these sessions has encouraged much wider participation than in the past and having well-informed family members undoubtedly improves the prospect of recruiting future Family Board directors. Since the Family Circle also provides an opportunity for individuals to express their views in an open forum, this should help to resolve any potential internal conflicts.

The existing Family Board not only represents a cross-section of the family tree but a rich diversity of talent and experience, having been appointed

solely on the basis of their management skills. The fact that all four are small minority shareholders also helps to ensure an objective, business-focussed approach to problem-solving and decision-making.

This particular family business has come a very long way in the past 150 years and plans to use this important anniversary to build on that success. Specially designed Brandauer parts already line the pair of particle beam tubes that lie at the very heart of the Large Hadron Collider and we’ll leave the last word to the scientists at CERN...

“Brandauer is one of very few high-precision presswork specialists in Europe with the necessary skills and technical capability to produce components that meet CERN’s extremely demanding specifications,”

“The Company’s contribution to the Large Hadron Collider demonstrates that small and medium-sized specialists such as Brandauer continue to offer world-class design and engineering services at the highest level and CERN congratulates Brandauer as it celebrates its 150th anniversary as a family business in 2012.” www.brandauer.co.uk

Left: Brandauer parts fitted to the Large Hadron Collider


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In 1892 Daniel Swarovski (1862 – 1956) invented a revolutionary machine that allowed crystals to be cut more precisely than with

existing manual methods. Nearly 120 years later, the 4th and 5th generation of the Swarovski family now head up the 2.6 billion euro business, including his great-great-granddaughter, Nadja who oversees the European Division.

“My great great grandfather followed a guiding principle which we still live by today – ‘to constantly improve what is good’. The pride we all feel for this business is a great motivator: when your name is above the door and you claim to make the ‘best crystal in the world’ there’s a lot to live up to!” explains Nadja.

Nadja started out working in Swarovski’s New York marketing department, followed by over a year at Swarovski Hong Kong, before taking up her current role as Creative Director in London.

Heiress to the world’s most famous crystal empire, Nadja Swarovski speaks to Amalia Brightley-Hodges about her responsibility for leading the next generation into the future.

A LEADING LIGHT

Right & far right: Atelier Swarovski by Arik Levy AW11. Atelier Swarovski by Mary Katrantzou AW11

Photography by Brian Bowen Smith


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Left: Natalie Portman wearing Swarovski encrusted costumes in ‘Black Swan’

Although Swarovski is renowned for its animal figurines, Nadja has been instrumental in changing Swarovski’s image and the fashion arm of the business now accounts for 55% of the company’s profit. What was once an old-fashioned brand is now a name synonymous with groundbreaking fashion, thanks to one woman.

“We remain faithful to the vision of Daniel Swarovski I by challenging our biggest achievements with a laser eye turned towards the future”Helmut Swarovski

“My cousins thought I was mad when I proposed opening a Swarovski showroom but I knew that people would only take us seriously if we were seen in trendy, fashionable places and it worked. I have so much respect for what the crystal figurine has done for our business but it was my passion for Swarovski to become part of the luxury fashion scene and now we work with companies like Dior and Alexander McQueen.“

Nadja has modelled her approach on her great-great-grandfather’s ethos for running the business: to make Swarovski accessible to the average man and woman, without losing it’s exclusivity. It was a difficult challenge but Nadja believes it came down to combining crystals with iconic fashion. Historically, Swarovski has been collaborating with the couture houses of Paris since the early 1900’s, adding sparkle to the collections of Chanel, Yves Saint Laurent and Dior. In 1999, a collaboration between a young Alexander McQueen, Isabella Blow and Nadja Swarovski catapulted the brand back to the forefront of the fashion industry.

“If you keep the larger picture in mind and set aside your personal interests, you will be able to secure your own standard of living as well as the future of your families.” Daniel Swarovski

But how has being part of such a global dynasty affected Nadja and the relationship she has with her family?

“At Swarovski, you can only be part of the business if you are in the bloodline. This means that my mother has had to understand I am my father’s colleague now, and we have to balance the thin line between personal and professional relationships.

“We must meet mother’s oft-expressed wish of carefully maintaining unity within the family, and ensuring that this unity is also maintained within the business.” Alfred Swarovski

My sister used to work in the business but now runs her own, extremely successful, business ‘Vanessa S’ and we are all incredibly proud of what she has achieved. There are also three branches of our family around the world, all looking after different divisions and there is a great pressure on the next generation to raise the bar. But with representatives from all three family branches on the executive board, there is an immense support network and faith in everything that we do.”

www.swarovski.com

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W illiam Purves, the founder of this family run firm, was born in the Borders of Scotland. He started his career as a joiner

and set off for a new life in New Zealand. He got as far as Edinburgh. Obviously he fell in love with the place because he set up shop there.

By the end of the 19th Century William Purves and his ten joiners undertook the tasks of cabinet making, french polishing, upholstering… and undertaking. In the early 1900’s, his son William (or Willie as everyone knew him) became the second generation to carry on the family business, opening a funeral office in Marchmont Road.

And so we come to the third generation of the Purves family to join the business: John (or Jack as he was known) was a time served joiner and worked alongside his father until Willie died in 1962. In the late 60’s Jack finally retired the joinery side of the

Amalia Brightley-Hodges meets fifth generation Company Director, Tim Purves, to discover how William Purves Funeral Directors have remained a family business for five generations.

A FAMILY FAITH

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company and the family concentrated solely on the funeral business. Soon afterwards they opened a funeral office with rest rooms and a service chapel to seat 50. They purchased their first hearse (an Austin 3 litre) and their first funeral cars (Daimlers).

“Of course there are difficult conversations along the way but simply because we are all so passionate about keeping our family business alive.”

Jack had five children and fostered many more. His son, John, became the fourth generation of Purves to join the company, in 1973, taking over when his father passed away in 1975. John set about growing the business together with his brother-in-law, Graeme Brown.

From the early 80’s onwards William Purves Funeral Directors opened more of their own offices throughout Edinburgh and The Lothians and purchased other funeral directors both in Scotland and the North of England.

Today, John is chairman of William Purves Funeral Directors. He shares the responsibility of running the company with his son, Tim, who is the fifth generation of the Purves family to run the business, as well as fellow company directors James Morris and Roger Pagan. Today, as well as John and Tim, there are four great, great grandchildren of the founder, currently working for William Purves Funeral Directors.

ABOVE: Tim Purves (3rd

from left) and his team at William Purves Funeral

Directors.

“I think it’s very important to have time away from the business, time with your family.”

“The five generations of our family share many things in common and one thing in particular: the Christian faith has always been a very important part of our company ethos, along with integrity and impeccable customer service. Our strap line is ‘Family Run for Five Generations’ – so important in our industry as there are not many left on the scene. We emphasise this in our marketing and advertising material and are incredibly proud of the fact,” explains Tim.

Because of the industry they are in, William Purves has an on-call rota covering 365 days a year but Tim says this doesn’t mean the family have to be working 24/7 – “Of course it’s important to me that the staff can contact me at any time and I’m always available for them to talk to. But apart from that I think it’s very important to have time away from the business, time with your family.”

So with six family members currently involved: three shareholders, two directors (one of whom is also a shareholder) and two funeral directors, what next for this thriving family business?

“Of the six family members involved, five of us are next generation and we all share the same vision for the future of the business. Of course there are difficult conversations along the way but simply because we are all so passionate about keeping our family business alive,” ends Tim.

www.williampurves.co.uk

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F ounded by husband and wife team, Bryn and Emma Parry OBE, Help for Heroes stemmed from Bryn’s time in the army and their visits

to wounded servicemen at Selly Oak Hospital. Bryn and Emma decided to ride from Caen to Cannes with the aim of raising £10,000 for the hospital but the challenge soon grew and the pair gave themselves a target of raising £8million to build a new Rehabilitation Complex at Headley Court.

Incredibly, with the support of over 300 other cyclists, they raised £1.4million from the bike ride alone but it didn’t stop there. The donations kept pouring in and within eight months they had reached their initial target and raised a staggering £8million.

Although, at the time, Bryn and Emma ran a very successful cartoon business together, their success in fundraising meant that the charity soon took off and they were left with no choice but to sell their business in 2009. “It was a difficult decision for us to let go of a business that we had

HEROES OF FAMILY BUSINESSIt all started as a small fundraising bike ride four years ago but Help for Heroes has now become a national phenomenon, having already raised over £100million. Amalia Brightley-Hodges meets the couple who started it all.

both worked so hard to make a success for 23 years of our lives but it was impossible to split our time. The business started taking a back-burner as the charity went full steam ahead,” explains Bryn.

But their sacrifice was not without reward - in 2010 Bryn and Emma were both invited to Buckingham Palace to collect OBE awards from The Princess Royal for all of the support that Help for Heroes has provided to the Armed Forces.

“We felt very awkward being personally honoured when so many people have done so many extraordinary things to support ‘our blokes’. Additionally, we are very aware that our contribution is nothing when put against that of the men and women of our Armed Forces. However, we decided to accept the awards on behalf of Help for Heroes and did so as representatives of all those who have contributed to this wonderful wave of support,” beams Emma.

So how do a married couple make the transition from running a small business to the responsibility of overseeing one of the UK’s best loved charities?

“For me, it’s important to have a separation of responsibilities,” says Bryn. “Not unlike a marriage, you need to complement each other’s skills and strengths whilst admitting that you might not be so good in particular areas. Don’t be afraid to get outside help when it’s needed but make sure that everyone has a clear definition of their role.”

“The public can relate to us, we are just a normal couple who have the honour of working with some phenomenal people”

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As for Emma - “Running a small business for over 20 years is no easy feat; at times it was turbulent and you have to make sacrifices. But it put us in good stead for this incredible journey with Help for Heroes; we can make sound commercial decisions which is critical when you’re deciding where to spend the money that someone has worked so hard to raise. It’s also important that both people feel the same way – tensions arise when people have different energy for things and so you need the strength of a partnership.”

For these two it’s all about keeping a reality check and remembering why you’re doing it all. Although they are husband and wife, Bryn and Emma both have separate offices and run completely different sides of the charity. When you visit Help for Heroes HQ, you immediately feel like part of the family and Bryn says he believes this to be part of the reason for their success.

“Running a small business for over 20 years is no easy feat; at times it was turbulent and you have to make sacrifices”

“The public can relate to us, we are just a normal couple who have the honour of working with some phenomenal people. We have been fortunate to attend lots of very swanky events but we never forget that we’re not successful until we have delivered all that we can for our wounded troops,” ends Bryn.

And there are no signs of slowing down for Help for Heroes. They are now building four recovery centres around the UK, helping to inspire patients to do something new with their lives and giving them support for the long term. And although Bryn and Emma realise there may come a time when they can step back a little, the immediate future looks set to be just as incredible as the last four years.

www.helpforheores.org.uk

PREVIOUS PAGE:Bryn and Emma Parry OBE with their Help For Heroes Dog

ABOVE: Help For Heroes merchandise

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T he Fleming family date back to the times of Robert Fleming in Dundee, who created the business. He was a financier and set up an

investment trust for the burghers of Dundee and invested in railroad stock in the USA before moving to London and creating the merchant bank, Robert Fleming & Co., in 1932. The first family trusts had been set up in 1923.

Although unaware of the future developments at that stage,

the Scottish heritage was to be the backbone of the

business and still has important influences over both the family and the firm today.

The business continued slowly and the two World Wars had an effect before the bank took off in the 1970s with a deal with the Keswick family that created

Jardine Fleming in the Far East. The family liked the

idea of joint ventures and saw them as a great way to grow the

business and established Rowe Price-Fleming in North America and Fleming Martin

in Africa.

Matthew Fleming spoke to Paul Andrews about the history of the business and the challenges they face to get to where the business is today, with a personal insight into the journey he has made through cricket, the army and the family business.

BANKING ON SUCCESS


Things changed in the 1990s and the family were reviewing how the bank would look in the future. At the same time they were approached by a potential investor and eventually they sold out for US$7.7 billion to JP Morgan Chase Manhattan (the family held around 35% of the business at the time). This decision was not one that was taken lightly by the ruling generation but they saw it as a great opportunity and from here the business moved from being a bank to becoming a private office to manage their own money.

As Matthew Fleming explains, “People initially felt that the sale of the bank was the end of the story but in reality it was simply the end of a chapter. We saw it as an opportunity to be different and to respond to the needs of the market, essentially it was an offer we simply could not refuse. We have subsequently evolved and grown as a result.”

Matthew himself did not at first have a desire to work in the world of financial services. He is fiercely competitive and began life as

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a professional cricketer and then wanted to pursue a career in politics. But Flemings made him an offer and he is now one of the three full time working family members in the business. In his own words, “My key role is the flier of the family flag and the custodian and guardian of our family values.”

Key values that pervade everything they do are absolute integrity, hard work and making sure that they are not working too hard at the expense of having a balanced life. Not easy if you are driven to be the best that you can and to achieve the best results in whatever you apply yourself too, as Matthew clearly is.

Key concerns at the start of the new era for the business were the minimisation of tax, diversification of stock and at the same time a need to realise economies of scale, which resulted in the business model that is in place today where by the business is a multi-family office managing the financial affairs of 48 families in total.

Flemings remains very much part of the family and the business has an important role to play for them. Art is also part of the DNA of Flemings. In fact, the family see the art as a real, tangible link to their Scottishness and their roots. The Fleming Collection is now the largest collection of Scottish art held in private hands in the world today.As a family, spending as much time together as possible remains a priority although like all families the pressures of family life, locations and the size of the family means that they do not all get together as often as they would like.

Maintaining the family interest in the business is the role of the Family Council, their trust company that was formed in 1930 and is the glue that holds

“We encourage all family members to do next generation courses and to understand the need to fulfil their independent potential to own their careers and to create prosperity for themselves,”

the family together. Matthew sees this vehicle as “the discipline and communication vehicle that has helped us to successfully transfer the business from generation to generation”.

Going forward, Flemings faces challenges with the next generation. As Matthew explains, “I have three daughters of my own and they are part of the 225 strong family members in the sixth generation, so the challenge is one of communication, development and recognising the right talent.”

“We encourage all family members to do next generation courses and to understand the need to fulfil their independent potential to own their careers and to create prosperity for themselves,” continues Matthew. “That way, they are in control of their own destiny and there is less pressure on the business to support them if they are successful in their own right.”

