Family business – the next generation

Why the next generation has to add value

By day, Zoe Cosby devotes her time to Kent Brushes, the family business with a heritage going back almost two hundred and fifty years. Then in the evening she hears about the other family business she is connected to by marriage. Her husband is a director of a removals firm set up by his parents almost half a century ago.

“At school I remember being very proud of our family business,” she says. “I’d be asked what my parents’ jobs were and I’d respond that they make brushes. That’s different, they’d reply, what’s the name of the business? When I told them it was Kent Brushes that say ‘oh, we’ve got one at home’.”

Since 1777, the company has been making hair, teeth, nail, clothes and shaving brushes. The Kent family ran the company for six generations until 1932 when the last of the three Kent brothers died and Eric.L.H.Cosby, an engineer and inventor of the ‘Cosby hygienic refillable hairbrush’ brought the business. The Cosby family have been at the helm ever since.

“As a child growing up, the family business was part of the fabric of my life. Our house was full of brushes,” recalls Zoe Cosby, the company’s public relations manager and daughter of the chairman Alan Cosby.

“Dad would go on business trips for weeks on end and then when he came home, he would tell us about them. In that sense, being in a family that runs a business affects everything in your life. You see the ups and downs happening right in front of you, and although my parents might have thought I wasn’t listening to conversations at the dinner table, I absorbed what was being said.

“I’m one of four siblings, and there was never a one hundred per cent expectation that any of us should join the family business. Our parents encouraged us to follow our own passions, and said they didn’t mind what we wanted to do as long as we were always moving forward.

“But there was an underlying suggestion that if we wanted to join the family business, the door would always be open

“My brother joined Kent Brushes in his twenties, while my elder sister works in television and my younger sister went into fashion design. I was awarded a scholarship to a contemporary dance school in London but I had to leave because of an injury.

“My interest in PR and marketing led me to join the family business when I was twenty. My purpose was to fire up the relationship between Kent Brushes and the professional salon retail sector.”

“There comes a point after the next generation joins the family business that they have to decide whether it’s a long-term commitment they are prepared to make,” maintains Cosby.

“I loved the business, but deep down I knew getting first-hand experience from working at other companies would benefit not only myself but the business further along the line. I also really wanted to travel and it felt a little like a ‘now or never’ situation.

“After travelling I joined Oliver Goldsmith sunglasses, an iconic British eyewear brand where fourth generation family member Claire Goldsmith is chief executive. I worked alongside Claire for the best part of ten years.

“My intention was always to return to Kent Brushes, and after having my two daughters it felt like exactly the right time. I’d travelled, matured, and gained a wealth of knowledge and experience working and collaborating with other brands, and I was ready to bring that to the business. I wanted to be a part of Kent Brushes because I would be an asset to the business, not because of who my father is. Some of us have a clear view of what they want to do when they grow up. Navigating how and when you join a family business is incredibly important. Life experience is integral to growth and it’s important to work out what your skill set is and what you can bring to the table.”

“Communication is essential for every company to get right, but there’s an extra dimension with a family business,” she suggests. “It can be less reserved because it’s all interwoven with homelife and work.

“But at work, it is vital to maintain a professional voice. Being respectful to the old ways of doing things, but confident with your opinions and new ideas is key. Your voice is important but you need to learn how to earn your stripes, prove your decisions and intentions for the company will work.

“I’m as intensely proud of the business as I was when I was growing up. We receive letters and emails about our products every day, such as how people still have the Kent hairbrush they were given on their first day at boarding school seventy years ago.

“That’s not great for repeat business, but it shows that Kent Brushes is a brand which is weaved into people’s lives and prompts them to get in touch and tell us their stories.

“I hope the next generation will continue to recognise that our family business represents trust, durability, and a sense of purpose in having heritage coupled with modern technology.”

What she means by that is years after the purchase, customers often cling onto their Kent Brushes product, so the company provides a refurbishment service for their silver vintage brushes. Replacement bristles are hand stitched into the wood by a highly skilled craftsperson in much the same way as it was two and half centuries ago. And it takes place next to automated machinery producing today’s new brushes.

“It would be remiss to say the next generation joining a family business doesn’t come with particular challenges,” says Cosby.

“Just because something was done in a particular way doesn’t mean the next generation shouldn’t be able to introduce change.

“Knowing when to relinquish a position to the next generation can’t be easy and in a family business it shouldn’t be assumed that the role the next generation take is going to be the CEO.

“It comes back to what value they can bring to the business. It could be that the next generation would provide that as the company’s creative director, head of export, or managing press and communications!

“I want my two girls to follow what they want to do, to decide their own destiny. But I talk to them endlessly about our brand’s heritage, what we create, and life at work, much as my parents did with me. They love the stories, like how we made shaving brushes with a hidden compartment for the secret service. “My daughters are still very little but the family business door is open. I will of course encourage them to gain lots of experience before committing to anything, whether that is Kent Brushes or something entirely different.”

So, is there something our politicians could introduce to sustain the family business?

“I would like government to provide the means of multi-generational family businesses to stay independent for the next generation to take over,” says Cosby, “and tax relief could be a means of doing that.”

Download the paper

Knowing how to deliver a legacy

Kate Gibson: “My earliest memory of the family business was taking part in an advertisement for a Peter Rabbit game when I was four years old. “When I was growing up, I watched Dad work really hard, which meant he wasn’t always present as I maybe wanted him to be. “I didn’t really know what I wanted to do as a career. I was probably lacking a bit of confidence but I knew I was hardworking and determined. “After nearly four years as direct marketing officer at a charity, I joined Gibson Games to manage operations and I was flattered to have been asked. I wanted to do the right thing by my Dad and I wanted him to be proud of me. Certainly, I wasn’t thinking at that stage that in time I’d be managing director.

