BBC's 'Can't take it with you' programme and succession planning

http://www.ifb.org.uk/ In the latest episode of BBC2’s 'Can't Take It with You' the seasoned business guru Sir Gerry Robinson and Withers partner, Sue Medder, encounter two family businesses and the problems that can arise for the senior generation when considering succession.

When dealing with generational transition in family business, it is important to consider carefully how best it should be passed on to the next generation, taking care to ensure that an acceptable balance is struck between the interests of those family members who work in the business and those who do not, whilst also trying to ensure the continuation of the business as a going concern.

The two cases in the TV programme highlighted the most frequent problem facing family firms, and particularly those with ageing owners: a void in succession planning. Surveys of owners demonstrate time and time again that they put their heads into the sand sidestepping sometimes painful conversations with key stakeholders - particularly with their own children.

Communication is the key to unlocking the way forward, including a mix of one-to-one discussions and bringing all the parties together around one table. The programme also usefully demonstrated how external intervention by a moderator can play a vital role in bringing objectivity to an emotional situation and addressing tough questions that may have been swept under the carpet.

Drawing up a will plays an important part in such a process as it sets out how ownership and management of the family business will be dealt with when the seniors have passed away. Such a document becomes much easier once there has been open dialogue and engagement with the key stakeholders to try to understand everyone’s goals and how individual family members can find ways to work together.



Related articles

• Family businesses 'fail to plan' (telegraph.co.uk)
• Parents passing businesses on to children quicker to ease adviser fees (telegraph.co.uk)

Family business entrepreneurs: the pros and cons of family support

http://www.ifb.org.uk/ The recent sell-out IFB Next Generation International Convention on entrepreneurship was a tremendous success as 185 young delegates from 25 nations listened to inspiring speakers on starting up companies, intrapreneurship in an existing business and emerging social enterprise models. The consensus seemed to be that today’s young family business members want to make their own mark in the early stages of their careers, either by working in a non-family company, or increasingly by setting up their own business. Choosing the entrepreneurship route is becoming more popular; it gives the young person more independence and is a great way to prove yourself, at a stage in life when there is often little to lose.

One of the most active questions discussed was the pros and cons of having “family support” when starting a new business. Advantages include access to capital, ready-made networks, other support that the family (and perhaps its business) can provide and the pressure to succeed. On the downside many felt that using family resources including funding could lead to a lack of independence and thus a loss of freedom for the entrepreneur.

Lara Morgan, founder of toiletries success story Pacific Direct, told the story of how she broke away from her father’s firm at 23 and never looked back eventually selling her business for £20M. She argued strongly in favour of having full control over one’s destiny without anyone looking over your shoulders. Others argued that family entrepreneurs should welcome family support. If a family member starts a new venture family capital and networks can be invaluable; but if the family are investors care needs to be given to the governance system that should give the entrepreneur the freedom to manage, with a good board in support.