Debate: Successful succession
Family businesses are at the heart of the Lancashire economy. We brought our panel of experts to the offices of Taylor Patterson in Preston to ask them about the vital question of succession planning – and how to meet its challengesPRESENT: Richard Slater ~ Lancashire Business View • Paul Waite ~ Rowan Group • Nick Pickup ~ Forbes • John Daly ~ RSM • Mark Hope ~ Stonehouse Logic • Pauline Turner ~ Chorley Group • Caroline Stanworth ~ Barclays • Chris Bardin ~ Taylor Patterson • Oliver Brown ~ Crow Wood Leisure • Karen Credie ~ KMC HR
What makes family businesses different when it comes to succession planning?Caroline Stanworth: There’s a whole different set of agendas within a family business, normally a driving force that wants to keep everything in-house and keep the wealth that is being built for the next generations.
Oliver Brown: I worked for a large company before I joined my father’s business. I pushed myself and did an executive MBA in London. When I was on the MBA people were always talking about salary and bonuses, I kept saying that from my point of view it is always equity.It’s a different understanding of what you’re trying to achieve from a business.
John Daly: In principle, for an enlightened owner-managed business there shouldn’t be any real difference between it and a corporate. They should really look for the best candidate in that succession. That best candidate has to really want to do it and have the skills.The apprenticeship for a family member to ultimately become the CEO probably comes through the operational route, the non-glamorous part of the business.
A family member has to build and earn their own respect, it doesn’t just come with the name.Pauline Turner: The Chorley Group was founded by my brother and I’ve worked within the business for the last 30 years. I succeeded him as managing director about four or five years ago but I’ve worked operationally within the business to get a good grounding and to know what is going on day-to day.
My nephew is now sales director and will succeed me and, hopefully, his son, who’s ten, will come through in the future. But it doesn’t just have to be about family.We have a strong board and some of them have been there 25 years and feel like family but they’re not blood relatives. It has to be the best person for the job.
Paul Waite: The difference with a family firm starts at the top. Around the board table is where family values really come in. The difference between a family business and a corporate is that those values are always front and centre. Business for a family is continuous and if you join a family business you have got to understand that. Pauline Turner: It is about a passion for the business. As well as the skills you’ve got to have that passion and belief in building the equity and continuing to build the business.
- This is an excerpt from the most recent edition of Lancashire Business View. Click here to buy.