“It’s a gradual process stepping into the shoes of a parent in a family business. I went on to spend nine years here being responsible for marketing before taking up the role of MD. My father had the longest tenure as managing director. He had been such a significant driver of the business I realised it would take time to introduce my own approach to the business, and we had a year of transition when he decided to retire.

“I do remember thinking this is a big responsibility. Can I do this? Have I got what it takes? Can I balance the job with my family? And then initially, I felt something weighing down on my shoulders, a kind of imposter syndrome.

“Dad became chairman but was still very involved day-to-day, and at the time when I just had my daughters we had employed an interim managing director, so in effect two chiefs already in position. I wanted to express myself. I knew I could make some positive changes. Then one day I had an ‘I can’t do this anymore’ moment when I said I don’t want the job to be like this. Dad said let’s talk about how we really want the business to operate going forward.

“There have been moments since when Dad has asked what’s happening here, but also moments when he’s nudged me on something I needed to look at. It would be abnormal if that wasn’t what happens, and he is hugely supportive of what we are doing.

“I wanted the company to address employee engagement, culture, sustainability, and governance, such as having shareholder agreements. And I realised I had to really learn the finances of the business if I was going to make a real input.

“Working for the family firm was very different from the job I had before. In terms of culture, the voluntary sector is quite progressive in terms of its focus on people and what they need to do their job effectively. That culture of developing people, and getting the best out of them is something I have worked hard to bring about. When I first joined Gibsons, there were no appraisals for example, or team meetings.”

“Developing a positive and productive culture was completely in line with our company’s core value of ‘bringing people together’, although the value originally was more in relation to families playing games together and to the business owners having good relationships with suppliers and customers.

“Yes, a family business will have purpose and values but there is a difference between talking the talk and living and breathing it, and there’s something in the ethos of a family business which makes that more likely to happen.

“When we first sat down to consider our values we realised they were instinctive and people who worked here thought that as well.

“I also believe growth and sustainability are necessary to deliver a legacy. I want to build on what my great-grandfather, grandfather and father have achieved but also open the door to new ideas to enable us to move forward in today’s world.”

“Strong values and time-honoured ways of doing things can be valuable, but resistance to change can also hold a business back. People who can’t or don’t want to take the business further but are loyal and long-serving mean family businesses sometimes have the challenge of having to make really tough decisions. The pandemic meant many family business owners had no choice but to put on a thick skin and have those difficult conversations.

“Would I want my children to follow in my footsteps? I have to think carefully about the answer.

“I want them to follow their heart. I have no expectation that they will join the family business, but if they did, I would want them to have done something else first to gain skills and experience, to understand that we would need to have discussions about what it means to be involved in a family business, and to earn their place and respect from existing employees.

“As a mum, I want them to do whatever makes them happy and to believe that with hard work and determination they can be whatever they want to be, but if they wanted to join the business one day that would be fantastic.”

“My sister and cousins also have children. We just don’t know what’s ahead but we certainly won’t shy away from thinking about succession; selling the business would be the least favoured option.”

Michael Gibson: “I worked for Thomas De La Rue, a job which didn’t pay very well and I was working a long way from my home and social life. My father and uncle said

that if I wanted to think about joining the family business then now would be a good time as someone had left their job in the office and there was a vacancy.

“It was my grandfather who started Gibson Games in 1919, then called HP Gibson & Sons, and when I had to take over from my father, I wanted it to survive as a family business. I felt I had been trusted with the family silver.”

“My father died when I was twenty-seven. I can remember talking to him in hospital, telling him there was no need to worry about the business. He said I’m not. He was probably lying to me as I was lying to him.

“Suddenly I was confronted by a situation I had no experience of dealing with, matters like staff asking for a pay rise thinking I was vulnerable. But I always feel that when I talk about a family business, I mean not just the family shareholders but everybody who works in the business.

“Having people who truly understand and embrace the values and well-being of the company is essential to the growth and survival of any family business.”

“I worked every hour God sent because I knew if the business was doing well then it would keep my family financially safe. I’m not very good at delegating, probably because I had to jump in at the deep end and felt the need to keep my finger on the pulse of everything, be it sales, marketing or product development.

“I didn’t get much in the way of compliments from my father and in that sense I recognise I’m a watered down version of him. I realise that because someone is a family member, you tend not to say well done or give them the praise they deserve.

“I have been lucky in having the total support of the shareholders; family businesses often fail because of disagreements over direction rather than market conditions. If you’re not careful, a downside of a family business can be that emotions run high and the company can go to the wall because of family disagreements rather than strictly business reasons.

“With Kate joining the business I was looking ahead. I wasn’t thinking of retiring at the time and I didn’t want to sell the business, even though financially that would have been of enormous material benefit to me. I knew that if Kate was to take it on, she wouldn’t just want to continue to do it my way and that wouldn’t be easy for me. But I’m good at imagining myself in other people’s situations, and that has helped me come to terms with it. My role is to be here for Kate if she needs to talk to me.”

 

Download the paper

Why trust has to be a key characteristic

For a while, this was one family with two separate family businesses. That’s because instead of joining the company set up by her father and uncle, Victoria Brocklesby together with cousin Neil Ginger started a completely new venture with their support.

“My father and uncle went into business together to build indoor swimming pool complexes for forty years before then selling their company,” says Brocklesby. “Me and my brother were very much involved with it when we were young. We’d do some work with Dad when he was in the office and helped out at exhibitions. We had a real sense of being there as family.

“A family business can be all consuming. If we wanted to spend time all together, invariably it would be a work-related event.

“I went to university to study physics with space science. At the time I was keen to become an astronaut. I still am! I had nothing planned out for a career and at the back of my mind I did think about joining a finance house in the city. Thank goodness I didn’t!