Matthew is fully aware of his role as custodian of the business for the family and brings all of his experience to bear in everything that he does. Having played competitive cricket for England, captained Kent and been in the army in his own right, Matthew recognises that the Fleming name did nothing to help with these achievements. “This makes me immensely proud,” he continues, “because my name was not the determinant of my cricketing ability; that was down to me. It is important that we all strive to be the best that we can at what we do and I certainly apply the ethos gained in the army and through sport to the way that I operate in business.”

“We encourage the next generation to do the same and I am positive that if we continue to encourage them in the right way they will achieve their goals too. We are a strong family but as the sixth generation wait in the wings, we all know that people have died, wealth has been transferred down through the generations and that we all have a role in helping this to continue.”

Matthew concludes, “The one passion that I have had throughout my life is cricket. I truly appreciate that if it were not for the endeavours of the previous generations I could never have played cricket and my main aim in life is to ensure that the next generations of Flemings say the same about our efforts today.” www.ffandp.com


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The oldest continuously trading family business in the UK is RJ Balson and Son, a butcher from Bridport, Dorset, which has sold sausages and bacon since 1535 - 476 years ago, when Henry VIII was King of England. However, the oldest 10 include a wide variety of businesses, from millers to builders and bankers, reflecting the diversity of family firms in the UK.

Donald Balson (above), who serves behind the counter in the premises they have occupied for more than 100 years, said: “The love of the job which has been passed down from generation to generation is one of the main reasons we have been successful.”

The IFB conducted the study to mark its 10th anniversary. Family firms provide 40% of private sector employment - one job in three throughout the UK.

IFB Director General Grant Gordon said: “These trading companies, run by the same families for up to 15 generations, really demonstrate the longevity

THE UK’S OLDEST FAMILY OWNED BUSINESSES STABILITY IN TROUBLED ECONOMIC TIMES

The downturn may have taken its toll on the UK economy, but the UK’s oldest family businesses have seen it all before, with many trading more than 300 years ago, according to a study by the Institute for Family Business (IFB).

1. R J Balson & Son (butcher) – 1535

2. R Durtnell & Sons Limited (construction) – 1591

3. C. Hoare & Co. (bank) – 1672

4. Morning Foods (miller) – 1675

5. James Lock & Co. Ltd (hatter) – 1676

6. Toye, Kenning & Spencer (medals & regalia) – 1685

7. Folkes Group (property & manufacture) – 1697

8. Berry Bros. & Rudd Ltd (wine merchants) – 1698

9. Salts Healthcare (healthcare products) – 1701

10. Aspall Cyder (cider makers) – 1728

10 Oldest UK Family Businesses

of family businesses and the stability they bring to the UK economy - especially important during times of economic difficulty.”

“Their stories are intertwined with the history of Britain and many are still based in the same communities they have always served. They have also shown the qualities that all progressive family firms require good stewardship and entrepreneurial spirit.”

Familiar names among the top 10 are Morning Foods, the maker of the Mornflake cereal, C. Hoare & Co, one of the oldest private, independent banks in the world and Aspall Cyder, whose premium cider can be found on UK supermarket shelves. By coincidence two of the oldest 10 are neighbours in the same London street, James Lock & Co and Berry Bros. & Rudd.

The following page unveils the 10 oldest family run businesses, which are still very much alive and continue to be successful in their respective fields.

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2.R Durtnell &

Sons Limited - 1591Britain’s oldest building company is currently into its 13th generation –

Alexander Durtnell, currently working as a contracts manager. The first recorded

mention of building is 1591 and the company head office, in Westerham,

Kent, stands on land that the family has occupied since 1496. Projects undertaken by the company include restoration and extension work on Clarence House, and

during the war years they constructed pill

boxes and tank traps.

www.durtnell.co.uk

3. C. Hoare & Co. - 1672

Based in London, this is the last survivor of the English private deposit banks

that were originally established in the 17th and 18th centuries and is one of the oldest private, independent banks in the world. The family’s pride in close customer relationships and meticulous

service has attracted famous customers, including Lord Byron, Jane Austen and various prime ministers. Alexander S. Hoare, the former CEO of the Bank, represents the 11th generation to

manage C. Hoare & Co.

www.hoaresbank.co.uk

4. Morning Foods - 1675

Morning Foods is the longest established miller of oats and cereal in the UK and its cereal products include the

Mornflake brand. They have been milling oats in the South Cheshire countryside since 1675 and, 15 generations later,

they are still independently owned and managed by the

direct descendants of the original miller, William Lea.

www.morningfoods.com

5. James Lock & Co. Ltd - 1676

Lock & Co has been based in St James’s, London for more than 300 years and is a family-owned business

providing ladies’ and men’s quality hats and caps with a high standard of personal service. The Coke, more

commonly known as the Bowler, was created at James Lock in 1850 for William Coke, a progressive farmer

from Holkham in Norfolk. Nowadays they have a number of hats that can provide ultra-violet protection

from the sun.

www.lockhatters.co.uk

1. RJ Balson & Son 1535

In 1535, John Balson began trading meat at the local market in Bridport, Dorset and the family have been

trading from the same shop since 1880. The shop is still run by Donald and Joan Balson and sells over 20 different varieties of sausage with many culinary awards between them. Since 2007 there has also been a US wing to the

company with ex-professional footballer Mike Balson, son of Donald and Joan, making bangers, bacon and black

pudding using traditional family recipes.

www.balsonbutchers.com



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6.Toye, Kenning

& Spencer - 1685The company, based in Birmingham,

has manufactured military and civilian accoutrements for over 300 years and is an

approved British Ministry of Defence supplier whilst also supplying specialist ribbon to

military organisations in the USA, Canada and Australia. It is sole supplier of medals

such as the CBE, OBE and MBE. During the coronations of King George VI and Queen Elizabeth in 1937 the velvet cushions on

which the Royal Crowns were carried into Westminster Abbey were made by Toye,

as was the train of the dress that Queen Elizabeth II wore when she was

crowned in 1952.

www.toye.com

8. Berry Bros. & Rudd Ltd. - 1698Established in 1698, this company has remained on

the same premises for the past 313 years, a few doors down from Lock & Co in St James’s, London. By 1765

they supplied the fashionable ‘Coffee Houses’ of London and had installed giant coffee scales on which

they also weighed customers. Berrys first supplied wine to the British Royal Family during King George III’s

reign and continue to do so, holding Royal Warrants for H.M. the Queen and H.R.H. the Prince of Wales. In 1923 the company created Cutty Sark Scots’ Whisky;

this was the first naturally coloured Scotch.

www.bbr.com

10. Aspall Cyder - 1728Cyder has been made at Aspall Hall, in Suffolk,

by the Chevallier family since 1728 and the family business is now in its eighth generation. It is a

manufacturer of apple juice, cyder and vinegar and all its products are sold in premium UK outlets as

well as overseas.

www.aspall.co.uk

9.Salts Healthcare

1701 Founded by two brothers, John

and William Salt, both locksmiths in Wolverhampton, the company

was firmly established as a surgeons’ instrument maker

and cutler by the time of John Salt’s death in 1755. Today

Salts Healthcare, now based in Birmingham and in its 10th

generation, is a manufacturer and supplier of health care products with an international reputation.

www.salts.co.uk

7. Folkes Group -1697The company began by making chain mail and swords. Now, in addition to making real estate investments, the firm produces

specialised cargo handling equipment, large crankshafts, roofing materials and other products. It is currently run by

Constantine Folkes, who became the youngest Chairman of a listed plc when in 1981, at the age of 28, he was appointed Chairman and is the ninth generation of the family to run

the business. Folkes Holding is now one of the largest private companies in the West Midlands and, although the group has long since focussed on property development and investment,

its origins lie in engineering - it continues to own Somers Forge, one of the largest open die forges in Europe.

www.folkesholdings.com

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Once there lived a man who was poor. The man was miserable but he felt that the reason he was unhappy was simply that he did not have enough money. He knew if he worked hard he would be rich one day and that would bring him the happiness he deserved.

He started a business from a meagre start and spent night and day at work. Eventually after years of hard labour and some good fortune, he had created an incredibly successful business and had more wealth than he could ever imagine. He had married a beautiful wife, had two lovely young children, lived in a big house and drove a brand new sports car......and yet he remained, relatively speaking, miserable.

He was not sure why. Maybe, he said to himself, deep down I am an intrinsically unhappy person, my default setting is pointed to “unfulfilled” and my drive to earn wealth as the compass for happiness was a flawed strategy after all. His pursuit of wealth had been to date exciting but now he had arrived at the gates of wealth and it was somehow not what he had imagined. The realisation that the man had achieved his ambition and yet remained miserable created even more disillusionment and that caused the man in turn to become even more miserable.

He craved pleasure even though he knew well that pleasure is often mistaken for happiness. His wealth was intoxicating. It offered the promise of happiness but not the sustainable satisfaction. He needed more immediate pleasurable fixes. Faster cars, a bigger house, more excitement. Sometimes that meant more alcohol, drugs, gambling and other women. None of this made the man happier. In fact the man became even more miserable still.

He admitted that he measured success in terms of wealth and not interpersonal skills – he was not interested in all that holistic mumbo jumbo, as he called it. Clothes, holidays, cars and other trappings of wealth were the language he spoke, his currency. Had he become trapped in his own wealth strait-jacket? He had few friends and had felt for a long time unable to relate to others, especially those below his social and financial status. If he was honest he had created a rather grandiose and garish lifestyle with little content and connection to others but he certainly did not feel he had to answer to anyone. Perhaps he was a little set in his ways but his wealth had created order and those around him were obedient. There was little need for the man to grow as a person. Business had made a real man of him, so he thought, although emotionally he felt he had changed little from an adolescent. Was he stuck on the adult developmental map? Absolutely not, he maintained. He felt that he was moving along in his life, transitioning nicely from chasing wealth to the pursuit of power.

His wife of 10 years suspected that he was cheating at a point in her life when she already despised her husband. She had always maintained that the prenuptial agreement she signed was an unequal contract. She felt employed within the marriage and that their relationship was in some way transactional.

THE PARABLE OF A RICH MANSteve Rosenbaum is an independent family business consultant and has worked closely with many family-run companies. Here he teaches a lesson about the darker side of an owner-managed business.

“His wealth was intoxicating. It offered the promise of happiness but not the sustainable satisfaction. He needed more immediate pleasurable fixes. Faster cars, a bigger house, more excitement”


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He had reminded her on a number of occasions that the money belonged to him and he did not want to hear about her involuntary servitude, as she described it. He controlled the relationship by controlling the money and she attempted to gain equality in the marriage by trying to spend it.

What of the man’s other family and friends? None of his friends were truly happy for him and his wealth. Moreover they could not wait for bad things to happen to him and watch his demise. He sensed this and became rather introspective when he made new friends. His relationship with his siblings was distorted and grotesque. They were all jealous of his wealth and at the same time desperately hanging on for any crumbs of any future inheritance.

He had not been the greatest father either. He spent little time with his kids when they were young, due to business commitments, and it was left to his wife and a number of nannies to bring them up. Perhaps he took it for granted that as a successful businessman it was a given that he would be a fantastic parent. Although the children missed the father’s love and input, he had high expectations for the children. They would be entrepreneurs, hard working, obedient and respectful to their father and above all take heed of the success of their father and the lessons he could teach them. In reality, his children had little character or competency, because they were, after all, brought up by an angry resentful wife who taught the children to have a sense of entitlement and identity based on their vacuous wealth, tiny seeds of destruction had been sown.

The man and his wife were divorced after 20 years of marriage at great financial and emotional cost. The children, who had started to receive an

allowance from the age of 18, were miserable and complained that their father was no role model. They moaned about how dad had deprived them of their usefulness and ability to become self made. They resented their inability to achieve their own goals. The father argued that it was their own sense of entitlement and lack of ambition that had stifled their progress.

Nevertheless the father decided when the children were approaching the age of 30 that they could both work in the family business. Although he had no intention of the business carrying on over generations, he wanted to see if the children would make a success of it. He did not realise that he had inadvertently created a next generation that lacked any engagement and were not prepared to be manipulated. The children did work hard but found the father’s control and constant didactic instruction both crippling and dispiriting.

The father called the children one day after work and told them that he had decided to sell the family business and then paid both children a year’s salary as severance for their jobloss. The children never really got over this final humiliation and would spend the rest of their lives in narcissistic misery.

The man became very ill suddenly at the age of 70 and died leaving his entire estate to his much younger third wife. After he died, many spoke about the man’s legacy. Some spoke of his extreme wealth and how brilliant he was in business. Most will remember him for the utter mess that he left behind.

Steve Rosenbaum has been awarded The Certificate in Family Business Advising from the Family Firm Institute and works as an independent consultant.

“He felt that he was moving along in his life, transitioning nicely from chasing wealth to the pursuit of power. “

“Perhaps he took it for granted that as a successful businessman it was a given that he would be a fantastic parent. Although the children missed the father’s love and input, he had high expectations for the children”

Generation Autumn / Winter 2011 47

www.mytendays.org

www.mytendays.org

mailto:[email protected]


There is a deep connection between the values held within a business, configuration of the spaces that business occupies and its bottom line performance, which is often underexploited by small to medium scale family businesses.

Doing the right thing, in the right place at the right time, with inspired appropriate material elegance and crucially doing it for all the right reasons should be what architecture, architects and designers are all about. The question is: what are the right reasons? Depending on your view among the stakeholders such tenets, worthy as they are, often appear to be abandoned or at best severely watered down; subservient to the drive for short term profits or fashion, often to the detriment of longer term value and, we are told, the planet’s health at large.

To quote Simon Sinek, a provocative thought leader: ‘People don’t buy what you do; they buy why you do it’. They buy what you ‘believe’, not the product you have on offer (1). What we produce and sell as product can therefore be seen merely as the tangible evidence of what we believe not ‘why’ we do it in the first place, as the benchmarks of our corporate competitors would have us believe.

While this may appear heresy to the commercial evangelist, it is arguably why Apple computers are able to defy logic and consistently innovate with the same or fewer resources to an unprecedented market position; why Martin Luther King by saying what he ‘believed’ inspired a whole generation of civil rights activists to make the world a better place. We follow ‘those who lead’ for ourselves, not for them or for a rationally better position. It is the emotional response of alignment that counts and of course why the brand in today’s world is such a powerful tool.

