UK family businesses as world class exemplars

http://www.ifb.org.uk/ At the PwC Private Business Awards many of the Britain’s 'hidden champions' were on parade and family firms gave a powerful show of strength by clinching the main award. The awards demonstrated that the UK’s private business sector is not short of world-class exemplars. The firms competing are committed to growing and want to raise their brand profile to attract better talent to help win the race.


UK home appliances brand Dyson was lauded as the Private Business of the Year. The company, which is transitioning into the second generation, has become a market leader by focusing on design and innovation. Dyson recognise they play an important role in the rural Wiltshire community where they are based, and their values have helped keep employee turnover relatively low.

The Family Business Award, presented by the IFB was won by Samworth Brothers which has values that revolve around a constant respect for people, quality and profit. Supported by a commitment to training they have created a performance culture that has driven their success.

And recognising the importance of exemplary leadership Paul Drechsler, Chairman and CEO of another family firm, Wates, was awarded CEO of the Year. Paul is passionate not only about the business, but also the family, people and communities that the business supports and depends on.

Other exemplars awarded include Monsoon, the International Business of the Year, where Peter Simon has led his family business back into private ownership, regaining full control over their destiny. Performance has been outstanding since the company regained independence. Their Accessorize brand has been powering international sales which have grown strongly across 68 countries where they trade.

Family businesses rise to the challenge of the UK riots

http://www.ifb.org.uk/ The UK summer has been blighted by riots in London and other cities across the country. David Cameron has lamented the nation’s ‘broken society’. In some quarters citizens appear to no longer respect the importance of good neighbourly relationships. And in the midst of all this family businesses have also been in the spotlight.


The House of Reeves in Croydon was torched by rioters. Just a few hours later, this father and sons firm with 144 years of history was back in business, ordering new furniture from China to keep customers happy. The Reeves family, who are great exemplars of resilience, have been inundated with expressions of support and have set up a special fund to help to regenerate the area that was vandalised.

Carpetright, another retail organisation with over 500 stores in the UK and Europe had their Tottenham store destroyed by rioters in attacks that affected the tenants living above the store. The company Chairman Lord Harris of Peckham, reacted immediately by offering a helping hand to the tenants, even though he is not their landlord. He took the view that they had suffered unfairly because his store had been the target of the vandals attack.

Both these cases are prime examples of how the values of family businesses and their owners can help plug a nation’s social capital deficit. For these family businesses their communities are vital; the community and the business work hand in hand to mutual benefit. So when adversity strikes solidarity kicks in. The Harris and the Reeves stories are powerful examples of family business capitalism at its best and should receive our praise and support.

To donate to the House of Reeves see www.houseofreeves.com/fire-at-house-of-reeves/i60

Murdoch lessons: Business before family

http://www.ifb.org.uk/ Family business has been at the top of the news for the wrong reasons recently with the News International scandal. The events surrounding the despicable phone hacking practices at the News of the World demonstrate that any organisation that does not embed their values throughout the organisation can face the loss of the whole or part of their business as soon as trust breaks down. A look at the News Corporation website lists pages of compliance policies in box ticking fashion, but fundamentally values are about people’s behaviour that rules alone can’t dictate. The responsibility of leaders, such as Rupert Murdoch and his son James, is to set the example through their actions that others will follow.

The questioning in the media about leadership in this family controlled business will go on. Responsible owners put the success of the organisation ahead of their own personal interests, and it is understandable that there are calls for a new CEO at News Corporation and that the board revisit the family’s role in management. This could be a good time for the Murdoch family as owners, to make a bold move and change their roles, leaving strategic management in the hands of their team of professionals, to become cultural ambassadors for the business. The family’s principle role would be to take responsibility for embedding strong values throughout the organisation in order to rebuild the trust of all stakeholders.

The enterprising family office

http://www.ifb.org.uk/ London is becoming home for an increasing number of family offices. A family office generally refers to a private company that manages investments for a single wealthy family. The company's financial capital is the family's wealth, often accumulated over many generations.

At a recent gathering of the IFB Family Office Forum owners were privileged to hear from author and consultant Mark Daniell who wrote Strategy for the Wealthy Family and other acclaimed books. One of Daniell’s themes is why only one of the 30 wealthiest families in the first edition of the Forbes “Rich List”, the Rockefellers, is listed today whereas the other 29 families have dropped away.

At the heart of growing the family’s wealth, and not just preserving it in the family office, is the need to maintain the entrepreneurial zeal and appetite to innovate and grow in each generation. Keeping this flame burning begins by instilling behaviours into the next generation that will encourage them to take entrepreneurial risks and make their own mark. The best family offices foster core values in the family such as dignity, accomplishment and responsibility.