“But I liked the idea of starting a business. My father and uncle were very entrepreneurial and I had their work ethic behind me. Then my cousin Neil phoned me and asked what I was doing. I said nothing really, apart from some skiing and wind surfing, although I knew real life had to kick in. Neil had the idea of manufacturing a bi-folding door system which nobody else in the UK was making.

“He and I started Origin by using space at my father and uncle’s premises, and they acted as guarantors for the bank and became shareholders. They were having supply problems sourcing bi[1]folding doors from Germany, and it’s a real issue on a £2 million pool enclosure project if the windows and doors don’t turn up in time to weatherproof it. I remember sometime before, my uncle being so frustrated he said couldn’t we just make the bi-folding doors ourselves?

“My brother worked for a sports distributor in procurement and distribution, and after Origin had been in business for four years he joined us with that experience at a time when we really needed it.”

Today, Origin are the UK’s leading manufacturer of bespoke aluminium bi-folding doors and windows. Brocklesby is the company’s chief operating officer, Neil Ginger their chief executive.

“I don’t ever remember thinking this might not work,” muses Brocklesby, “and one of the reasons is the real sort of lovely feeling of support you get from being in a family business. We are a close family, and all live near to each other.

“At one time, out of our three hundred and fifty staff, about seventy-five per cent were related to someone else within the company.

“The biggest characteristic, the bedrock of a family business is trust, and that also includes letting people get on with what they are doing so that they feel a sense of purpose and responsibility from it. That also means for the owner, there’s no need to be constantly ‘in’ rather than ‘on’ the business when there’s trust in people, but you’ve got to give them the right tools.

“I think that can be a reason why a family business more naturally puts an arm around someone who is struggling – by that I mean nurturing, gathering round to bring that person up. But you can only do that for so long.

“The difference is that our first reaction as a family business would be a desire to support that person.”

Although Origin’s values are writ large and graphically across virtually the length of one of the boardroom walls, it was the company’s staff who came up with the words to describe them, such as selflessness, impact, curiosity.

“We hire based on our values, bringing people in for their attitude because we can teach them the skills,” explains Brocklesby.

She believes a close family business can make decisions quickly as it’s less likely to be beholden to outside shareholders.

“But a family business will be acutely aware that it isn’t just risking its own money but the livelihoods of everyone involved, especially when the company has a real presence in its community,” she points out.

Brocklesby has another cousin who has been with the company for fifteen years, and whose three children hold posts at Origin. In addition, there are ten other family members who are part of the next generation.

“I’m not actively encouraging my children to join the family business because I want them to keep their options open,” she says. “Look, I’m definitely not discouraging them. They will figure things out for themselves as to what they want to do.

“But once a family member joins usually they are here to stay so there have to be honest conversations about what value they will be bringing to the business. And if what happens is they’re not pulling their weight you have to deal with it. The trouble is that can fracture the family dynamic, because in a family business your relationship extends way beyond work.

“When we started, we were lucky to have access to family funds because my father and uncle did very well in their business. From a financial perspective banks are tight with lending in a country which is innovative and has people with a fantastic work ethic, engaged and integrated, which is a recipe for being able to start a business successfully but itself not enough necessarily to scale.

“I would like to see a more relaxed approach to lending to a growing family business which would be accompanied by support to help them scale. We need to enable them to fly, which is important if family businesses are still to be considered the bedrock of our economy.

“And if government had a family business minister in the cabinet, it could prevent unintentional consequences of legislation and the damage it can do to the family business.”

Download the paper

Knowing what is hugely important

Usually what happens in a family business is that either a new generation joins after learning the ropes and gaining experience elsewhere, or they are catapulted into taking charge because of unforeseen circumstances.

For Jenny Mouser, it was kind of the latter. Another way of describing her becoming managing director at her family’s funeral business M Lucking & Sons is that she retired into the post after spending most of her career in local government.

A (very) long story short will provide an explanation. It was in 1887, some two hundred and fifty six years after his ancestor of the same name started this business, that William Lucking purchased the property which remains both its place of work and a home for members of the family today.

Now if we fast-forward to the middle of the last century, Christine Lucking married Bernard Gowing who in 1974 who joined the family business. In 1996, Darren Lucking, Christine’s cousin’s son, joined from a printers company, and six years later, Roy Palmer, his cousin from the other side of the family with a diploma in funeral directing also came on board from another firm of funeral directors. There’s more. In 2018, Calum (Roy’s son), bringing IT skills with him to “help M Lucking & Sons join the twenty-first century.”

Then in 2023, Darren’s nephew Callum (CJ) also joined. It was in 2010 that Jenny Mouser took early retirement from the public sector and took over along with Christine as joint managing director.

“I think if a business is just owned rather than run by a family which aren’t directly involved in its operation, then the focus can be on the money rather than the ethos,” she says.

And provides a specific difference between a family run funeral directors and its competitors. “You must have seen the multiples advertising on television to say they can arrange any type of funeral, showing a gathering of motorcycle enthusiasts as an example, as if that is something unusual; but I can’t think of a funeral director who wouldn’t arrange what the deceased wanted,” she says. “The actual difference is that when the multiples talk about providing a caring, personal service, they do it from their standpoint. We treat every funeral as if it’s the first one we have done,” adds Darren Lucking. “Whoever speaks to the relative of the deceased in first instance is their point of contact all of the way through and will conduct the actual funeral. Relatives aren’t put into a process when what can happen is that the person who actually conducts the funeral only sees the family for the first time when they arrive at the church or crematorium.

“To maximise cost reduction, the multiples and the consolidators in funeral directing will often have central hubs where bodies are stored and then brought back to a location for the funeral. Here they are at rest in our building, in the community we serve.”