You don’t need me to tell you that family businesses are among the most successful at understanding ‘why’ they do what they do; often held in the deep roots of family, history, passion and close relationships. Their workplace environment likewise demonstrates the

beliefs and values within the business, the ‘why we do it’ is communicated every minute of every day through materiality and the space occupied. The attention to the design of the workplace by the majority of organisations, however, is scant.

CABE (Commission for Architecture and the Built Environment) have said that good design is ‘measurable’; some of the larger corporate employers have woken up to the power of workplace design as part of their human resources policies. However, most businesses focus too little on their workplace environment: its relationship as a carrier of their brand values and its potential for affecting bottom line business performance, which is measurable, by spatially streamlining their processes and inspiring their people (usually their greatest asset) to become engaged leaders.

The barrier usually erected to such a discussion when built assets are being considered is of course that of cost. The cost of building is often seen as prohibitively high for family businesses until they reach a certain scale in terms of employees or turnover, even though the power and value of design can be harnessed at all scales and at widely varying price points. Businesses of course vary widely but, put into the brand and staff motivation context of ‘people buy and work for what you as an employer believe, not the product you have on offer or, believe it or not, the money’, who can afford not to exploit the power of undertaking a spatial health-check and intelligently tuning the space of the workplace; regardless of the scale of business being considered.

(1) Sinek, Simon, Start with Why, Portfolio. Columbia University USA

Duncan Berntsen is a Lecturer at the University of Greenwich and Director of Berntsen l lD’Andrade Architects.

BRICKS & MORTARInvesting in our surroundings, our workplace and in property in general hasn’t always appeared high on the agenda during these turbulent times. But Duncan Bernsten and Gary Martin both explain why such investment is crucial to ensure family businesses stay one step ahead.

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Nearly 30 years ago, my father was given some valuable advice about the benefits of building up a property portfolio. Over the years to come, that conversation had a direct influence on the way he built his business.

At the time, he ran a small construction company and began using profits from the business to buy small, terraced properties to rent out. Today, the Group has hundreds of properties around the UK, ranging from the very first terraced houses through to retail developments and office towers.

In 2004, along with my elder brother, I set up a new trading division to the business primarily focused on buying and selling quickly to take advantage of the strong market. Although property has had a particularly tough time given the climate over the past few years, it still presents fantastic opportunities – now more than ever. As an asset class it has the appeal of being something you can physically touch, in contrast to buying shares or putting money in the bank. As the climate remains unstable, this is why people will keep being attracted to property.

Whether you have an existing portfolio or are considering a new venture, it is vital that you are clear about the following factors –

• Your timeframe• Appetite for risk• Exit strategy• Level of involvement• The best advisers• Importance of capital growth

or highest yield

If you are clear on the above points and you have the right plan, then you can take advantage of the exciting prospects that lie ahead.

The most important questions I ask myself before buying any property is ‘Why hasn’t someone else bought this before me?’. With some luck, you’ll be the first person to see it and it’s a genuinely good deal. But in reality, it’s more likely that you’ll be the fourth, fifth, tenth person down the queue. The likelihood is also that someone more experienced and knowledgeable has already seen the property and so you have to wonder why they walked away. The key

to making money is having the vision to see what others have missed, but it also pays to be cautious.

In the property market, you have to kiss a lot of frogs before you find a worthwhile project and, although this can be very frustrating, patience will save you more money than you could ever make. Location is also another extremely important factor and, although it’s always top of everyone’s list, it doesn’t just mean buying in the right town but in the right street, and in the right part of the street. Then comes the knowing about other elements which you can’t see on a viewing – what the neighbours are like, does the block have a bad reputation, a new development down the road which will lower property values due to a greater supply of properties.

We have two arms to our property business now – those properties we buy to keep in our portfolio, and those which we sell on again quickly. The latter is where I like to work because capital growth will continue to be slow, but if you have an understanding of the market you can get 20%, even 50% return within months. Most people believe that these sorts of margins are a thing of the past but in reality these transactions are happening all the time.

Whether you are trading or building a portfolio, it is imperative to buy the property at the right price because you only buy the property once. Not being afraid to negotiate hard and being prepared to walk away will get you the best deal. If you get emotionally attached before the deal is complete then you will almost certainly pay too much.

Once you own the property, you then need to maximise it so that your money is working hard for you. Looking at where you can increase the square footage, changing the planning use, refurbishing, buying the freehold and increasing rents are all good ways of increasing value and building a successful portfolio.

Whether you have an existing portfolio or feel it’s the right time for you to invest, make sure you have the right team around you and don’t be afraid to walk away if it doesn’t feel right.

Gary Martin is Managing Director of The Martin Group, based in Central London.

www.martin-construct.co.uk

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At a time when most businesses have their nose to the grindstone, just trying to ride out the turbulent economic wave, family businesses are thriving on their customer loyalty, respect and tradition. Anita Brightley-Hodges, Kevin Chambers and Rob Tavernier talk about how these successes can be celebrated for maximum publicity.

CELEBRATING FAMILY BUSINESS SUCCESS

In these extraordinary times, we all need something to celebrate. And for a

family business that has been trading one, two, three generations or more, sometimes we forget exactly what a great achievement this has been. Not just for the family members, but also for

staff who may have been working in the business for many generations.

A thriving family business has weathered the economic storms. Through innovation, they are able to keep abreast of trends in the market and opportunities. The products they once sold in the beginning, may not be the same in today’s market. The look and feel of the family business brand has also changed over time in order to remain relevant and competitive. Visual design trends are always changing. What once looked like the height of fashion with consumers, has now evolved to remain top of mind but also enshrining all the values of the products which have become loved over time.

A business that began raising prize cattle for beef in the heart of the Cotswolds is now a cider maker with customers around the world. A company that once made webbing for parachutes in both world wars now supplies an international market with webbing innovations for use in furniture and in engineering. And a brand that made items of clothing exclusively for the Royal household is now accessible in cities around the globe.

With all these changes in brand identity, products, services, and business growth,

what better way than to put all this richness into a beautifully bound book to mark the achievement of the family and the business. The story can be told, first generation founders introduced once again, and the hidden photographic treasures that have been locked away revealed in all their splendour.

Once written, designed and produced, an Anniversary Book is a fantastic way to reconnect with long standing clients, retired members of staff, and create new ambassadors and friends. Every family business is as unique as a fingerprint, every story is special and gives that point of difference craved by so many modern brands, which lack the heritage and trusted image of long standing family businesses.

To make more of the occasion, it’ts great to gather customers together to say ‘thank you for your support’ in the convivial atmosphere of a party. And what better way to say ‘we value you’ to staff, some of whom may even be featured in the book itself.

The publication becomes a momento, a reference and a ‘here’s to the future’ and the next generations. Act now or these treasures will be lost forever.

Anita Brightley-Hodges is Managing Director of Brightley-Hodges Associates and Family Business Place – inspiring family businesses to have the confidence to adapt the way they have been doing things and stay successful in these extraordinary times.


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They say a picture paints a thousand words. Imagine how many words you get when that picture becomes a video? Well, if the video is 2-3 minutes long you can probably get through a 2-page script or about 1500 words, give or take a few erms and arrs.

That’s a lot of information.

Video on the web is becoming more and more popular. In the US it’s pretty much standard to expect a video of some sort on your website. Whether it’s a short introduction from the family business owner or a few words from a satisfied customer, video is fast becoming the norm. Here in the UK we are 2-3 years behind that trend but make no mistake: online video is here to stay.

We live in a world where technology makes access to information faster and easier than ever before. We are only ever a few clicks away from the latest news or celebrity gossip. As a consequence of this technological revolution our attention spans have become shorter and so the need to create information sound bites has become the driving force that is pushing online video to the top of the media pile. With newspaper sales at an all time low, it’s plain to see we are reading less and watching more. Why spend 15 minutes reading an article when you can digest the same information in half the time by watching a video?

So what can video do for your family business? Well, if you’re a retailer you can use video to inform your customers about your products. Not just how much they are and what sizes they come in, but how and where the products are made. As consumers we are far more aware of our impact on the environment than ever before and we want to know the provenance of the products we buy, not just the price. We happily pay a bit extra for something if we can see the work that has gone into it.

You may want to show some examples of how to use a particular product. We recently worked for a high street retailer who sold lots of pop up tents but

“We worked with a family run business that has been going for over 50 years. They wanted to tell their family story but didn’t know how to begin”

unfortunately a huge amount of them was being returned because the written instructions were just too complicated. We produced a short 2-minute video illustrating how to put the tent away and almost immediately they saw a drop in returns.

The beauty of video is that it can tell a story far more succinctly than the written word and therefore it becomes easily digestible.

You may be a business that is considered quite impersonal, an accountant, IT or solicitor for instance. A short video on your site adds a face to the name, and immediately puts the viewer (your potential customer) at ease. Regardless of our technological advances we would all rather deal with a human being than a computer or a page of text.

We worked with a family run business that has been going for over 50 years. They wanted to tell their family story but didn’t know how to begin and didn’t think anyone would want to watch the head of the company for any length of time. Our approach was simple.

We spent an hour or so interviewing the current CEO, asking him questions about his father and how the business started, questions that he not only knew the answers to, but was happy to talk about and expand on. He soon forgot about the camera and in fact by the end of the interview it was us who had to ask him to stop talking because we had so much great footage. We spent a little time filming in the factory and then accessed lots of archive footage dating back to the start of the company. We dropped these images throughout the video and used the CEO’s interview as a voice over.

Even though the cost of camera equipment and editing tools are in freefall, great ideas, good scripting and postproduction are still worth paying for. Beware the company that offers video at £500 a time. Do some research - have they worked with family businesses before? Do they know how to tell the family business story?

Rob Tavernier is a Director of Greedy Media, who produce online video for businesses including many family run companies.

www.greedymedia.com

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The world at large may feel like austerity is in fashion but the family business sector has more to celebrate than most and holding an event to celebrate a family business milestone is a fantastic way of demonstrating one of the sector’s unique selling points in the

modern age of faceless corporations.

The average business doesn’t last beyond the first seven years so if yours is one that has lasted one, two or even three generations make sure that you shout about it from the rooftops with every passing anniversary. Family open days, staff parties and related marketing activity can help stimulate activity and generate loyalty from customers who recognise your brand’s heritage.

Back in 2009 M&S celebrated their 125th anniversary by reaching back to their roots in a Victorian penny bazaar, offering many items for only one penny. Whilst your finance department may not be celebrating should you throw open your doors with a similar promise there is no doubt that M&S benefited from the thousands of column inches that the celebration created.

Encapsulate your brand heritage in a suitable strap-line that makes it easy for your customers to realise why you have cause to celebrate. Thorntons celebrated their heritage for many years by using the strap-line ‘Chocolate Heaven Since 1911’ and now that their centenary has arrived they are looking firmly to the future with ‘100 Yummy Years’ both on-line and in-store.

Talking to an event professional will help you assess your in-house resources and can design the programme, develop a project management solution, manage sponsorship, design marketing plans and maximise the return on your investment, adding value by utilising their experience and contacts to your advantage.

A staff family day is a great way of emphasising your brand values, rewarding and motivating

staff, and can provide ample opportunities for some great public relations. At the other end of the spectrum throwing a really great party can provide an excellent competition promotion if you utilise tickets as prizes and stress the exclusive nature of the event. Richard Branson has perfected this technique over the years and every part of his Virgin Group celebrates each milestone that passes, usually with an ultra-exclusive bash that a lucky few competition winners get to experience in addition to their own staff.

Whilst you may not have the budget of Branson you can still create a buzz for your brand. Throwing an exclusive gig at a hip venue with an emerging artist is an excellent way of connecting with a young audience and adding credibility to your proposition. A cooking demonstration with a celebrity chef would be a similar route that delivers credibility to a completely different demographic.

If your business isn’t suited to fun days and parties, thought leadership is the ground to head for. Pulling together a conference or seminar that includes some visionary thinking can celebrate your history but also ensures that you are looking firmly to the future. In the 21st century audience size is less crucial than look and feel, and placing the event on-line stimulates interest and provides a greater return on your investment.

No matter what kind of event you decide to produce, your on-line strategy is crucial in ensuring that you maximise its potential. The event should have a coherent social media strategy that integrates seamlessly into the live event. You want to be a hot topic in the twittersphere and a well produced thought leadership event with some truly inspirational speakers is an excellent way of achieving this.

Whatever you decide to do to celebrate your heritage make sure that you set clear objectives and have a method of measuring whether or not your objectives have been met. Engage with all of your stakeholders and your customers and you can be sure that whatever experience is created it will deliver long term value that should last for another generation.

Kevin Chambers is a Director of Contact Limelight, a family business who have been designing, developing and delivering exceptional events since 1999.

www.contactlimelight.co.uk

“Whilst you may not have the budget of Branson you can still create a buzz for your brand”

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FAMILY CONSTITUTIONBOOKSBringing together all of the family’s thinking, plans and aspirations that will stand the test of time, The Family Constitution Book is the critical point of reference for:

Employing family members • When the inevitable happens:•

The unanimous principals of the entire family • Greater harmony • Inspiring future generations•

For further information visit www.familyconstitution.co.uk


Rights and Responsibilities

FAMILY CONSTITUTIONBOOKSBringing together all of the family’s thinking, plans and aspirations that will stand the test of time, The Family Constitution Book is the critical point of reference for:

Employing family members • When the inevitable happens:•

The unanimous principals of the entire family • Greater harmony • Inspiring future generations•

For further information visit www.familyconstitution.co.uk


Rights and Responsibilities

www.familyconstitution.co.uk


scotland’s finest


There is something very different about the Scottish family business sector from that of the rest of the UK – a more communitarian view of life. It is often said that Scots ‘put a kilt on’ rules and regulations, doing things in our own way and in line with the core values of our country, and the establishment of the Scottish Parliament has highlighted the different approach taken to particular issues.

Although Scotland tends to lag behind the economic performance of the rest of the UK, we have a stable and consistent economy where real entrepreneurialism is celebrated – though not often enough – and business leaders are driven by growth and expansion into new markets. Just think back to Robert Fleming, who started out in Dundee and whose bank sold for US $7 billion. Along with a substantial support network including the Scottish Family Business Association, family businesses in Scotland are flourishing, demonstrating precisely why the road ahead presents exciting challenges and opportunities.

