By Andrew B Morris, CEO of the Academy for Chief Executives
Andrew B Morris
All family businesses need something to ‘glue’ them together. In my case it was the vision and cleverness of my Dad who founded the business and then ensured that all five of his sons entered the business and worked well together.
After a couple of jobs in retail, I joined my own family shop fitting business from the age of 19. I was the 2nd youngest of 5 brothers in a business that had been started by my father, Sam, in 1954 so we were the 2nd generation in the business.
The business expanded into property and real estate and ultimately founded the Business Design Centre on Upper Street in Islington which is still there.
That business experience took me to other, different forms of business. I became involved with a Private Equity business when we bought Earls Court and Olympia in 1999. We were in a minority with the PE company owning the majority. I then moved to working for a Local Authority as CEO of the National Exhibition Centre (NEC) where I had no stake at all as the business was owned and operated by Birmingham City Council. Most people aspire to owning their own business. My path was the reverse of that.
Family businesses are very important to the economy and when they work they are mightily effective, powerful and successful. However, they can be twice as tough (or worse) to make work, especially as they pass through the generations and the family ties become less close. Coming into a family business, sometimes with no external experience, there is pressure to be better than the next person simply because you happen to have the same name as the founder.
This feeling of a need to justify having an opportunity which has been created by birthright is particularly strong in a business when there are non-family colleagues who are there by merit. The disadvantages in that case can outweigh the advantages and the family member finds themselves under immense pressure to prove their worth quickly. It can be a big cross to bear.
In our family business we were five brothers with 10 years between the oldest and youngest. We brought varying skills to the business and tried to operate where those skills could be best used. My Dad did a couple of interesting and clever things to ensure stability. He believed that what separated families was always money and that when families talk money, especially when family members marry, jealousy can creep in. So he systematically passed on shareholding to us year on year and in equal proportions so we all owned the same.
Perhaps more controversially, he decided we should all receive the same remuneration whatever position we held. Although some felt this was unfair due to disproportionate contribution, it actually removed all financial jealousies from the beginning and became the glue that held us together and still does. It is something I’d ask all family businesses to consider. We were all working in the business. If some family members don’t work in the business the situation becomes more complex. They should receive no remuneration and the business needs to devise a policy on holding and dividend.
There is considerable scope, once siblings marry and especially if marriage partners also work in the business, for dissension to arise. Whilst family businesses do fail because of disagreements on vision, it is more often the case that they fail on financial matters. External involvement can be the trigger for that.
We became one of those effective family businesses. The family that works together, stays together provided that there is a plan and that everything is transparent and honestly handled. Secrets can be the catalyst for problems, so the less there are, the less the potential for business threatening disputes.
Finally, we found there was a need for boundaries. We choose to leave business at the office and to never bring it home. This is more difficult if the business and home are in the same place, as more businesses are these days. It is important to be able to have conversations that are not infected by business and to keep a business life separate from a family life.
My own experience gives me an insight into the issues and tensions within family business and the need for somewhere to be able to share problems and get practical advice. The Academy for Chief Executives unique approach to facilitated peer to peer mentoring seems well suited to meet that need.
Andrew is speaking at a Unique Family Business Event on 18th April – for more details and to apply to attend, please contact Elizabeth Stuart-Bennett, tel 07703 581249, email Elizabeth.s-b@chiefexecutive.com
About the Author
Andrew has been a leading figure in the media and events industry for over 20 years. He launched the innovative Business Design Centre in Islington and was CEO of the National Exhibition Centre (NEC) in Birmingham where he transformed the culture from ‘council’ to ‘commercial’ through a transformative leadership development programme. Today, his primary focus is as Chief Executive of the Academy for Chief Executives, which he acquired in January 2011. Find out more about Andrew’s London-based Chief Executive Forum >>