What brought the enormity of the company’s longevity home to Lucking was a chance encounter with an oil painting. “I was visiting a castle on a day trip when I glanced at the date of a portrait of one of the ancestors who had lived there. I realised we had already been in business a couple of centuries by then,” he explains.

But Mouser says the company doesn’t equate being founded in 1631 with being antediluvian. “We use tablets to make notes when we meet the family of the deceased, and the software prompts us to ask particular questions so nothing is missed,” she points out by way of example.

Thus far, fourteen generations of the family have followed the founder. And the initial in what is the limited company’s name today – M Lucking & Sons – comes from Mary Lucking who carried on the business in the earlier days of the twentieth century.

“My daughter emigrated to Australia and my dad would have dearly loved my son to join the family business,” says Mouser. “I remember when he took him to one side when he was sixteen to suggest it, but his passion was cars, and had been from the time he was a toddler. He went on to start his own classic car business.”

Lucking’s wife is a qualified embalmer and the PA to a local coroner. “I think she would join us at the drop of a hat if there’s a real position for her here,” he muses.

The future? “Our bank manager has tried to persuade us about expansion and we are constantly approached to sell our business,” says Mouser, “but we are aware of our history and our standing in the community and don’t want to do anything which could change our ethos.

“It is hugely important within the family which owns and is involved in the business that you all get on because then you can be open about everything, discuss anything, and there is a common desire for a positive conclusion because our lives outside the business are linked together. If you are a family member, this is a vocation, not a job.”

With an appreciation of what family means. “What has stayed in my mind was a time when my kids were young and a woman with terminal cancer asked my father if he would arrange her funeral,” explains Mouser.

“It was Christmas morning in the early hours that he received the call to say she had died. He was visibly upset. The woman had two young children and when he arrived at the house their presents from her were there under the tree. Afterwards he came to us for Christmas dinner and to see my children open their presents.”

 

Download the paper

Choosing what happened next

When Chris Blanks took over the business founded by his father, he also demonstrated what seeing the bigger picture really means.

Which is why what is now Elwyns Windows, suppliers and installers of custom-designed conservatories and orangeries as well as doors and windows, might not be so very different after all. But let’s start back in the day.

“I grew up with the business,” explains Blanks. “Dad would come home at lunchtime from the hardware shop he opened in 1963, and as a teenager I worked there as a Saturday job. Did I get paid? Not much, but it was about gaining experience Dad told me! I remember cutting glass before I probably should have at that age.

“I was thinking about going to music college and Dad said he wanted me to find my own path, that the family business was something I could always fall back on. I said I’d spend twelve months with the business while I thought things through. You could say it’s been the longest year ever.

“To start with I was loading vans, fetching and carrying, but Dad encouraged me to study accounting. He would take the accounts home with him to do on a Sunday, so I had no excuse not to.

“I took to it well. And Dad was always a very thoughtful person. He took the time to explain things, never raised his voice, and he dealt with things so nothing lingered.

“I became a fitter for the windows business which had grown out from the original hardware shop, then added surveying, and following that, sales as well.

“At the same time, I was trying to learn about running a business. The step change came when we decided to take on another fitter so I could move away from installing, which gave me a seat in the office and more time to learn.

“Dad grew up in an era of the typewriter and fax machine. I had computer skills. He told me he didn’t want to learn IT and that technology was my natural progression to run the business.

“In those days this wasn’t a limited company so I was made a partner. Barry Chadwick, a fitter who joined from school on the youth training scheme (YTS) seven years before me was offered the chance to buy Dad out.

“Why? Loyalty and Barry’s ‘never leave anything unfinished’ attitude.

“Dad said he would give me 100% of the business if I wanted, but I told him I was happy to have the support of someone working alongside me who also knew Elwyns inside-out. We have separate roles – Barry is surveying and installations; I’m sales, accounts, and strategy.

“Part of my reasoning for going along with Dad’s idea was that when someone from the next generation of the family takes over, it can make people nervous, and I wanted to preserve the relationship with our staff.

“Dad stayed involved with the business and until he died he would come in every Friday afternoon to look at the figures, after which he’d say let’s go for a pint and talk about them.” “If it hasn’t been for technology then he probably would have continued to have been hands-on,” says Blanks, “but computers made him realise he’d done his bit. But I still think of Dad as the figurehead of the business, and I remember him telling me don’t ever let overheads run away with themselves.

“That concern I think is one of the reasons why he had been happy for the business to stay at the size it was. When I became managing director I could have either sat back and continued to run it as it was, or put my mark on it.

“Dad was actually encouraging about my plans to grow the business, even though he couldn’t understand my concept of a window company opening showrooms, which was new at the time, rather than selling to the customer in their own home.

“My thinking was that coming to the showroom rather than having a salesperson in their own home meant they wouldn’t feel under pressure and it enabled us to physically show them different products. And one of the ways to make it easier for the customer is to provide them with at least two options to consider so they feel even more in control of the decision.

“I’d like to think that is a reflection of our ethos, which has always been to be honest with the customer, being prepared to say something they’ve picked out isn’t the best product for them. I want the customer to feel we are working with them, helping them, rather than trying to sell to them.

“I think being aware of the importance of relationships with family members in a family business means we are aware of the need to be conscious of the significance of the relationships with customers and maintaining them.

“Family businesses also seem to attract families of employees. Of our installers, we have had three father and son teams, and one made up of husband, wife, and their two sons.”

Blanks is aware how difficult it can be for a son or daughter when they get involved in the family business. “I’m sure Dad recognised all the effort I was putting in, but he was determined not to demonstrate it in case it was seen as showing me favouritism,” he muses.