In association with

Almost 70%* of Scottish businesses

describe themselves as family

businesses, a true testament to the

legacy of previous generations and to

today’s stewards currently navigating

their family business through these

stormy times.

Scotland’s Finest

This issue of ‘Generation’ features ‘Scotland’s Finest’ – a collection of some of the most innovative and dynamic family businesses our country has to offer including the Tiso Group, James Donaldson & Sons and the GAP Group. Some are household names, others are small gems, but all are ambassadors of the family business community – a thriving and vital part of Scotland’s economy.

Gary DeansPartner, ScotlandKPMG’s Head of Family Business in the UK

*Scottish Family Business Association - www.sfba.co.uk

scotland’s finest


For four generations, the Baxter family have been producing some of the UK’s finest soups, preserves, condiments, beetroot, chutneys and a wide range of other fine quality food products.

Today, 142 years on, each recipe is carefully developed with the personal guidance of Audrey Baxter and their dedicated team of experienced chefs. They work tirelessly and meticulously to create new products and ranges. The Baxter family continue to taste every recipe and no product leaves the kitchen until it meets the exacting standards of Audrey Baxter. Only then will she commit her signature of approval to the product label.

It all started when 25 year old George Baxter was working as a gardener for the Duke of Richmond and Gordon on the Gordon Castle Estate. George borrowed £100 from family

members to open a small grocery shop in the village of Fochabers. Here, in the back shop, his wife Margaret began making jams and jellies with fruits from the local area. They were an instant hit with the Duke and his many guests and this quality ensured Baxters products found their way to the table at Gordon Castle.

Today, Audrey Baxter and her management team run a company of which her great-grandparents could never have dreamed. The sheer scale of the operation now based in sites throughout the UK and food manufacturing operations in Canada (est.2004), Australia (est.2007) and Poland (est.2007), and the science and technology that underlies it may be far removed from the little village shop in Fochabers. But the ethos remains the same - be different, be better.

www.baxters.com

William Anderson and his two sons ran a well-known tailoring business in Edinburgh. In 1868, with trade increasing, they founded the Kinloch Anderson Company of today. For over 100 years, the Company was based in George Street, one of the most prestigious shopping streets in the centre of Edinburgh.

“Particular pride is taken in The Royal Warrants of Appointment as Tailors and Kiltmakers to HM The Queen, HRH The Duke of Edinburgh and HRH The Prince of Wales.”

Military tailoring was developed as an important part of the business with officers’ uniforms being tailored for all of the famous Scottish Regiments. In the early 1930’s, William Kinloch Anderson made an important decision to introduce men’s ready-to-wear clothing – a daring and innovative move for a prestigious tailor. But as many other tailoring businesses declined, the Kinloch Anderson Company thrived as men’s outfitters and specialists in Highland Dress.

Kinloch Anderson is based today on the history and heritage of a prestigious independent family company, currently managed by the fifth and sixth generations. Over its long history, the company has proved to be progressive and internationally minded, without ever losing its adherence to the highest quality standards.

Over the years, Kinloch Anderson has received many accolades, but particular pride is taken in The Royal Warrants of Appointment as Tailors and Kiltmakers to HM The Queen, HRH The Duke of Edinburgh and HRH The Prince of Wales.

Renowned for high quality clothing and textiles since 1868, the company is now a varied business of high repute with a strong brand name and image.

www.kinlochanderson.com

Mark of approval

Royal Client

scotland’s finest


Donald Malcolm was just 14 when he inherited the family business in the 1940s. Its assets were a single truck and a horse and cart.

By 1960, when the firm was acquired by Grampian Holdings, Donald had built it up to a fleet of 37 vehicles - plus seven items of plant.

Consistent investment in the business, often ahead of market trends, lifted the company to its current status as a respected player in the logistics and construction markets.

On 18th January 2002, Grampian Holdings plc was renamed The Malcolm Group plc and was fully listed on the UK Stock Exchange. In May 2005, after 45 successful years in the ‘public’ domain, the Group was once again taken into private ownership by the Malcolm family.

The Donald Malcolm Heritage Centre was built by Andrew Malcolm, in memory of his father, Donald, known and respected as one of the greatest and most enigmatic businessmen ever seen in the Scottish road transport industry.

McGhee’s was founded in 1935 by Dugald McGhee at the original bakehouse in Oran Street, Maryhill, Glasgow. The company serviced the local shops and market with a range of freshly baked morning rolls, tea-bread and savoury products.

Sons Jim, Calder, Douglas and Gavin all joined the company and became directors during the 50’s and 60’s. Sadly Douglas died at a very young age and did not see the move in 1969 to the custom-built premises at Murano Street, Maryhill.

With a reputation for top quality products, McGhee’s continued to grow into the catering trade whilst continuing to service their core customers locally with fresh morning goods. During the 90’s the 3rd generation of McGhee’s, Gordon, Stuart & Ian, were installed as directors. Sadly, during this period the company lost Gavin to a sudden illness, with Jim retiring and Calder also phasing into retirement, leaving the three new directors to plan the company’s future.

They were servicing across the central belt of Scotland, sending vans to Edinburgh, Dunfermline, Stirling and Perth on a daily basis, whilst establishing themselves as a supplier of the Glasgow favourite ‘Crispy Rolls’. The directors’ commitment meant a further move to state-of-the-art premises at the M8 food park in June 2005, where they now operate out of possibly the most efficient bakery production unit in Britain.

www.mcgheesbakery.co.uk

Never too young to start

Raising the standard

Now the legend lives on in the Heritage Centre. The building itself was reconstructed from an original shed that was dismantled at Brookfield, the company’s old headquarters. It houses a unique display of 15 fully operational trucks from the last 50 years of the company’s road transport history and is designed to celebrate the legacy of The Malcolm Group.

“After 45 successful years in the ‘public’ domain, the Group was taken into private ownership by the Malcolm family”

Most of the trucks are taken on the road to the various truck events throughout the UK. The centre itself is built just a stone’s throw away from the company’s current headquarters in Linwood. Amidst its massive warehousing, railhead, logistics and vehicle servicing complex, it encompasses a large part of the Renfrewshire area, spanning from Linwood well into Johnstone.

www.malcolmgroup.co.uk

scotland’s finest


Mackie’s today is the outcome of the effort and foresight of four generations of Mackie’s and their staff. Ice cream is currently the main focus of the business - employing 70 people and producing over 10 million litres of luxury ice cream a year. Mackie’s farming and food business is owned by the Mackie family. Maitland Mackie is Chairman and his son, Mac Mackie, is Managing Director of the company. Mac’s two sisters also have senior management roles – Karin is Marketing Director and Kirstin is Development Director and also Managing Director of Mackie’s at Taypack.

The Mackie family have been farming at Westertown Farm since the turn of the century. Mackie’s were formerly a milk retail company and in 1986 a small investment in a real dairy ice cream manufacturing capability was made, to use the cream surplus arising from a market shift to semi-skimmed milk.

By 1993, the ice cream sales had increased to a turnover of £2.5 million and the traditional byre and old mill were converted to a modern ice cream dairy.

Mackie’s have Europe’s largest voluntary access milking centre with 8 robots. Diversification and use of the farm spring water led to the launch of Mackie’s Icy Glen Ice Cubes in 2004, rebranded as MACKICE in 2009. In 2006 production machinery was added to raise capacity in the ice cream dairy to 6,000 litres per hour and up to 15 million litres per year.

In The Mix

“Mackie’s is now a fourth generation family business, with a five generation old tradition of first sons called Maitland Mackie.”

scotland’s finest


After many years of planning and establishment growth, the farm arboretum was planted out by Halldis Mackie in 2009. Mackie’s launched a new range of potato crisps in June 2009 in partnership with the Taylor family and their Taypack potato growing and processing company.

Mackie’s is now a fourth generation family business, with a five generation old tradition of first sons called Maitland Mackie. Each Maitland as an entrepreneurial innovator has, in his own way, contributed to the development of the business:

Doctor Maitland secured and delivered a substantial farm to each of his six children. Sir Maitland was the first to diversify the developing dairy farm into milk retailing in Huntly and Aberdeen. This activity was started in the late 30’s and subsequently sold to form the core of Kennerty Farm Dairies in 1964.

Chairman Maitland restarted milk retailing with the purchase of several rural milk rounds in the

late 60’s. By 1994 the business had become a substantial milk processing/retailing business with a turnover of £12 million and employing 250 people. During the same period the area farmed doubled.

“Ice cream is currently the main focus of the business - employing 70 people and producing over 10 million litres of luxury ice cream a year.”

The present Managing Director Maitland (Mac) has consolidated the land base to the Westertown farm area, grown profitable ice cream sales to over 10 million litres per annum, diversified into production of ice and installed the three wind turbines.

www.mackies.co.uk

In The Mix

scotland’s finest


Graham Tiso was a very experienced mountaineer, climbing to a high standard in both summer and winter. In 1961, he met Maude, who had just returned from working and climbing in Norway. Both were acutely aware of the lack of good equipment and clothing available in Scotland. By utilising his business skills, and first hand knowledge of technical equipment, Graham was sure he could fill this gap in the market.

In 1962 they began trading from the back room of a boat shop until they acquired their first shop in Rodney Street, Edinburgh later that year. Trading was brisk, and some premises nearby were soon required for storage and repairs.

Banks were not supportive to young businesses then, so it was not until 1973/74 that the company was able to acquire the larger warehouse/premises it required. Later in 1974, a shop was opened within the building at Wellington Place in Leith, with enough space to display tents and show a wider range of products.

During these years Graham worked very hard to drive up standards and to encourage innovation in clothing/equipment for the climbing and camping trade. The Tiso Group now comprises four Group companies and 25 outlets throughout Scotland, England and Northern Ireland. Chris Tiso, Graham and Maude’s son is now at the helm.

“Being a family business has many plus sides – we have a unique paternal culture with strong loyalty amongst employees and the ability to take a long-term view. However, there is a strong sense of duty and responsibility which doesn’t suit everyone so people thinking about joining their family business must be prepared for a culture where loyalty, a strong work ethic and the taking of personal responsibility are paramount,” says Chris.

www.tiso.com

James Donaldson & Sons was started in 1860 by the current generation’s great-great-great- grandfather, James Donaldson. The original business imported softwood from Scandinavia, Russia and the Baltics into the small Scottish port of Tayport near Dundee. The company has since grown to become the UK’s leading processor, manufacturer and distributor of timber and engineered timber products.

Today there are five family members actively involved in the business – brothers Andy and Mike (Management Trainee and General Manager), their father Neil (Chairman), their grandfather George (President) and their mother Valerie (Non-executive Director).

“We’re very proud of the fact that our business is family controlled and free from institutional investment. In all of our marketing material and publicity we’re keen to stress that Donaldson’s is family run with a family ethos, and we think this is worth promoting. People like to know that businesses they buy from are well-established and

trustworthy, and I believe that the family element embeds a certain trust in the company. We often promote the family ethos within our business, and I think this has a positive impact on our customers. I also think the fact that we are a family business improves our relationships with other more traditional businesses, as well as our local customers who appreciate the family history,” says Mike.

The company has a much more significant presence in Scotland than England with 17 sites in Scotland compared to only seven sites in England. As a result, they are well known within the Scottish industry and this does bring its own benefits. Andy says, “I definitely think that being part of the Scottish community helps with regards to getting our name out there in Scotland. We have an excellent reputation within the Scottish construction industry, and I think the fact that we are a Scottish company does help our branches, because people do try and support their local businesses.”

www.donaldson-timber.co.uk

Sailing to the top

Family foundations

scotland’s finest


Since the company was founded in 1969 as Gordon Anderson Plant, GAP has offered its customers value for money, along with exceptional service and peace of mind.

Managing Directors and brothers, Douglas and Iain Anderson, have continued their father’s legacy and the company now employs nearly 800 people in 60 locations covering the length and breadth of the UK.

Teaching the trade

GAP prides itself on being a family run business and is therefore committed to providing the best service, reliability and longevity. Above all, family values such as trust, integrity and honesty are paramount throughout all of GAP’s

nationwide operations. As with many family businesses, GAP are passionate about bringing new talent into the business through apprenticeships.

As a sign of GAP’s successful performance over the last year, they aim to have an apprentice in every one of their 59 depots throughout the UK.

At the moment, there are 27 Plant Mechanic Apprenticeship vacancies which the company believe will result in better job prospects, higher salaries, improved confidence, better social skills and a stronger sense of direction.

Douglas Anderson, Managing Director, comments, “Here at GAP, we believe that apprentices are part of the future of our family business and that is why we are committed to offering the necessary training and development to allow them to grow and learn in the business, and this is an opportunity that will benefit the apprentices in their future careers”.

www.gap-group.co.uk

Michael and Susan bought Macbeth’s butchers over twenty years ago and have built it up as a family run business with their son, Jock, now in charge. They live at Edinvale Farm, the main beef supplier to Macbeth’s, and they still take a very active part in the business.

Michael Gibson trained originally as an accountant, which he persevered with before he decided that it was not for him. At this point he bought Edinvale and ‘rustled’ the two Highland cows that had belonged to his parents to adorn their garden. From these fairly modest beginnings Michael and Susan developed their Highland herd, successfully winning prizes at shows throughout Scotland.

In recent times, Michael has been instrumental in his work with organisations such as the Scottish Land Owners Federation, the Highland Cattle Society, the Food Standards Agency and the Macaulay Institute. Susan has been the mainstay of the Macbeth’s operation for the last twenty years. She has steered the company through difficult times, notably the BSE crisis in 1997 and more recently the foot and mouth outbreaks.

Their son Jock started out as a consultant engineer in Peterborough before moving to Glasgow to do a stint there. Having decided that there was probably more to life than the traditional 9-5 (occasionally 6,7 or 8), he moved back up north to start running Macbeth’s in 2006. His aim is to build on the success that his parents started and promote the business on the mail order market.

www.macbeths.com

Through crisis to success

“GAP are passionate about bringing new talent into the business through apprenticeships”


COLLECTING ART FORFUTURE GENERATIONSBy Lisa Sharpe, Art Dealer and Curator of One Alfred Place, London

“Works of Art, in my opinion, are the only objects in the material universe that possess internal order, and that is why, though I don’t believe that only art matters, I do believe in Art for Art’s sake.” E M Forster

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Great art collections are powerful and meaningful legacies to leave our children and future generations. They are a lasting connection between the past and the future: just as the Guggenheim, Rockefeller, Rothschild and Mellon families left great art collections to us all, so too can we leave a lasting and tangible legacy in a smaller way to our own family: a symbol of what we have achieved in this life. Sharing the works of art that we love and treasure is a profound way to pass on a part of us that will be remembered by future generations.

