Cummins Mellor: A family planning clinic

Family lies at the heart of doing business for the Mellor family. Husband and wife Richard and Michelle created their recruitment company so they could both spend more time bringing up their young children.

That business, which was to become Cummins Mellor, began life 33 years ago in the back bedroom of the Mellor family home in Clayton-le-Moors.

Michelle says: “We worked very much in partnership. A husband and wife business can be challenging but we always shared the responsibility.

“Over the years we built the business gradually and organically, always keeping in mind that family came first.”

Fast forward to today and the Cummins Mellor family of businesses are based in Blackburn’s One Cathedral Square.

Cummins Mellor has developed into two separate companies. The couple’s daughter Katie is managing director of the recruitment business, while their son Jack has the same role in background screening firm Personnel Checks.

They took over their roles as part of a detailed succession strategy which took account of family dynamics as much as it did business development.

Katie, 34, and Jack, 33, have each bought a 75 per cent shareholding in the business they run, with their parents retaining an interest in both and taking the title of ‘co-founders’.

Both had careers away from the family business, Katie worked for an international recruitment business in London, Jack lived in France and worked for a software business in Paris for a time.

Their return to Lancashire opened up the path for them to take over. Mum Michelle says it was carried out with “clarity and a real plan”.

It included ‘a family charter’ which is central to the way the family operates within the business environment.

Michelle says: “It set out the way we wanted to work. We have a shareholders meeting a couple of times a year and we bring that out and review it and if we are ever stuck on a problem or issue we can go back to the charter.

“It is a blueprint of how we want to operate as a family so links don’t get too blurred between family and business.

“It can be incredibly challenging when you have your children and spouse all working together as a dynamic. You need the infrastructure to handle those challenging situations.”

Richard adds: “I looked at other family businesses in the area, went out and talked to them. They were all second generation businesses and the very first question I asked was, if you could change anything you did first time round what would it be?”

One of the businesses shared the family charter idea. He says: “They gave me a copy and we used it as a base for ours.”

As well as clearly defining the roles of family members it includes guidelines to avoid any misunderstandings or potential breakdowns. Other areas are addressed, such as the option to buy shares if a family member passes away.

Looking back at the way the succession was structured Jack says: “It was an internal management buyout in effect, done in a family way.”

Katie adds that it was also designed in a way to protect the brother and sister relationship.

It allowed their parents to go on and do other things while still playing a role on the boards of the businesses and as valued advisors. Richard continues to keep a close eye on the figures.

They also have outside interests. Michelle chairs the REC – the national governing trade body for recruitment agencies.

Open and honest communication plays a key role in ensuring their family approach to doing business works. Jack says: “Healthy conflict and disagreement is a good thing. We’ve established a golden rule - no holding back. If anyone has an issue, we encourage open communication and commitment to resolving it.”

Katie says structure is also important. She says: “Dad likes talking about the business at any time. He would ring me up and start asking me questions.

“I need to have a clear separation between work and home life. So we had a conversation about it and came up with a solution where we now put a monthly call in the diary.

“He can use that time to ask anything he wants and I love it because that time is allocated and I get lots from it. He can give me advice and it is a really special thing for me.”

Looking back at the handover Michelle recalls how she and Richard signed more than 100 documents to get the deal done.

She says: “It was quite a complex thing to sort out but it needed that to get the clarity and structure, so the next generation can go on and do what they want to do and what the businesses need.

“There’s definitely an emotional element but we got to a point where we knew we’d done everything we possibly could to get the business where it was and it was time to let the next generation of leadership shine and take it to the next stage.”

Jack and Katie have ambitious growth plans for their individual businesses. Investment in software and tech is starting to pay dividends at Personnel Checks. Thousands of businesses already use the company to manage their HR compliance needs.

Cummins Mellor sees strong future growth as a recruitment partner for organisations as outsourcing the function becomes increasingly popular with businesses. It is already making inroads in that area.

The two businesses have a combined turnover of £8.4m and between them employ 44 staff.

Their father Richard speaks with pride about Katie and Jack’s commitment to their companies while mum Michelle highlights their passion for the culture and values that have been laid down from the beginning of their family business journey.

Richard says: “If they hadn’t taken over from us I think we would have sold it. I don’t think we would have trusted anybody else with it.”

The Low Carbon Energy Company, based in Burnley, is another family business that has embarked on a succession journey.

It was founded 15 years ago by managing director Ged Ennis and his wife Maura, who is financial director.

Now the couple’s son Benedict is set to step up from his commercial director’s role to take over the running of the fast-growing smart energy solutions provider which has a turnover of more than £8m.

Ged says: “We put a plan in place around two-and-a-half years ago and appointed a consultant to act almost as a non-exec director to help ‘depersonalise’ the plan.

“It can be difficult emotionally to get your head round the giving up of responsibility and you have to be sure of the direction of travel.

“We spent a lot of time looking at where we were as a business and then worked really hard to put a team in place that can protect our investment.

“As part of our plan, the consultant worked with Benedict separately from myself and Maura to develop his skills and knowledge to be able to take on the role of MD.

“We are fortunate that we have all agreed on the way forward. Some of the milestones we set have changed but that is normal I think.

“As those passing on the business you have to trust those taking on the responsibility and that is built on asking the difficult questions and being honest about where improvement and support is needed.”