“Barry’s son Jack came into the business as an installer, and my son Oscar joined an accountancy firm as an apprentice. I encouraged him to take that route because if you can understand the numbers, that’s fundamental to running a business. Also, I do regret before joining the family firm not having experienced working elsewhere. I used to wonder how other companies got to where they are, and I’ve learnt a lot from other people joining us.

“When Covid struck he was furloughed and then made redundant by the accountants, but he said he had always felt that he was going to be part of the family business at some time. He’s managing one of our showrooms and I’ve got to find a way to pull him into the office, as Dad did with me. “I’m immensely proud of having my son in the business.”

So how hard will Blanks find it to handover to the next generation?

“To be honest, the business is very different from the one I took over from Dad,” he says. “Then there were four staff. Now we have more than twenty-five. If I’m not in the office for whatever reason, the business doesn’t fall over. I’ve always lived within twenty minutes or so walk from the business, but now home is a cottage one hundred miles away on the Isle of Wight.

“We’ve been approached as number of times to see if we want to sell the business, and out of interest about the process I had conversations with a broker who told me that a family business is the hardest to sell because often the owners don’t really want to let go.”

That’s not to say that Blanks hasn’t been thinking about succession. “I’ve also looked at exploring the option where ownership of the company is released to the employees with the next generation at the head of it,” he explains.

“But what gives me hope for the future of the family business is also a concern. The family business is under pressure because the concept of caring, looking after the customer as an individual is being lost with buying online.

“We are getting more people emailing us measurements with pictures of what they would like us to quote on.

“So will we still need showrooms in the future? I’m behind the virtual showroom idea although I worry that it could distance us from the customer and our ethos.”

In the meantime, there’s something government could do to demonstrate the importance of the family business, suggests Blanks.

“We have a rebate scheme with suppliers if we increase our spend with them over an agreed figure. If the corporation tax paid by a family business reaches a certain level, then over and above that they could get a tax credit or rebate, with the proviso that it has to be reinvested in the business.

“When we get a rebate from a supplier, we plough it straight back into developing the business and rewarding our staff.”

 

Download the paper

Why legacy isn’t achieved by standing still

Even when she was leaving school and working out what to do next, there was never any suggestion that Vicky Trumper might join the family business.

The expectation was that her male relatives would follow in the footsteps of her grandfather and father and go on to assume leadership of Neville Trust, which dates back to 1875 and is made up of property, joinery, construction, and funeral businesses.

Not that she hadn’t grown up with the business as an intrinsic part of her life.

“As a child, on my way home from school, I’d stop in to see my grandpa,” she explains. “I was eleven when it was the company’s centenary, and I remember helping dad put the new logo on the vans and lorries.

“But they were from generations which didn’t encourage women in the family to join the business. In no uncertain times I was pointed to secretarial work or becoming a nurse or a teacher. There was the expectation that my brother and a male cousin would come in and eventually take over, but it turned out they didn’t stay for long because running a business wasn’t what they wanted to do, but they were faced with huge expectation.

“I realised as a midwife in a specialist maternity hospital that to be promoted I would have to wait for a sea of people to leave, and at the time, Ian and I were about to get married and we had to look at our options. He had just qualified as an accountant so we were at a crossroads.”

Which is when an option presented itself, one which could only be described as left field. “I remember as if it was yesterday,” smiles Trumper.

“I was sitting in my parents’ sitting room with my leg dangling over the side of the sofa and I said ‘well, I could always come and work for the business’. Dad turned to me and said ‘yes’.

“I was in my mid-twenties, my brother and cousin had been and gone from the business, my grandfather had died, so my dad, uncle, and aunt were now the shareholders.

“I joined as the then company secretary’s assistant, a fabulous place to start because I learned about property, compliance, and governance.

“This was when I began my business studies degree, partly I suppose to justify my existence. It was something I felt I had to do to show I could contribute to the business rather than just being there because I was the boss’s daughter.

“I still recall the small works manager at the time saying ‘well, if she does eventually take over, at least I’d have retired by then’.

“Twelve years after I joined, now with a four-month old baby and another on the way, I was wondering how to manage everything. At the time, dad, as chairman, was actively involved in the construction side of the business. He suggested that my husband Ian, who at that stage was with a venture capital firm which involved travelling globally, could join us. I remembered that once when Ian and I were talking about the future, I’d said absolutely we wouldn’t work together in business. A week after he joined, he asked so many ‘why are you doing that this way’ questions I was ready to kill him!

“But I realised that if you have respect for each other, of course you can become partners in life and in business.

“I think the two of us being there gave us more teeth to do things. As my dad and uncle grew older, more tasks were handed over to us, or did we take over responsibility for them bit by bit. My uncle did properly retire, but when two of our board members left, dad took on the role of construction director and three of our senior staff in the business were appointed as new directors.”

A recognised hallmark of a family business has been taking the longer term view, but Trumper has a pragmatic take on that. “If we had been in a position to do so earlier, Ian and I would have made what could have been considered at the time to have been harsher decisions,” she says.

“Long-term isn’t achieved by simply maintaining the status quo and areas of activity which just aren’t going to be profitable. Legacy isn’t achieved by standing still.

“In the same way as succession shouldn’t be based on primogeniture in this day and age, a family business doesn’t have to carry on doing the same as it has always done. It has to evolve.

“So for example, at one time non-family directors did hold shares. In the future, if parts of the business become employee owned, I’m comfortable with that.”

Trumper’s daughter and son (marketing and event management, and training to be a quantity surveyor on a degree apprenticeship respectively) are both in the business. “Whether they stay or explore opportunities elsewhere, it’s their choice,” explains Trumper, “but they are here because they are doing a good job, not because of their surname.

“We talk about work and the business a lot at home, and probably because both children have listened and learned about it as they were growing up, so they understand the bigger picture.”