“While owning these pictures, in addition to the daily pleasure they gave us, there was also the subliminal pleasure of knowing that someday they would be seen and loved by many, many people in these classically serene surroundings.” Paul Mellon, 1986, National Gallery Washington.

Nobody needs to have art: the world could carry on perfectly well without art, but it would be a duller and emptier place. Man has always drawn some inner satisfaction from decorating his surroundings: art has been a part of our lives since the first paintings were lovingly daubed upon cave walls, and although fads will come and go, and people will debate what constitutes ‘art’, the works that need no explanation, the works that simply speak for themselves, the works that make the world a livelier and fuller place, are timeless.

It is these timeless works of art from which great and lasting art collections are made: works of genuine depth and meaning that will stand the test of time, works that are not just a temporary, sensationalist reflection of our often shallow and glib society. Great art collections are not dependent on the amount of money spent on them; it’s of no consequence whether you spend £5,000 or £5m on a painting: it is all about finding an artist’s creation that touches your soul, makes your heart skip a beat; it is about that intangible connection you

experience when you connect with a great work of art.

Art, like music, is a vibration and can stir certain emotions inside of us: to experience the sort of art which touches your soul, be discerning, ignore the Emperor’s new clothes – seek out works of integrity, depth and beauty – art that will enrich your life and the lives of those around you.Steer clear of works by artists whose art very often reflects their own shallow characters and desire for fame and celebrity over lasting substance and genuine greatness: you want to find works of lasting value by artists who have an insatiable and burning passion to create great works, always demanding more of themselves and pushing the barriers: whose desire to paint is so strong that it consumes their every waking moment and touches every bone of their body. Just as we choose to surround ourselves with genuine people of depth and meaning for all the positive benefits that it gives us, so too should we search for art of similar values.

As an art consultant, one of my greatest pleasures is working with clients who have not only themselves, but also their children in mind when building their art collections: thinking carefully about not only what they love, but what will also give lasting pleasure to the family as a whole as time goes by. The art then becomes part of their children’s childhood: memories of past times, a living part of their ‘now’, and it will then go on to form part of their future when works are inherited in years to come. Thus the art becomes more than just an object of beauty – its meaning evolves to become far deeper and multifaceted.

For children, the journey of discovery can start long before they learn about appreciating actual works of art: looking, experiencing and enjoying nature’s permanent art exhibition: sunlight dancing on water, a field of poppies blowing in the wind, the feathers of a preening peacock, the texture of a gnarled old tree trunk, a rainbow magically appearing in front of their eyes encouraging a lasting awareness of what is around them. It is hugely rewarding to see children growing up with great art around them – it encourages ‘the eye’ and helps them to appreciate so much more visually as they grow up.

“Great art collections are powerful and meaningful legacies to leave our children and future generations.”

“One of my greatest pleasures is working with clients who have not only themselves, but also their children in mind when building their art collections”

“The artist is a receptacle for emotions that come from all over the place; from the sky, from the earth, from a scrap of paper, from a passing shape, from a spider’s web.” Pablo Picasso

Many great art collections grow in value over the years if the collector is consistent, sticks to core values, is well advised on provenance, previous auction prices and so on, does the proper research and, most importantly, uses their common sense. Quality is paramount: all artists have good days and bad days, it is important to get to know the works by the artist you are collecting – don’t just buy the name – collect the work. Stick to less prolific artists: generally speaking, works by artists who churn them out tend to have less depth and lasting value, both visually and financially.

“Success is dangerous. One begins to copy oneself, and to copy oneself is more dangerous than to copy others. It leads to sterility.” Pablo Picasso

I would always recommend finding a reputable dealer/gallery and ask lots of questions about the work and the artist: how widely is the artist exhibited, locally or internationally, who else collects the artist’s work?

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Beware of buying at the top end of the market: do your research. Some great works are coming on to the market at the moment: works that would not have been seen five or more years ago and they are naturally fetching high prices due to their scarcity, but this does give us a chance to access some truly great works.

There are many incredible contemporary artists out there whose names haven’t hit the limelight yet and are therefore more affordable: look for reputable galleries exhibiting an artist for the first time – they obviously believe in the artist or they wouldn’t be exhibiting the work and it may be a good time to buy whilst the prices are relatively low.

“It is inspiring for future generations to know as much as possible about the artwork and why you bought it ”

A few galleries can be a little over-hyped and over-priced, but most galleries are really great filters to find the best work and they are usually as passionate about the works as the artists who created them.

Good galleries will help and guide you: knowing that you will come back to them if they have looked after you well – it is often worthwhile asking about artists’ work outside of an exhibition and ask to be kept on the waiting list in case a real gem comes up.

It is inspiring for future generations to know as much as possible about the artwork and why you bought it: keeping records of where and when you bought it, how much you paid and so on, can all be fascinating material for future generations.

I passionately believe that art should be for all, I don’t believe it should be an elitist hobby, it is something that should be accessible to every one of all ages: the more you look, the more you will discover, the more you will enjoy.

There is some art out there which isn’t worth the time of day, but rather like having to kiss an awful lot of frogs to get to your prince - and, in a way, that is all part of the process – it just means that when you do find the perfect piece that you really connect with, it really is worth it and you will treasure it even more, but most importantly so will your children and future generations.

“Works of Art, in my opinion, are the only objects in the material universe that possess internal order, and that is why, though I don’t believe that only art matters, I do believe in Art for Art’s sake.” E M Forster.

www.lisasharpeca.com


experts

We are often asked to advise on facilitating such a move, taking into account legal and commercial steps which are needed to ensure the business is enhanced by the new addition, whilst maintaining the heritage and reputation of the business as family owned and managed.

Reaching the Critical StageMany family businesses have only family members in critical management and developmental roles. Historically, external advice could have been sought from lawyers, accountants and other professionals. However, there may come a time when the business needs to look outside itself for someone to take on a key role such as finance, marketing or even a Managing Director.

The question then arises as to how you protect your cherished family business whilst simultaneously developing and expanding for future offspring. Clearly careful planning is needed and it is

often tricky to integrate an entirely external hire. We are often also asked about internal promotions and how wider family members such as in-laws or cousins can be brought in.

Legal ConsiderationsThe first step will be to negotiate a mutually advantageous contract with the new arrival, not only providing for a market level remuneration but also including:

Incentivisation is key and may include a bonus structure, possibly by way of shares or share options in the future. In this way your new Board member genuinely feels part of the team and has a similar investment in the future of the business to the family members.

As a counterweight to this it is often a good idea to increase shareholder (and therefore family) control over

FRESH THINKINGMany successful family businesses reach a critical point in their development when consideration is given to bringing a significant non family member into the management team. Richard Lane and Bryony Cove of Farrer & Co discuss why this can be a great way to bring fresh ideas and new motivation to a business.

Exit clauses for both sides at breakpoints of, say, three, six and twelve months

Share buyback clauses and confidentiality clauses in the event of an exit

Restrictive covenants in terms of any future role with a competitor

Remuneration package to include appropriate incentives

“There may come a time when the business needs to look outside itself for someone to take on a key role such as finance, marketing or even a managing director”


experts

certain aspects of the business, such as dividend policy and share transfers.

This can be achieved through a Shareholders’ Agreement, which remains hidden from public view (unlike the Articles of a company), but is a legally binding document that will regulate certain aspects of how the family owners can control not only their own shareholdings and dividend stream, but also the fundamental decision making of the business.

Clearly there is a delicate balance to be achieved whereby the Board can still run the day to day management of the business but family members, particularly those that are not on the Board, do not feel that the new arrival will somehow sweep away the family business’ traditions and practices.

“What is needed is communication. Not only among the family but also with the wider business and certainly with the new ‘outside’ member of the Board.”

“Radical change can be very hard in a family business and communication is the key to a smooth transition.”

Another issue to consider is a Shareholders’ Agreement which deals with possible management buyouts in the future. This would be linked to the share transfer provisions, possibly granting options to core family members to buy the shares of those wishing to sell or dispose in the future.

Consideration might also be given to the way in which shares pass under family members’ wills and upon divorce or bankruptcy. These are much wider issues but they do come into sharp relief in situations such as this.

Family ConstitutionsThe Family Constitution is a hot topic but is fundamentally no more than a private non-binding agreement among family members about how they will conduct their affairs when business and personal matters have a degree of overlap. This can be

especially important where there is a family business. Generally the Family Constitution would not be available to non family members but the values and aims of the family can be further distilled into a short Family Code or Ethos which can broadly be disseminated to the whole business or to the Board and senior members of staff.

Such a document assists greatly in providing direction for the Board and senior managers – they know where the family want the business to go and feel that they have a stake in enabling the family and business to meet their goals.

Emotional ResponseIt is vital that all family members involved in the business should be listened to. Simmering resentments can turn very nasty and in extreme situations can result in litigation, which no family wants. Professional advisers can play a useful role in facilitating open and honest discussion, providing full briefing sessions for junior members and putting legal concerns into the wider context.

It is also important to manage the expectations of family successors – there may be younger members of the family who are not quite ready to take on a senior role on the Board. To manage any feelings of disenfranchisement, it is wise to initiate a series of conversations with them about how their future role will develop, even within this new context of a non family member being involved at Board level.

CommunicationAs you can see from all the comments above, much of what is needed is communication not only among the family but also with the wider business and certainly with the new ‘outside’ member of the Board. Education

in terms of the values and aims of the family and where they want the business to go often helps focus the whole business on the future, resulting in ‘buy in’ from everyone. Radical change can be very hard in a family business and communication is the key to a smooth transition.

Many of our clients choose to engage consultants to oversee the process of bringing in a non family member to a senior position. They and we acknowledge that change may have a fundamental effect on the business as a whole. Obtaining appropriate and timely advice from your professional advisers will enable the process to be thoughtfully and carefully managed to the benefit of all.

Bryony Cove is a partner in the Private Client team and Richard Lane is a partner in the Corporate team and Head of Entrepreneurs & Families in Business Group at Farrer & Co.

www.farrer.co.uk

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The modern day Family Business has access to highly educated Next Generation family members who have often gained commercial awareness from outside, with good business acumen and a natural loyalty to the enterprise. This pool of talent is a significant factor in the success of the Family Business sector.

So what can we expect from the next generation of family business owners?KPMG recently held their second Summer School for Next Generation family business owners, where we conducted research in order to build a profile of family business owners of the future.

It is not surprising that the vast majority (73%) of the Next Generation are graduates and 80% already have experience of working outside of their family firm, but over half had chosen to cut their commercial teeth in a bigger organisation, which operates in a different sector to their own family enterprise. A third of the Next Generation decided to gain work experience in the same industry that their family business operates in. Over two-thirds of respondents said

FUTURE LEADERS OF FAMILY BUSINESSThe Family Business sector, a vital component of the UK economy which has shown real resilience in recent years, has not been immune from the continued economic uncertainty which has forced businesses to take a look at all aspects of their business performance. Having a strong executive team has never been more important as they steer the business through the most turbulent of times, writes Gary Deans, Head of UK Family Business at KPMG.

“Based on these results, the family business sector is looking very positive, at a time when business optimism is in short supply.”


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that they had always planned to enter the family business in some capacity, with over half planning to run the business until retirement (59%), however, this was a reduction on the 80% who answered this question in 2010, with an increase in the number of Next Generation respondents (14%) claiming that they only planned to take over their family firm for five to ten years.

Tax, regulation and employee issues were ranked the top three areas that the Next Generation of business owners were least looking forward to, with over a third singling out tax as the area which most worries them.

The complexity and volume of the UK tax system can look daunting to someone about to take up the reins of a business. However, the UK tax regime has generally been favourable to family businesses and there are some valuable reliefs in the system that relate specifically to the family business sector. Of course, more can always be done.

Despite the economic conditions of the last few years making some of our Next Generation leaders nervous about taking on the challenges of running their own business, growing the business remained the top priority, followed by entering new markets, and then defending the business from the threat of competition from the emerging markets.

Interestingly, the issue of managing debt, which was ranked as the second biggest priority by respondents last year, was not thought to be an issue for the Next Generation this year, suggesting that many family businesses

• A third of respondents said that the prolonged economic difficulties have made them apprehensive about taking responsibility for the family business

• 60 per cent of respondents did not believe that things will change substantially under their leadership within the business

• 40 per cent of respondents believe that structure is the biggest barrier to growth for a family business

• Nearly half (44 per cent) plan to take their family business in a new direction

• Over three-quarters (76 per cent) plan to hand the family business down to their own children

have spent the last few years working hard to reduce their debt levels.

Based on these results, the family business sector is looking very positive, at a time when business optimism is in short supply.

For many, valuable lessons around managing debt, costs and people have been learned observing their parents steer their businesses through years of very difficult economic times.

These lessons will be invaluable in years to come, and will shape the future of their own businesses.

Our future family business leaders come to their businesses with a good commercial awareness and a focus on growing their businesses, particularly through new and emerging markets, which is great news as this sector is a vital driver of economic growth and an important employer for many regions and the UK economy as a whole.

www.kpmg.com

“For many, valuable lessons around managing debt, costs and people have been learned observing their parents”

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ENTERPRISING FAMILIES

It’s amazing that family businesses are often overlooked in discussions about

entrepreneurship, especially given that there are so many outstanding examples; in the United Kingdom think Warburtons, Walkers Shortbread and Wm Grant & Sons, to name but a few.

‘Entrepreneur’ seems most often to be used to describe driven individuals who create great businesses, often overcoming many obstacles and challenges in the process. Family businesses certainly go through this stage, when the financial and emotional commitment of a family is often put on the line to support the vision of the business founder. But then what?

How is it that some families achieve entrepreneurial success, not just once but across generations? This statement may seem odd to those who accept uncritically the cliché that family businesses are fated to go from ‘clogs to clogs’ or ‘shirtsleeves to shirtsleeves’ in three generations. Statistics are often quoted about how few family businesses survive to the 3rd generation and if there are statistics then it must be true, mustn’t it?