Whether family office investments are made up of operating, or financial assets, the key to longevity is the positive engagement of the next generation. If the family business has been sold there could, of course, be a loss of identity so agreeing common values among owners and a shared mission becomes critical in order to retain unity and a sense of purpose. Recent IFB Next Generation Forum speaker Ben Goldsmith, who now chairs his family office, also highlighted the importance of strong leadership as another vital ingredient.

On September 28th when the IFB hosts its annual Family Office Forum Roundtable families will share their own experiences on how enterprising businesses manage to keep the entrepreneurial flame burning and grow their wealth. The debate goes on….

Family business: The Freedom to Lead

The debate over the demise of Cadbury which was once a great British institution has not died out in the news. Another family business brand Timberland was also sold this week by a family who decided that they were no longer the best stewards of the business.

Family firms who have stood the test of time and fought against the odds, require a unique and sturdy set of genes to survive. They need a clear purpose, strong values and great leadership supported by good governance. If that was not difficult enough they also have to manage the process of generational transitions. Strong leadership establishes clarity of vision and values; this is arguably the starting point for effective stewardship as we set out in the IFB's new report Family Business Stewardship.

Most successful family business owners say time and time again how the freedom to decide is one of the key attributes in achieving success. They can use their independence to make decisions to invest and innovate, where the returns may not be visible in the next quarter.

Of course, shareholder loyalty should never be unquestioning; the best stewards stand back and take a dispassionate view of their organisations. With a board supported by a small group of challenging non-executive directors the right questions can be asked.

The best of family firms are working day in day out to ensure that their owners are well educated for the long journey ahead, with the knowledge and questioning skills that are required to be good stewards of their organisations. To succeed, where others such as the Cadbury and Timberland gave up the fight, is highly demanding. The reward can be great when measured in pride in seeing the name above the door of a successful business where the owners retain their independence and freedom to lead.

Taking the long view

http://www.ifb.org.uk/ Recent press comment in the Financial Times by Sir Richard Lambert laments the myopia of the UK stock market’s obsession with short-term performance. He cites Rolls Royce as a special case that was sheltered from market predators by the UK Government’s golden share. It allowed the firm the freedom to make investments that would take years, if not decades, to yield returns in terms of a strong cash flow. Shielded from mergers and acquisitions style short-term behaviour and a policy of robust investment in R&D, people and capital equipment, Rolls Royce has gone from strength the strength to become a world leader in its field.

Similarly family firms often eschew the public markets to retain the independence that enables them to take bold investment decisions that might not yield strong results in the short-term. Danny Miller and Isabelle Le Breton-Miller argue in Managing for the Long Run that family businesses that pursue a long-term agenda derive competitive advantage. However there is a real danger in this debate that we lose sight of the need to achieve a balanced focus on the short, the medium and the long-term. Near-sighted goals are vital in any organisation. People in modern organisations are appraised regularly and held accountable for goals that stretch over different time horizons. Each business sets its own pace, but like athletes in a long-distance race the runner who wins is able to release effort in a calculated manner with short bursts of speed balanced with stamina.

In successful family businesses there will be short-term aims and objectives sitting alongside a well articulated long-term strategy, where owners strike a balance between short-term return and a willingness to apply their financial capital with patience. It's a subject that we address in further detail in the IFB Family Business Stewardship report, in partnership with Tomorrow's Company, which will be published on 9 June at our 10th National Conference.

Social Enterprise and family business

http://www.ifb.org.uk/ The world is witnessing the emergence of new business models where entrepreneurs with a social conscience are creating an impact while making their venture financially sustainable. The growing emergence of this form of business, known as social enterprise, is an area where the UK sets the pace.

For family business owners awareness of these new models is highly relevant; for example in terms of how social enterprise can form part of the business’s supply chain or indeed how next generation family members could see social enterprise as part of their career development.

The IFB Women’s Forum recently visited the acclaimed School for Social Entrepreneurs (SSE) in east London. This organisation helps develop business projects and provides training and opportunities for people to use their abilities more fully for social benefit. One of the enterprises SSE supports is Bikeworks, based in Tower Hamlets, which provides cycling for all, encouraging the health and wellbeing of everybody in their community. In three years of trading the co-founders have built a business making significant social impact with revenues approaching £1M, and now poised to expand their brand across London.

In another example social entrepreneur and former scientist Sheenagh Day was inspired to establish Maison Bengal a fair trade company, producing high quality home and gift accessories, whose philosophy aims to improve the lives of communities in Bangladesh by developing a sustainable market for their products. The business sells its products through retailers such as Heals and the White Company and has helped thousands of women and their dependents.

These successful companies show how blending strategies from the for-profit world with the social aims of Non-governmental organisations and charities can deliver a sustainable positive impact.

Related articles

• Wates takes social enterprise seriously (telegraph.co.uk)