There are ten other sixth generation family members, although most aren’t old enough to join the business for some while.

And she believes that a family-centric approach is adopted in how the Neville Trust businesses operate. “There is a particularly distinctive characteristic of a family business,” she suggests. “Relationships are important, so if there’s a problem it’s about finding ways of solving it rather than pointing to what the contract says. I believe a family business will be more likely to follow the old-fashioned principle of ‘my word is my bond’.

“But that can only be achieved if everyone is savvy enough to realise the importance of doing things professionally, so there’s no prevarication and nobody tries to cover anything up.

“I remember receiving an email from a client because something hadn’t gone to plan. Rather than try to wriggle out of it or throw the member of staff concerned under the bus, we just replied to say this is how we are going to put it right for you.

“If that is to be part of our DNA, we need to ‘Neville’ those who join us. In our funeral business for example we wear the same uniforms, and we all follow the same procedures, such as how to stand by the hearse and that when we are customer facing, we are always wearing a jacket.”

And Neville Trust isn’t a company which wears its values on a corporate sleeve. They are more of a call to action. For a start, they are titled ‘social values’ and instead of well-meaning but often generic platitudes have headings such as ‘Fighting climate change’ and ‘Reducing economic inequality’, each with an explanation of what the company is doing, needs to do, for its part.

According to Trumper, there’s something government could do for its part to recognise that there’s an important difference between a multi-generation family business and other companies.

“I don’t think politicians understand that handing the family business onto the next generation is a transfer, not a transaction which is taking place for profit,” she maintains.

“The original purpose of inheritance tax was to break up large landed estates, not to take a chunk of money out of established family businesses and potentially put their viability at risk.

“This is money a family business would have been able to invest in its future. I might be ‘judgy’ here, but I don’t think politicians focus on longevity, the need to nurture long-established resilient family businesses. In fact, their image of a long established family business can be that it is old-fashioned.”

Perhaps not just in the eyes of our legislators. “One of the characteristics of a family business has been long-serving staff, but today people don’t necessarily see themselves staying with the same company or the same sector for that matter for the whole of their working life,” muses Trumper.

“That could be the same thinking of future generations of family members who otherwise would have succeeded their parents. So will there be the same number of family businesses in say twenty years time? I’m not sure.”

 

Download the paper

One word defines the difference

“I’ve always said that knowing your weaknesses is a strength if it results in having people around you who can do particular tasks better than you. In a family business, being a family member doesn’t mean you’re always right or that you’re the only one to have new ideas. You need to know that what is important is what’s right, not who is right.”

Jim Matthews, managing director of HG Matthews, the specialist brickmaker established over one hundred years ago, was immersed in the family business from childhood.

“I was brought up on a farm that my grandfather bought in 1943 next door to the brickworks he had started twenty years before, motivated by its clay reserves,” he explains. “As only an acre at any one time would be extracted, the rest of the farm continued as before, food production being a priority in the war years.

“My dad went on to manage the farm and his brother the brickworks, before dad bought him out. Initially, as a child, I was tolerated around the brickworks, but as a teenager, I was soon doing proper work because dad taught me the ropes. Obviously he supervised what I was doing; he didn’t want anything untoward to happen to me. But children today don’t have the same opportunities to listen and learn. The country has been steered down a risk-adverse culture.

I’m not proposing a return to child labour, but we are becoming a bit squeamish about work experience. I would climb up a ladder as a kid but dad would have been holding it in place so it didn’t slip.

“I felt grown up doing it, and listening and learning, following instruction, was part of it.”

There was a sense of inevitability that Matthews would join the family business. He recalls: “The only time I ever thought a little bit negatively about it was one day just before graduating with my business degree. When everyone else appeared to have the choice to follow whatever career they wanted, I had known what I’d be doing before I walked into my very first lecture.

“But dad had made it clear that while I would be welcomed into the business, if I didn’t want to carry on, I didn’t have to. So I never felt resentful; there was no hint of emotional blackmail, so nothing to rebel against.

“My oldest brother, who had been running the brickworks for a number of years, set up a fireplace business within the family firm, and me and my middle brother focused on the brickworks, with my cousin running the farm. What happens when you join the family business is a little bit like ‘wearing in’; you have strengths and weaknesses and really you know already what they are so indisputably you know where in the business you and your siblings will do best. Then when a new generation takes up the reins in a family business, seniority based on age becomes less relevant, provided nobody tries to pull rank on age or force of personality. Problems arise in any business if there is a power struggle.

“When you arrive as a family member, there can be a sense that you are muscling in when you start suggesting different ways of doing things. But no matter how good you think your new ideas are, because of the nature of a family business you can’t throw out too much of the bath water.

“In fact, the brickworks are still fundamentally a business my grandfather would recognise if he was here today.

“Our innovation is that predominantly we have gone back to older methods of production, handmade wood fired bricks in bespoke sizes and colours because that has become a niche market. In dad’s time, the brickworks was a local industry serving a local market. Now the general construction market has been consumed by national producers and imported bricks.”

“So just because a family business has been going for generations doesn’t make it immune from market forces,” Matthews asserts.

“A family business of our size has to specialise or be prepared to say goodbye. You have to find the battle you can win, otherwise you are on a hiding to nothing. Evolution is not just about survivor of the fittest but having the ability to adapt.

“How could we compete against mass market producers and cheap imports? It’s ironic I suppose that we realised our future was to return to traditional methods.”

Not that HG Matthews is only inspired by the past. The company was the first brickmakers in the country to switch from diesel to biomass. “Since 2009 our consumption of fossil fuel for production purposes has dropped from 30,000 litres a month to zero,” explains Matthews. “And electricity? We’re fully solar.