For all we know the same may be true across the wider business community and until a comparison is made between family owned and other types of business we cannot be certain if families are any better or worse when it comes to surviving three generations. However, if we’re going to make progress in improving the fortunes of family businesses and the welfare of all those who are stakeholders in them,

It has been put to us that to understand how families ‘breed’ entrepreneurs you need to start with parenting styles, and the difference between ‘sculptors’ and ‘gardeners’.

The sculptor has ambitions for the child and will do all she can to guide and form the child so that they turn out right, ‘right’ being to the sculptor’s design. In comparison a gardener tries to cultivate the plant, caring for its roots, and with a bit of careful pruning from time to time waits for the right season in that plant’s existence for the flower to appear. A gardener doesn’t expect a flower to emerge just because s/he orders it to do so.

It’s a thought provoking comparison. We’ve seen something similar to this, when children are encouraged, often

we need to study the successes and learn from them. Part of our role as advisers who are privileged to work for many business families is to understand how they do what they do and then pass on information and ideas.

from a young age, to strive for a better education and life experience than their parents and to go out and make their way in the world. But this lasts only up to a point in time and that time is when the senior generation would like the next generation to ‘come back and take over responsibility for the family business.

Those that respond to the challenge of charting their own course through life can later be knocked off course when the seniors start to speak about how much they’d like the next generation to return and run the family business. From the next generation perspective, one day you’re happily pursuing your individual career and life goals; next you’re getting the heavy hints that it would be appreciated if you’d come back and lend a hand with running the business.

In fact sometimes the sentiment is a lot heavier; like “it would break your parents’ hearts” if you didn’t come back to run the business. When the next generation’s route back into the business is to sacrifice what they’ve been striving for, the effect on inter-generational entrepreneurship isn’t likely to be good.

Later we’ll mention some ideas to avoid the pitfalls, but first it is worth looking at another practice that some families have adopted in order to encourage entrepreneurship in the next generation.

Backing the savvy in your lineageAfter a family business has passed through the start-up phase the challenge becomes how to maintain an

Ken McCracken from Family Business Solutions discusses why family businesses are often overlooked in the conventional debate about entrepreneurship, and how many of them achieve entrepreneurial success across generations

“It’s amazing that family businesses are often overlooked in discussions about entrepreneurship, especially given that there are so many outstanding examples”


experts

entrepreneurial attitude whilst at the same time trying to run a mature business.

One way of doing this, if resources allow, is to set up a new ventures fund to support family members who want to start a new business. Family members are encouraged to present business plans and whoever is in charge of the fund (family members, advisers, experienced business people) decides which to back, much as would happen with a conventional private equity or business angel fund.

Usually investments are made on broadly commercial terms, maybe a bit softer to reflect kinship bonds, but the key driver for many families is to encourage entrepreneurship by backing the talent in their lineage.

In so doing they are also wise to the fact that this may lead to successes that diversify the family’s wealth, thereby managing the risk of the family having too many eggs in one basket. What else helps family business entrepreneurship?Here are some things that we’ve learned from clients.

Don’t overlook historyFamilies who create great dynasties over generations are good at telling the next generation the stories of success and failures from the past. This often motivates the next generation to take up the challenge of becoming authors of the next chapters in the family’s entrepreneurial story. It might seem small, but don’t underestimate the future benefits of creating a family history and getting the next generation to buy into it.

Family meetingsSince it is impossible to separate a family from its business, there must always be a forum where the interests and concerns of the family can be discussed. In a small family these discussions will occur spontaneously, whenever needed, and often take place over dinner, at weekends or on holiday.

Early exposure to business educationThe idea that getting the next generation involved and interested in business at an early age is felt to increase the chance of them wanting to continue in business in the future. Note, that this doesn’t necessarily have to be the same business as was run by their ancestors, although no doubt the seniors might have this in mind as a desirable outcome.

It’s more about youngsters being exposed to business life at an early age so that the idea of being in business takes hold of their imagination. This is less likely if the next generation grow up viewing the business that is currently part of their family life as a distant place where unknown and often stressful things appear to happen.

“Since it is impossible to separate a family from its business, there must always be a forum where the interests and concerns of the family can be discussed”

Gaining experience elsewhereMany families insist that family members gain experience elsewhere before they can apply to join the family business. This might be to gain a qualification or work elsewhere, and might involve the family member gaining a promotion as evidence that they can cut it before they join the family business.

There can be a mixture of reasons for this policy, but one of the advantages is that family members can bring back to the business knowledge and ideas that will help the keep the family’s business competitively healthy.

Transparent succession planning If the next generation don’t know when or how they will come into ownership and management control of the business, they are more likely to feel uncertain about the future and less likely to be willing to take entrepreneurial decisions.

Who in the next generation will stick their neck out and sow the seeds of new entrepreneurial ventures when it is the seniors who will reap whatever harvest that brings? The next generation are likely to need more than a vague promise that “one day all this will be yours”.

It’s far better for both generations to plan for this transition and in doing so maybe take on some of the other ideas mentioned in this article in order to encourage and support multi-generational entrepreneurship as part of the family’s continuing legacy.

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GIVE BACKAs family businesses become more successful, some feel compelled to find a way to help make their local communities and the world a better place, either through charitable giving, projects or giving circles.

We can help design and produce publications that showcase good giving and help you to:

Identify your philanthropic purpose • Design a brand to encapsulate your purpose, • commitment, values, vision and actions Produce a tailored and beautifully crafted book, •

diary or website

“Be the change you want to see in the world”Mahatma Gandhi

For further information visit www.familyconstitution.co.uk /philanthropy


GIVE BACKAs family businesses become more successful, some feel compelled to find a way to help make their local communities and the world a better place, either through charitable giving, projects or giving circles.

We can help design and produce publications that showcase good giving and help you to:

Identify your philanthropic purpose • Design a brand to encapsulate your purpose, • commitment, values, vision and actions Produce a tailored and beautifully crafted book, •

diary or website

“Be the change you want to see in the world”Mahatma Gandhi

For further information visit www.familyconstitution.co.uk /philanthropy



www.familyconstitution.co.uk/philanthropy

PROSPERITY

RECRUITING AT THE TOPRupert Phelps

A NEW ERA OF INFORMATIONJohnathan Lidster

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With family wealth comes much responsibility. In ‘Prosperity’ our experts explore many of the topics which wealthy families often have to face.

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BNY Mellon

DODGY PRACTICES EXPOSEDSimon WebleyInstitute of Business Ethics

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SOCIAL INVESTINGSilja Nyboe Andersen84Big Issue Invest

Global Partnership Family Offices

RECRUTIING AT THE TOP

In modern times Seward Prosser Mellon remarked on his father, Lieutenant General Richard King

Mellon: “Dad’s two greatest assets were choosing people and foresight”. These are skills which one would hope to find in a soldier, and the art of delegation to suitable people is arguably the most useful of all abilities for those in positions of authority and substance.

Today there is very little understanding of the actual nature of family offices (FO) in the financial market generally, and the headhunting profession specifically. This means that it is even harder for families to find the right people to advise them and manage their affairs.

The character and abilities of family advisors is the fundamental issue and dwarfs later considerations of the ‘portable alpha’ variety. Get the wrong advisor, even with stellar skills, and significant trouble is in the incubator.There are three essential stages to the process of finding suitable senior advisors: attract, recruit and retain. The first is actually a necessary basis for the second and the last often the most challenging of all. The fundamental truth is that the hiring FO is buying, and the best people are likely to need persuading to leave their current roles.

The U.S. Trust/Campden Research North American Family Office Survey 2009 found that 62% of FOs said that finding the right people for their

loyal, committed, understanding, ambassadorial, diplomatic and well-rounded in mind. These are sometime called the ‘soft’ skills but, as Professor Randel S. Carlock has remarked, they are often actually the hardest; hardest also in the sense of finding them.

The head of a FO represents one of the most desired and sought people in finance, namely the buy-side decision maker of a rich family. Such people need to be rigorous and perceptive since they will be approached and courted by a multitude of sell-side salespeople, intent on a close. Most

advisors and owner-managers of SFOs will naturally want to deal with the actual decision maker or ‘trigger puller’ where they place their capital. In considering the key skills required by FO staffers one should remember that in broad terms there are three types: family member, service side and investments side. Wherever a FO staffer has come from, they should ideally have a number of characteristics which are rarely found together.

I would begin with another mediaeval concept (albeit with a classical origin): ‘Know thyself’. This is axiomatic to integrity. Allied to this is an ability to know others and the FO must retain the personal touch. The ‘others’ also must include the rich and being comfortable with them. It should also be noted that there is much less of a distinction between client facing and

office was ‘very difficult’ or ‘difficult’. It stated that the ‘most critical issue’ facing FOs (43%) was hiring and retaining staff. One particular area of skills shortfall identified was that of financial analysts.

The survey also endorsed the evident fact that by far the two most significant routes (63%) to finding staff were ‘word of mouth’ and existing professional relationships. Head-hunters came third at 44%.

As well as the oft mentioned work/ life balance and flexibility that may be attractive in an SFO position there also need to be more tangible elements to retain staff. Co-investment is an important current theme in the FO sector. It is generally used to indicate an SFO admitting congenial families to partner on particular deals rather than as a fellow ‘full member’ of the office.

But it is also a potentially effective tool to forge a long-lasting and well-connected relationship with senior staffers. This can be challenging to structure and implement, but it is very effective in giving life to the principle of senior staff having a stake in the concern they manage.

FO work is sometimes highly confidential in nature, and likely to include information and experiences that would never be encountered in other financial environments.

Staff may personally witness family members arguing at home or have to address detailed staff grievances. Children may seek to use them as a lever against parents or just preoccupy undue amounts of time on trivial matters.

A wish-list of underlying personal characteristics that may be required in senior SFO staff is dizzying. Optimum traits might include being: discreet, sensitive, thick skinned,

Fundamental for a family is whom they admit to their inner circle. In fact, this can mean nothing less than whom they allow to become part of their wider family. Rupert Phelps from BNY Mellon discusses the issues surrounding recruitment of senior level executives forsingle family offices.

“Dad’s two greatest assets were choosing people and foresight. These are skills which one would hope to find in a soldier”

“There are three essential stages to the process of finding suitable senior advisors: attract, recruit and retain”

prosperity


back office in the world of SFOs; all employees are likely to interact with family members.

Personal characteristics are actually more important than professional skills as the former are the bedrock of the latter. Similarly, choosing the right close advisors should come before choosing the right individual managers of capital. Actual skills required will also be very dependent on the role senior staff are actually expected to fill. Lack of clearly defined roles can lead to a mismatch of expectations and retention problems.

There is also the question of scale if a family is considering the expense of a full time quality CIO as well as ‘head’. The UBS/Campden European FO Survey 2010 described the average cost of running a SFO in Europe as about 50 basis points (bps) of assets under management. For a small SFO

of €250m, this would equate to a ‘budget’ of €1.25m, which is not a substantial amount of money to run an office. These basic economics must loom large in the thinking of families who are considering their options as to the infrastructure they put in place to advise them and manage their assets.

So is it possible for families to find advisors who meet the core critiera discussed? The FO sector has certainly spawned some very long professional relationships. Stuart Corbyn joined the Cadogan Estate in 1986 and left 22 years later in 2008.

In that time period the Estate’s assets rose from a valuation of £250m (with a rental income of £4m) to £3bn (with rental income of around £80m). One of the longest unbroken careers must surely be Richard Fitzalan Howard, Chairman of Asset Management at

Fleming Family & Partners. He joined Robert Fleming Holdings in 1975 from Corpus Christi College, Oxford.The SFO sector in London is actually richly endowed with a wide array of talented and decent senior advisors. These men and women often have finer minds, are better read and more broadly educated than many others in more mainstream finance.

It is clearly possible for the broader opportunities and frankly slightly unpredictable kaleidoscope of life within the FO world to attract able people of aptitude and expertise. Here one’s working hours and resting moments may become intertwined by an indistinguishable series of indefinable stages over the passing years. The best advice is to ensure that an advisor only enagages to serve a family of whom they are happy to become a part.

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DODGY PRACTICES EXPOSED

Simon Webley, Research Director at the Institute of Business Ethics discusses why the recent headlines about News International should remind all family businesses that how they conduct themselves as a family, and as a business, can have serious consequences on their reputation and, in turn, their long-term success.

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This applies to any size of business whether listed or unlisted, public or privately owned. These groups consist of:

Employees Customers Suppliers Those providing money Society (either local or national)

If a company’s reputation with any of these is deteriorating, the business is in jeopardy. For each one of these groups has a financial connection with the organisation. Employees are paid, but if they will not work for you, you do not have a business. Customers pay you, but if they do not approve or trust you, they will not buy from you.

News International’s News of the World found this out. If suppliers and sub-contractors are not paid according to contract, they are unlikely to continue to provide you with the products and services that are vital to survival of your business. Most businesses require financial services, not least credit. Part of credit worthiness is based on your organisation’s reputation in its use of financial services.

It is in these relationships that an ethical compass is needed. It will serve to guide both decision making and conduct when it is not immediately clear what to do.

www.ibe.org.uk

In mid-July, The Times, a News International owned paper, carried a story of David Wighton which was headed “The family business is not the poor relation”. He argued that “it would be unfortunate if the collateral damage spread from a lost reputation to another important institution — the family firm”.

The suggestion had been made that “unfettered family control has led to weak governance, nepotism and the squandering of shareholders’ money”. One of the issues which has received considerable attention is the governance structure of News International. The Murdoch family own 12% of News Corp shares but has 40% of the voting shares. It still has to be proved that the apparent unethical behaviour at the UK subsidiary was in fact illegal.

What we do know is that those buying advertising space in the News of the World were refusing to continue and without these major customers there was no future for that brand. In other words, it showed clearly that when reputation is diminished – or in this case, shattered – it is very difficult to stay in business. Whether this episode leads to the restructuring of the whole business, including changes in top management, remains to be seen. This would be the only sure way to restore confidence and reputation. For if the tone from the top is uncertain, there is little chance of future success.

“One general conclusion is that all organisations need an ethical compass.Good practice (north) and bad practice (south)”

News International is likely to be remembered for many years as the organisation that allowed

dodgy practices. It is a family owned business. It does not matter that this happened in part of a subsidiary company in the UK; the brand is tarnished, some would say irrevocably.