“Every brick takes a pint of water to produce so we introduced a rainwater retrieval system. I wanted us to be at the forefront of sustainability; a family business ethos means wanting to do the right thing.”

In a word, Matthews can encapsulate what underpins that ethos: “You want to know what I think is the most important part of the DNA of a family business? Trust. Because being family means you don’t have to play politics; there are none of the toxic components normally experienced in trying to climb the career ladder.

“Trust gives incredible strength to the structure of a business. That’s why if there is a breakdown of trust in a family business, it can fail spectacularly.

“Once trust is dissipated, different agendas emerge. It hasn’t happened with us but there can be resentment about the amount of money family shareholders who aren’t working in the business are taking out of it. A family business has to first look at where it needs to reinvest rather than being seen as a financial sponge which can be wrung out each year.

“I’d make the point that day-to-day issues in a family business have to be handled carefully because while I can speak more frankly and straight to the point with family members, that approach has to be moderated with everyone else! With family, if there is a disagreement then half an hour later, you’re back to being best of friends. But of course, the reality is that the effective basis for addressing problems is being honest and open regardless – it’s just a matter of tone.”

Five family members from the next generation could join the business. The eldest, age nineteen, already has.

“My approach is similar to how it was with my dad,” says Matthews. “Give them the option of joining but if there is something else they want to do, I’m not going to be disappointed. Genuinely, I do not want them to feel obliged to spend their life doing something which makes them miserable or doesn’t interest them. My dad died when he was sixty, my grandfather when he was sixty-one. I think the modus operandi of the business at the time probably contributed to that. But I saw I was cast for this role; for me it was a duty but not a burden.

“The difference is that while probably I face the same challenges they did, I’ve got my mum, two brothers and a cousin in the business, and I can also delegate other people around me. I’m not good with administration, but one of my brothers has no problem being responsible for that task.

“I’m not engaged in admin, which isn’t one of my strengths, and that reduces stress. I don’t have the business equivalent of there being a stone in my shoe.”

The future of the family business, says Matthews, could be vouchsafed by a stroke of the chancellor’s pen (or whatever the digital equivalent of that might be). “To me, the family business is under appreciated,” he says. “For example, imposing inheritance tax when a family business is simply passed on to the next generation is basically inflicting a wound on the goose which has been laying the golden egg.

“It makes a family business in that position vulnerable, its future uncertain, and removes money which would otherwise be invested to generate future growth.

“I believe if a business is purely profit driven then it can only have short-term vision because there is minimal investment and zero passion. Another reason I don’t like a mercenary short-term approach is that it’s ultimately inefficient.

“The very concept of a family business is that its DNA means it is going to be looking more long-term because handing it onto the next generation is often a primary objective. You can argue that the more family businesses we have, the more long-term thinking will result in a more sustainable economy.”

 

Download the paper

The motivation to keep moving forward

“Tradition is the illusion of permanence,” quipped Woody Allen, and he isn’t the only one to think that laurels are the foundation to build from rather than something to rest on.

“Dad saw himself as a steward of the business,” says Maxim McDonald, managing director of the George McDonald Group, manufacturers and suppliers of ingredients to the food, drink, flavour, and fragrance industries. “As the fourth generation though I suppose my motivation is different in that I’m more interested in growing the business as much as possible.

“But my father also took the business forward, relocating to a purpose-built facility and pivoting it from being solely a trading business by adding manufacturing and blending.

“And at the back of my mind the stewardship role is important to me because I’ve got two children under five.”

“I had a natural attraction to the family business,” explains McDonald. “I remember Dad showing me around the laboratory and seeing the products which were being worked on. But after gaining my degree in business and economics at King’s College I wanted first to gain experience elsewhere and I joined Virgin Media in marketing.

“I’m so pleased I did because it gave me that confidence going into the family business, knowing that I wasn’t doing so because I was the boss’s son. I had something to contribute. The business needed marketing assistance – the website not being readable for the search engines was one of the issues – and I was able to bring both experience and a fresh pair of eyes.

“I strongly recommend anyone thinking of joining their family’s business to go elsewhere first; otherwise you can get caught up in existing ways of doing things without much of an idea what is happening elsewhere.

“I had felt a positive gravitational pull. Dad didn’t put any pressure on me to join though. I never felt I had to, and I didn’t assume there would automatically be a role for me.

“Dad and I always got on well and after I joined he gradually introduced me to the rest of the business, starting with new business development marketing, then purchasing, followed by some time in production and the warehouse. After I had been exposed to all of the different parts of the business he said he wanted me to join the board. When he reached sixty-five, he suggested I became managing director.”

“When we were making decisions, if dad and I both just agreed, I sensed we might be missing something, so I would make sure we always listened to people here. It also enabled me to show we are open to fresh thinking and change.

“You have to be a good listener otherwise people can be hesitant in coming forward, worried about saying what they really mean because you’re the managing director. Unless you address that you can be the last person to know that something isn’t working.

“We have an online suggestion box if someone doesn’t want to bring an issue up in person and they can do it anonymously. At our weekly board meetings the contents of the suggestion box are always on the agenda.”

One suggestion of his own, for government rather than his company, is a financial incentive to see more family businesses exporting.

“They know what works in their home market, but they can be quite conservative about venturing overseas,” he muses. “The re-introduction of grants for SMEs, say fifty per cent of costs up to £10,000 would be enough to broaden horizons, to develop a ‘so let’s do that trade show in Italy’ mentality.

Not that Gerald McDonald Group needed much persuasion. “I remember when we took the decision to open an office in Japan; it was made over a lunch,” says McDonald.

“It might never have happened if we had to prepare countless reports and then report to a remote main board for a decision because we would have probably talked ourselves out of it.

“We knew it would be long-term, even with a Japanese national as director of the new subsidiary, someone we had known for twenty years.

“In fact it took four years before we got any real traction in Japan. But a family business thinks long-term and invests patient capital. Others would have bailed.

“I think that’s why a family business will have the flexibility to give a smaller company or a start-up encouragement by supplying what would be beneath a competitor’s minimum order.

“It’s because a family business sees value in the opportunity to build relationships with what potentially could become valuable customers. Perhaps it’s also from an inherent desire to encourage the next generation.”

“My worry though,” he says, “is that with consolidation in so many sectors, family businesses will cash out defensively because of changes to Business Property Relief.

Another consideration is that the new generation doesn’t necessarily want to commit to something so long-term as taking charge of the family business.

“But I believe there will always be a place for family businesses. They can have a competitive advantage because they engender a sense of trust.

“Will the next generation follow in my footsteps? They will have the opportunity to gain an understanding of the business. Then they can make up their own minds.”

 

Download the paper

Engineering the way forward

While seeing the Lego model of the new factory which his father had commissioned wasn’t the catalyst for Steve Matheron joining the family business, it was his earliest memory of it.

“My dad hadn’t set the business up originally,” he explains. “What is now The Engineering Quest, a precision component and sub-assembly manufacturer, started out as a brick mining company, taking reject bricks and applying a process to extract elements such as aluminium, iron, and magnesium from the clay.

“When the owners decided to set up an engineering company, dad joined as works manager, eventually acquiring shares and then the business.

“From the age of twelve, me and one of my other brothers had a Saturday job here shifting stuff around, but two years later I was already operating capstan lathes.”

He left school to start an apprenticeship at the family firm, which gave Matheron the opportunity to move from one factory to another within the group his father had set up. “Because I became multi-skilled I’d fill in to cover for holidays,” he recalls. “I was in my mid twenties when I said to my dad that I wanted more of a challenge. I needed him to give me something else to do. Our toolmaking business was struggling so he suggested I went there to sort it out ‘if I thought I was up to it’.

“It was a massive learning curve and dad had made it clear that he only wanted to hear from me if there was a crisis.

“My initial way of getting something done was by being straight to the point – an ‘either you’re with us or you’re not going to be able to be part of what needs to be done to make this work’ philosophy. I had two choices. I could try to convert people who are already in place, or replace them. I tried both.

“After that I took over as managing director of three of the companies within the group; my wife joined me to look after the admin and dad became group managing director.”

Some tensions remained. “A problem with the family business structure can be that there’s an autocratic or patriarchal regime in place, and that usually translates in other words to dad knows best,” muses Matheron.

“He enjoyed empire building, while I saw the acquisitions we’d been making as crosses to bear. All the companies taken on by dad had final pension schemes. And I remember an argument we had about the value of ISO certification. I was working with a guy from Cranfield who specialised in concurrent engineering which was way beyond my dad’s wheel house, but I saw the need to align the business with corporate standards.

“I also came to realise that when dad said he was thinking of retirement he meant he still wanted to be group managing director but without having to run the business.”

Eventually, those final pension schemes, with a deficit of some £2million contributed to the need for some difficult negotiations with the bank. When they decided not to support the business, we put it through a pre-pack,” Matheron explains. “Dad had been the hundred percent shareholder. He still had his house on the line as security, and we needed cash to get this over the line. I had equity in my house and so did dad, but my brother, who was the quality director, didn’t.

“The plan was for me to run the business and dad just wanted to have a steady income as a pension. I said I needed to have control, sixty per cent of the shares, with dad and my brother having twenty per cent each – or I wouldn’t do it.

“I’m an autodidactic polymath by nature, an individual who is proficient in a number of often unrelated areas, primarily from independent learning rather than formal education. I felt I needed to be in control of the business if it was going to succeed.”

And Matheron can pinpoint an incident which made him resolute. “My brother had asked if we would give one of our relatives a job, but I said no because the person in question had shown no interest in wanting to take an apprenticeship,” he recalls.

“I explained that a family business can’t indulge in nepotism. A couple of weeks later, after I’ve been away on business, I arrived at work to find he had been taken on. My brother had overruled me in my absence.

“A family business can’t afford to shy away from the hardest decision of all. I had to part company with my brother because his concept of business was also that it takes place between nine and five. For me it’s twenty-four/seven.”

Having the majority shareholding meant Matheron was able to pivot the business. “We needed to move quickly from general component manufacturing to providing what could be described as niche engineering solutions,” he explains.

“I got in touch with primes and other engineering businesses and said talk to me about a requirement that nobody has been able to make for you. That gave us the opportunity to demonstrate we have the knowledge, the capability, and the appetite to put our money where our mouth is. Only once were we be unable to help. “My dad went on to give half of his own shares to my stepmother, who gifted them to me. She said I should have them for the sake of the business. My siblings each have shares, but they have nothing to do with the business and we don’t pay a dividend.

“Two of my daughters have joined the business and I see myself carrying on doing what I’m doing for the next decade or so. By then, either they run it, they bring someone else in to do that, or the business is sold.

“With my wife and two children in the business it means we have conversations about work around the dinner table; it’s become like a kind of boardroom. I didn’t have that kind of relationship with my dad.”

What concerns Matheron is whether it will be financially possible for the next generation to take over a family business. “With inheritance tax it’s going to be a considerable amount of money which has to be paid over to the government if it is to stay in family ownership,” he points out.

“The family business would be taxed, not on any gain, but simply because the next generation takes the reins. The fact is that the government could be forcing a sale.”

The Engineering Quest, precision component and sub-assembly manufacturers, with over one hundred staff, ninety per cent engaged in engineering and production, ‘from a miniature instrument for eye surgery to the casing for a satellite’.

 

Download the paper