This much published drama serves to remind us that no organisation is exempt from what is probably the only uninsurable risk – a severe blow to its reputation. This is known as integrity risk. It can destroy a business of any size and age. One of the most dramatic examples is the collapse of Barings Bank in 1995. It is a sobering example of greed and bad management. Senior managers continued to extend credit to its Singapore office, which had made handsome profits for a few years. Undetected by them, a trader had taken an exposed position in currency forward trading. It was so big that when the markets closed, the bank’s liabilities exceeded its assets and it was sold for £1. The only defence against this is self insurance to which we return later.

This whole unsavoury episode has however, introduced a badly needed public discussion of business ethics; not only in the media, but more widely. One general conclusion is that all organisations need an ethical compass. In using this metaphor, the critical issue is to set the points of such a compass. It is fairly straightforward to set what is considered to be good practice (North) and unacceptable practice (South). What causes many problems are the East and West points. These involve

“Customers pay you, but if they do not approve or trust you, they will not buy from you”

right vs. right issues where decisions involved two parties, both of which have equal claims. A code of business ethics will normally provide employees in any size of company with guidance on issues of this sort that they may meet in their day-to-day business life. So how about self insurance integrity risk? Most ethical dilemmas arise in relation to five groups of people each of whom are capable of bringing a business to its knees.

prosperity


“The Aero SuperSports defines a new automotive trend. …. Lightweight luxury.

21st century coach building, the latest BMW Drivetrain technology and class leading aluminum chassis technology provide an unrivaled experience. Proof of this is the performance of the most beautiful car in the FFSA GT Racing Championships.

It is a celebration of our love of cars and the romance of travel and was a fitting model to announce during Morgan’s Centenary year.”

T H E A E R O S U P E R S P O R T S

Car shown LIMITED EDITION !"#"$%&'()*#)+(',)-./('-/,'&0)123#4555")6,'789)'897():',;)13<4=>=)(?):8@&,'A),9)&B()',8C")D:E@%8$)F.($)@,90.;/&%,9)%9);/7)G$%&'(0H255I;J):,')&B()6,'789)'897(K)L'M89)2N">)G2O">J)P)>!"5)G#">J)Q?&'8)L'M89)>!"#)G#"2J)P)=N"O)G!"<J")R,;M%9(C)3="!)G22"2J)P)!="=)GO"3J))RD3)(;%00%,90)3O<)P)2><"N)7HI;")F,');,'()%9:,';8&%,9)@,9&8@&)A,.')$,@8$)C(8$('),')S%0%&);,'789P;,&,'"@,".I"

double page ad.indd 1 6/1/2010 9:59:21 AM

While many families are accustomed to separating traditional philanthropy and

investing for growth (i.e. two separate pools of money with very different return expectations), Big Issue Invest and the wider world of social investing are demonstrating new models for merging high social impact with entrepreneurial innovation.

Whilst ’venture philanthropy’ has become a growing area of interest in recent years, there are further opportunities to invest in enterprises that can provide both financial and social returns.

Social BusinessPhilanthropy can be very powerful and there is a strong culture of impactful giving amongst many families throughout Europe. However, in many cases investing in social businesses can leverage a far greater impact; social returns, financial returns and the invaluable experience of bringing the family’s instrumental business skills to the table as a human capital investment.As opposed to creating dependence, which is often an unintentional consequence of traditional

philanthropy, social enterprises are solving a social problem through the delivery of goods and/or services.

This can be a win-win for the enterprise and the community and becomes a sustainable way to merge profit with people and planet.Big Issue Invest

Big Issue Invest grew out of the Big Issue and shares it’s ethos “a hand up, not a handout”. The Big Issue was set up in 1991 to provide homeless and vulnerably housed people with

SOCIAL INVESTINGSilja Nyboe Andersen is an ambassador for Big Issue Invest. She is also part of the 5th generation of her own family’s business and is the acting chairman for a family owned forestry business based in Denmark.

the opportunity to earn a legitimate income. Each week the BIG ISSUE is published; high quality news across a spectrum of issues with cutting edge political commentary.

Big Issue vendors buy the magazine for £1 and sell it for £2, keeping £1 per copy or 100% of the profit. This simple model allows every single vendor to become a micro business in their own right. In addition, all vendors receive training and support to address the issues that led them to becoming homeless.

“Big Issue Invest believes that making business part of the fundamental premise of growth within the social sector is key to success.”

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A Cool Investment

Cool2Care is family owned social enterprise. It was founded in late 2007 by Phil Conway, a former senior IBM executive, who has a son of his own with physical and learning disabilities.

Phil and his family experienced first hand how important continuous and consistent care is and identified a need in the market for trained, flexible childcare. Cool2Care was launched as a pilot in Surrey and Birmingham. Following the success of the pilots, the model was replicated. Cool2Care now has over 60 members of staff and offers services across most of the UK.

The company aims to be the leading provider of one-to-one matching services of care workers for disabled children and young people and their families in the UK. Cool2Care acts as a ‘matchmaker’ whereby the carers are selected and employed directly by the family rather than by a care agency.

This enables families to develop long-term relationship with the same carer. Through its business model, Cool2Care is able to deliver significant financial and social benefits for families and local authorities.

Impact

Of the estimated 770,000 disabled young children in the UK, less than one in ten (8%) receives care from their Local Authority, which leaves many families struggling with the demands of raising a disabled child. It can lead to parents suffering from physical and mental exhaustion, isolation, inability to work or disabled young people being socially excluded and denied access to services.

Cool2Care changes this situation by providing a carer who becomes a friend to the disabled child and provides parents with the chance to take regular breaks and support in their caring roles. Cool2Care’s model has the potential to be replicated in other sectors, such as care for the elderly and the sick, so transforming how care services are delivered.

www.cool2care.co.uk/

The Big Issue has become a household name, widely known throughout the UK. Today it is read by over 588,000 people every week and it provides an income for over 2,500 homeless and vulnerably housed vendors.

Big Issue Invest was set up in 2005 as the social investment arm of the Big Issue to finance and scale up the businesses that seek to create opportunity and dismantle poverty.

Big Issue Invest believes that making business part of the fundamental premise of growth within the social sector is key to success. Therefore Big issue Invest invests in aspiring social enterprises that want to grow and have a stated, monitored and measured social impact. To date, Big Issue Invest has invested in more than 80 social enterprises.

looked at these two seemingly separate worlds that I have found to have many links and similarities.

The success of most family businesses stems from passionate entrepreneurship, which in many cases has been nurtured through generations. For centuries the same families have supported society directly through philanthropic giving.

These families have a long history of innovation, sustainable growth, deep community roots, entrepreneurship and family values. The same can be said for social entrepreneurs.Whilst most families are accustomed to traditional giving; Big Issue Invest and the world of social investment are aiming to increase the focus and the importance of social entrepreneurs to philanthropic impact – and the need to invest in them.

Families who place a high value on society and who recognise the opportunities present in social investing are starting to explore ways to link their assets and skills with social investing. This is a very interesting journey and it is increasingly common for families to adopt a social investing strategy within their portfolios.

Big Issue Invest has several pioneering investors within the family arena as families have been amongst the first to recognise that investing in social businesses is an innovative way of bringing together entrepreneurship and investment combined with strong social values.

The skills and knowledge that has been obtained through generations in family businesses can be most useful for social entrepreneurs. Hence, as an alternative or complementary to an investment, direct engagement with a social enterprise can be of great value for both the social entrepreneur, who gets invaluable support and advice, but also for the family member, who gets a unique opportunity to directly support and engage with a social business.

www.bigissueinvest.com

“F amilies have been amongst the first to recognise that investing in social businesses is an innovative way of bringing together entrepreneurship and investment combined with strong social values”

The interplay between a strong business run with professionalism and vision and an entrepreneur’s deep-rooted commitment to making a difference is fundamental to the Big Issue Invest. By replicating and harnessing the desire to do good with core business values helps significantly to create a fundamentally strong and fairer society.

Families and Social InvestmentsComing from a family business background and being passionately involved in social investing, I have

prosperity


A NEW ERA OF IN ORMATIONJonathan Lidster from Global Partnership Family Offices explores why it’s so important for family businesses and family offices to be aware of how the social media explosion can impact their security and confidentiality.


Nicholas Negroponte, the visionary founder of MIT’s Media Lab, described in his

book Being Digital in 1995 how customised daily news would one day find you through ‘personal filters’ that would understand your desires and interests. Almost two decades later the internet has blitzed us with ever increasing deluges of unfiltered information causing information overload.

Wealthy families, entrepreneurs, wealth advisors and family offices by their nature are inquisitive but above all highly skeptical and paranoid, so confidentiality rules. How do you find what you need whilst living a busy life, coupled with trying to stay ‘off the radar’? Sometimes private networks of contacts can only go so far, and we must develop more technologically advanced ways of sourcing what we need to know.

There are numerous places now to find information and interact with ‘like minded individuals’. The last 10 years has changed how we live for ever, the introduction of Facebook, LinkedIn, Plaxo, Myspace, ASmallWorld and other social media sites. The future of our children, and businesses, looks to evolve into a world where information on anything and anyone is just a few clicks away. Privacy will be something we all look for, not just reserved for the ultra rich, Royalty or celebrities.

As Eric Schmidt, Google’s Chief Executive, points out, there were five exabytes (billion gigabytes) of information created between the dawn of civilisation up to 2003, yet that much digital data is now generated in just two days. So we all need a little help in sorting out - smart filtering - which of those gazillions of unmediated news items will better arm us for business and the decisions we all have to make. As the American writer Clay Shirky argues, “There’s no such thing as information overload, there’s only filter failure”.

Gaining access to information and sharing information through social networks is easier now than it ever has been. What the internet does do, however, is allows us access but for a price. This price usually is information about us as individuals. This requirement of the internet does have its issues though, certainly for wealthy families, family businesses and family offices. Security is hugely important, and in a paperless world the threat can be serious. For family businesses

it’s a huge dilemma. On one hand we all want privacy as this creates security for our businesses and our families. On the other hand we have to be seen in the world as this is what generates business, contacts and relationships.

For the more wealthy, the challenges social and business networking sites pose is to a certain degree taken charge of by their family offices. For family businesses this isn’t necessarily a luxury they have. There are, however, several firms, whether it be advisors or PR agents, who can assist a family and the business through the perils that the internet and social media present.

Given that security experts say it takes as few as three pieces of personal information such as full name, date of birth and parents’ names to commit identity theft, this has clear implications for both the personal and professional security of families and the organisations that serve them.

The kind of activities these sites encourage, such as sharing personal information, photos, holiday plans and opinions, all create their own risks to ultra high net worth families. It is for this reason that monitoring and managing what family members choose to share on these sites can come under the remit of the family office or suitable individual within

Ideas for family offices and family businesses to be more ‘online safe’

• Make web security part of your wider security agenda

• Be strict when enforcing consequences – this can have a positive effect on the behaviour of the individual and their peers who see breaches of security being taken seriously

• Address issues as soon as they arise

• Work with the extended family as far as possible – communicate with them throughout the development and implementation process

• Involve the next generation in policy development – the teenage years are about rebellion but if you include them in the decision-making process they will feel empowered and they are less likely to feel alienated

• Encourage the use of a secure family website as opposed to open social networking sites

the family business. Although family members may feel there is little harm in sharing such information on social networking sites, here are four main risk areas:

• Personal security: there is a risk of a criminal obtaining an individual’s information and using this to harm the individual/commit a crime.

• Financial security: the information people share on social networking sites can open them up to identity theft and fraud.

• Professional risk: individual job prospects and even the ability to enter higher education can be impacted by negative or inappropriate material found on the internet.

• Damaging family name/reputation: this has always been a consideration for business owning and ultra high net worth families but becomes even more immediate with the instant nature of online publishing.

Sharing family information online can be very dangerous. Revealing addresses, even school addresses, and details of the family’s whereabouts increases the risk of the family being targeted for anything from kidnap to identity theft.

However, it is not just the security and privacy of the family that is jeopardised by oversharing on social networking sites, it is also the reputation of both the family business and the individual that can be compromised.

Vitally, the family office or family business has a role in educating family members on the risks that social networking sites can pose. Security breaches are rarely intentional, so once the family become aware of the dangers, they are often more than willing to cooperate with the rules.

If the family is intent on using social networking sites, a set of clear rules concerning acceptable and safe use can reinforce the educational role played by the family office or family business. Reputation can be something lost very quickly indeed with huge consequences to the family and family business. Reputation can take years if not generations to restore, and remember, although it would be easy to assume these problems are limited to next gens, senior family members use social networking sites too.

www.the-globalpartnership.com

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Get the look right Profile use is valuable – structure your profile to properly reflect your family business including using the background to make an impact and adding links to your corporate website. Personalised backgrounds stand out.

Write a social media policy If several staff are responsible for your social media and different branches run their own social media accounts, how do you know everyone representing your brand is using the right tone of voice? Write guidelines on the tone of voice you’d like to have and inform all branches of this policy. Publicise it

Once you become a social resource for customers you have to stick with it and be there on a regular and frequent basis. Using social networks is time consuming, so schedule social time for yourself and your marketing staff. You want to have enough time each day to monitor conversations, converse with customers, and to send out new messages.

Schedule social time Once you become a social resource for customers you have to stick with it and be there on a regular and frequent basis. Using social networks is time consuming, so schedule social time for yourself and your marketing staff. You want to have enough time each day to monitor conversations, converse with customers, and to send out new messages.

Be Valuable Useful content, info, contacts will all make you an asset in the eyes of others. It also encourages loyalty and a sense of obligation – and ultimately makes it much harder to ignore you when you do want their attention.

Compact Make sure you pack your tweets – compress your message so that it is around 100-120 characters instead of using all 140 characters. This leaves room for your audience to re-tweet if they like. Use hashtags and handles to make your tweets findable and to reach out to relevant Twitterers.

Bring in new customers Give people a reason to ‘Like’ you or get recommended — perhaps through Facebook-only deals, great customer service, expert guidance, viral videos or fun competitions. It’s also important to engage in discussions online.

Find niche networks within your industryThere are social networks popping up everywhere. Many are specifically targeted to a particular niche. Find social networks within your niche and use them. The traffic may not be as high as Facebook and Twitter, but you can easily become a leader within smaller networks.

GoogleSet up a Google Profile for your personal name so people can find you and your family business. Add all of your websites or links to it.

Do Not Spam Family businesses should refrain from using anything that sounds like spam. The biggest culprit here is automated replies. Online applications can create automated replies to personal comments or messages but can look like spam. Seeing these sorts of replies on a business’s social media page is an immediate deterrent to potential clients..


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panel

I run a fairly large family business and am looking to grow – how can acquisitions help me?

Often the most difficult thing for a family business looking to make acquisitions is finding those businesses which have the

same values and culture. Some of the main business reasons for mergers and acquisitions include:

• Synergy: The idea that by combining business activities, performance will increase and costs will decrease, complementing strengths and weaknesses.

• Diversification: A company that merges to diversify may acquire another company in a seemingly unrelated industry in order to reduce the impact of a particular industry’s performance on its profitability

• Growth: Mergers can give the acquiring company an opportunity to grow market share, buying a competitor’s business for a price.

• Increase Supply-Chain Pricing Power: By buying out one of its suppliers or one of the distributors, a business can eliminate a level of costs.

• Eliminate Competition: Many M&A deals allow the acquirer to eliminate future competition and gain a larger market share in its product’s market. The downside of this is that a large premium is usually required to convince the target company’s shareholders to accept the offer.

Whilst these are all as equally relevant to a family business, there are a couple of specific motivators which may lead a family business down the acquisition trail:

• Giving multiple family members the ability to have leadership opportunities

• Enabling differing interest and skills of family members to be utilised. www.wellersaccountants.co.uk

Norma StewartPartner

Wellers

Specialism: M & A

Our family business has a small Final Salary Pension Scheme, which is in deficit. We have always been

committed to meeting our obligations towards our staff, whom we see as family. How can we make the best use of resources to further reassure our loyal scheme members?

The size of a deficit is down to agreed assumptions. An important assumption relates to future investment returns. The

more conservative the assumptions, the greater the deficit, and vice versa. Whilst no assumptions should ever be rash, if there are grounds for assuming more positive returns, then these should be considered. Otherwise, you can end up making an over-provision and at the same time weakening the business and the prospects of current employees.

A system of investment management whereby external fund managers are selected, monitored and replaced when necessary, if sufficiently robust, can produce the level of returns that can justify higher growth assumptions. Great care needs to be taken in relying on past performance, which offers no guarantees. Also, by pooling resources, economies of scale can be exploited to maximum advantage so that cost savings can be achieved. Clearly, if overall

returns can be increased and costs reduced, you can demonstrate to

both staff and scheme members that you are making good use

of resources.

www.daviddefreitas.co.uk

The title ‘Partner’ is a marketing term used to describe St. James’s Place representatives

www.daviddefreitas.co.uk

David de FreitasPartner

St. James’st Place

Specialism: Wealth Management

T H E P RO F E S S I O N A L S

If you would like to be

a part of the panel,

please email the Editor:

[email protected]

for more information

Q Q

A

A

Whether it be legal, financial, sales or marketing, our experts are here to guide you and your family business in the right direction.


panel

Rachael RodgersDirector Heir Tight Wills & Estate PlanningSpecialism:

Wills and Estate planning

As a family business, should we seek anything in particular from our professional advisers?

Like any business, your future success may depend on the input you get from the professional advisers that you select to work

with. Leading a family business can be a difficult juggling act and so, in a similar way that the management team is put together due to the skills that they possess, the right choice of adviser will give you the support that you need.

Professional advisers that have worked with family businesses will have developed skills to assist in understanding the special issues that these businesses encounter. It is important to ask for credentials prior to engaging professionals to ensure you get the skills that meet your needs.

It is very important to develop the right relationships and to feel comfortable dealing with the adviser of choice - inevitably you will be discussing personal issues that are important to you and it is essential to have an adviser who can deal with them professionally, and understand your needs fully.

Once an adviser has been selected, define their role - that way there can be no confusion as to what they are being engaged to do, be it professional services such as an audit or tax advice, input on succession planning and developing the next generation, or developing a family business governance structure.

Once appointed, you need to work at the relationship and work openly and honestly with your advisers of choice in order to meet your personal needs and the financial and commercial goals of your business.

www.pawley-malyon.com

Q

A

I’ve been told I should make Lasting Powers of Attorney to protect both my family and my family business.

What are LPA’s? And do I really need to consider them now, at my age?

LPA’s are documents made while you have mental capacity, to appoint people to make decisions for you when you can no longer

make them. Every adult should have them; to provide for their families and their businesses in the event of an illness, an accident, dementia or a stroke… which could happen to anybody at any time.

The Government’s ‘Court of Protection’ takes over running the affairs of anybody mentally incapacitated who has not made LPA’s. They seize all your assets – including JOINT assets - and then appoint a ‘deputy’ - who could be a total stranger, not even your spouse, but who will make all the decisions on your behalf; how your money is spent, where you live, treatment you receive, even what you eat and wear - until you either recover, or die, and if you have a stroke or an accident, you could live like that for another 40, 50, 60 years.

Over 60,000 people’s lives are being directly controlled in this way by the Government, with over £3.2billion of assets seized. The CoP charges substantial ongoing fees that could run into £’000’s a year for every decision made or action taken on your behalf, even just ensuring your direct debits go out every month - last year alone they took over £23 million in fees directly from people’s accounts.

So the price of not making LPA’s is far more than the price of making them. Unfortunately people just don’t know about them – until it’s too late. www.heir-tight-wills.co.uk

Q

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Paul NevillePartner

Pawley & Malyon

Specialism: General Practice

book review

Family Legacy and Leadership - Mark Daniell and Sara Hamilton

The Family Legacy and Leadership book is a real reference that helps families have a better understanding of their legacies. It provides many great ideas and practical approaches to ensure that leaders, members and advisors all benefit from a long-term strategy approach for your family business. The book really gives a unique understanding that will help family businesses find their path to a sustainable business approach. It also demonstrates how leadership of a wealthy family involves addressing many complex and interrelated issues such as family organisation, communication within and across generations, the roles of patriarchs (and matriarchs), preparing children for inheritance (or non-inheritance!) of family wealth, approaches to protect and enhance family wealth.

Screw it let’s do it - Richard Branson

“Screw It, Let’s Do It” is one of Richard’s favourite sayings. In the book of the same name he reveals the lessons that have helped him through his business and personal life, like believing it can be done and that if others disagree with you, try and try again until you achieve your goal; or that you must love what you do. Known by his colleagues as ‘Doctor Yes’ you begin to understand how a man can achieve so much from the simple ideas of enjoying what you do, believing that anything can be a success and learning from every experience. Very different to his own autobiography but a truly inspirational read that will encourage you to make a difference in you everyday life!

Written by Richard Branson

Raising financially fit kids - Joline Godfrey

As a parent, particularly in a family business, you worry about instilling good financial values in your children no matter what your income level. But when and how is it appropriate to start teaching your kids about the value of money? Joline Godfrey, founder and CEO of Independent Means, Inc. the leading provider of financial programs for kids and their parents has the answers. At the heart of the book is a developmental map covering 10 specific money skills children can master by the age of 18 to become financially secure adults. Godfrey’s fitness plan doesn’t encourage children to accumulate wealth for its own sake; rather, it helps children achieve independence and become responsible members of families and communities by teaching habitual savings, smart money management, and decision-making skills. More than just a money book, Raising Financially Fit Kids encourages your child with entrepreneurial spirit and to gain self-confidence using the power of philanthropy.

Written by Joline Godfrey

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Generation Autumn / Winter 2011 93

Written by Mark Haynes Daniel & Sara S. Hamilton

marketplace


Pineapple Business Park, Salway Ash, Bridport, Dorset DT6 5DBTel: 01308 488280 www.pineapplegroup.co.uk

Delivering rural solutionsfirst half hour consultation free of charge (at our offices)

Planning advice (concept to delivery)Tom Worboys - Project Surveyor E: [email protected]

Business - Office ManagementCompany start-up - Financial management, Secretarial and admin supportSharyn Brown - Chartered Accountant E:[email protected]

Health & Safety - ComplianceNEBOSH & IOSH qualifiedMike Rose - H&S / Compliance OfficerE: [email protected]

Enrol on a Presentation Skills workshop

and become a more confident public speaker.

Courses now being held in London & YorkSpecial rates for Family Businesses

T 020 7407 4552 M 07974353407 www.voiceworkslondon.com

Inspire - Persuade - Involve - Reassure

Excite - Convince - Explain – Challenge

The perfect partner foryour warewashing needs

01908 359000www.winterhalter-scout.de

Wines For Home

www.winesforhome.com

Great winesgreat value

delivered direct to your door

Contact Gemma Firth

M: 07957 234 965 T: 020 8498 5200

www.matthews-printers.co.uk

If you’d l ike to advertise here..

contact [email protected]

£99from just

Keeping Memories Precious

We provide a bespoke service and breathe new life into treasured family gems, by creating beautiful and unique rings that will last for generations.

Contact Irene & Jenny on 07590 830 001 to arrange a design consultation at our London studio.

marketplace


We are experts in producing cost effective, short form video for online. Video that is measurable, achieves positive ROI and engages your customer.

We offer a full range of services including: Video tracking, Web analytics, Tactical initiatives

www.greedymedia.com Contact [email protected] Tel. 020 7158 0310

Portraits forSuccess

Mark Weeks creates beautiful images of extraordinary people. Combining beautiful lighting

with a keen eye for detail,Mark makes you look

as good as you feel.

tel: 07890 987 860www.markweeks.com

‘Construction made easy’Martin Construction has been at the forefront of the building trade. ‘Interior & Exterior - A complete refurbishment service in both Residential & Commercial Sectors’

35th

T: 02871 265963/0207 9379773 E: [email protected] www.martin-construct.co.uk

We provide a specialist executive recruitment service to a wide variety of clients throughout the UK from Family Owned businesses, FTSE listed groups to start-ups.

Recruiting Excellence

Executive search and recruitment services Interim and part-time consultants HR and Finance Consultancy Non-Executive Directors

T 01275 371200 E [email protected] www.moonconsulting.co.uk

Moon Consulting Ltd, The Old Fire Station, Lodway Business Centre, Pill, Bristol,BS20 0DH

Contact Vanessa Moon or Shaun Durham

APPLE MAC SUPPORT

for small to medium size family businesses in London.

Support for laptops, desktops, networks, servers and solutions to any other IT problems.

Contact Gary Lall07860 839 849

Tax Free Pension Release if you are seriously ill

Please contact us to discuss this further and ask for Chris Barker.T : 01634 327300E : [email protected]

Christchurch House Beaufort Court Sir Thomas Longley Road Rochester Kent ME2 4FX E: [email protected] W: www.apolloifa.co.uk Apollo Pension & Investment Advisers is authorised and regulated by the Financial Services Authority. The Financial Services Authority does not regulate tax planning.

UP TO 100%


24

Was joining the family business always your plan?I always helped out whilst I was at school and had a romantic notion that it would be good to work for the family business. But leaving college I wanted to be independent and find my own job, to my father’s dismay. He soon persuaded me round!

What values have you learnt from working with the family?Work hard, play hard! One should work in a professional way and always do ones best. I tend to work long hours and spend a lot of time thinking about work but when I go home I want to switch off and do the family thing.

What’s the best bit about working with family?Everyone takes pride in what’s happening and wants to be part of it. We know each other very well, good things / bad things, so we know what’s what. It is good to be able to plan a future together for the benefit of our own and future generations.

24And the worst?

You can’t get away from family; family is family – work, rest and play. Business disputes can become more personal and affect the family network.

How do you spend your free time?I like to visit my grandchildren and

I should spend more time with my husband – we’re like ships passing in the

night. I like to go swimming before work, I have a horse which I ride occasionally, and

I have bought a bike which I try to ride with my brother. I also like going to our local pubs for a drink

and something to eat.

Advice to someone thinking about joining their family business?Know the purpose – for yourself and the business. What are the long term plans? Knowing the exit strategy enables you to work towards achieving it.

Who inspires you?My father. He was a quiet person who had a lot of wisdom. The older generation have had to work so hard for what they’ve got and today everything seems to be so much more accessible or available.

Does money motivate you?It’s a means to an end: the more you have the more you spend!

Describe your typical day in the family business0600 – Husband wakes me up with a cuppa

0700 – Swimming in Ledbury

0800 – Breakfast with my mother

0900 – Arrive at the office for various meetings on and off site. It’s important for me to maintain close links with my staff and to remain approachable.

1700 – I tend to get more work done in the evenings so work on.

1930 – Arrive home to dinner prepared by my husband, watch a film, go to bed ready for the next day.

www.westons-cider.co.uk

A DAY IN THE LIFE OF

HELEN THOMAS

Family Ties

2012‘Family Ties’ annual conference is THE conference for the family business sector and has become a firm favourite in the calendar. This annual event, hosted by Family Business Place, is held at a prestigious London venue and brings

together family-run companies from across the UK.Register your interest in next year’s conference online to ensure you receive the early-bird discount once tickets go on sale – www.familybusinessplace.com/familyties2012

‘12

Contact: E: [email protected] T: 01732 220 120 www.familybusinessplace.com/familyties2012

will be even bigger and better, so book your tickets today!

Family Business Proud – wear it with pride and show your customers that you are an ambassador of the UK’s family business sector.

The FBProud marque has been developed by the Family Business Place to be awarded to those companies who have been proud ambassadors and supporters of the family business community. With over 65% of the UK’s private sector being family run, these businesses make a significant impact on the UK economy and deserve to be recognised.

FBProud can be used on any marketing tool including:

Letterhead, Business cards, Internal communications, Website (with reciprocal link back to www.familybusinessplace.com), Corporate brochure, Packaging, Vans/lorries, Signage

FBProud lifetime license - £495Please contact Family Business Place for more information – [email protected] 07921 710 009

FBProud stands for all of the values that are common throughout family businesses including loyalty, trust, heritage and integrity.

The FBProud marque has been developed by Family Business Place to be awarded to those companies who act as ambassadors and supporters of the family business community.

FBProud lifetime licence £495

For more info contact:Family Business PlaceE: [email protected]: 01732 220 120W: www.familybusinessplace.com

FBProud an be used on any marketing tool including :Letterhead, Business cards, Internal communications, Website, Brochure, Packaging, Vehicles, Signage.

Loyalty Trust Integrity Heritage



http://www.familybusinessplace.com/family-business-proud-_590/

http://www.familybusinessplace.com/family-business-proud-_590/

generation magazine a/w 2011

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