Anyone involved in a family business knows they are different to other businesses. The relationships, dynamics, culture, governance and the challenges faced are more complex.
Through years of research and engagement with global family businesses, the Lancaster University Management School (LUMS) Centre for Family Business has developed a deep understanding of these challenges and how to overcome them. “Family businesses need to improve practices, address barriers and put strategies in place across the board from leadership, culture and communication to letting go and bringing in the next generation in order to excel in their businesses,” says Matt Hutchinson, programme manager at LUMS.
Matt says: “Family business leaders need to create time and space to work through these barriers and discuss them with other members of the family.”
Last November, LUMS piloted a new programme helping family firms to address these challenges. Taking two members from each business, for two days a month, created space and time for
benchmarking and critical reflection. The programme supported business leaders to look objectively at personal challenges, working both with and, crucially, away from their business partners in
confidential peer groups.
The pilot was well received, with businesses making huge strides towards their vision and addressing key barriers to growth. The delegates took away new tools, skills, approaches and leadership confidence.
BEYOND THE DAILY GRIND
Atkinsons, coffee roasters and tea merchants, are part of Lancaster’s history – a fact not lost on owner and ‘Keeper of the Flame’, Ian Steel. “There’s a feeling of responsibility. It’s the oldest retailer in town, but we can’t get stuck in a ‘heritage rut’. So we try to blend in cuttingedge elements and keep things progressing all the time.”
Ian’s sons are also involved in running the business and the eldest, Maitland, signed up with his father for the pilot of the LUMS Family Business Productivity Programme. Having two delegates from each business can offer fascinating variations of perspective across generations as they get to grips with new approaches for improving productivity and sustainability.
“One thing we did on the programme was to track where you think your business is in its lifecycle and that was interesting,” Maitland says.
“Dad saw us as currently setting things in place for it to be in its prime, whereas I had it positioned nearer to its beginning: being younger, I’ve got the rest of my life to see it becoming something more.”
“The programme helps you focus on the hard problems you need to confront to move forward.”
Maitland highlights one such issue: limited scope for staff to get involved in roasting. “We’d been putting it on the ‘too hard’ pile, but the peer sessions helped us think through the problem and set a deadline to take action. So we’ve created a space for cross-skilling, opening up opportunities for cafe managers and baristas to grow their knowledge of coffee generally, which increases the quality and consistency of the product. They get more experience, feel more empowered – and the company gains versatility.”
This touches on a common potential sticking point for family businesses: lack of structured career development, which Maitland says can affect people like him and his brother, as well as other personnel. “On the programme, we talked about how you need to make it easier to learn from the people around you and, as you take on more responsibility, how you need to think about who’s going to do the jobs you used to do.”
“It also really helped with leadership styles,” he says. “Rather than the typical family business pacesetting style, adopting a coaching style that enables staff to buy into your values. And it encouraged us to implement structured meetings with heads of department, to get a clear idea of what needs to be done and to set an action plan. What’s definitely been useful from the whole exercise is taking a step back and thinking about what we want to do going forward and how we’re going to do it.”
“The programme has helped us to solve previously unsolvable problems,” Ian confirms, citing the example of having another business on the premises, which had been nurtured through the early incubation stage and had grown into a major supplier. “Whilst it had been apparent for a while that the paths of the two businesses were diverging, having a new toolkit from the Productivity Programme gave us the clarity and boldness of vision and the courage and expertise to develop a strategy to satisfy both parties. We now operate this business ourselves, with much healthier margins and it complements our existing business portfolio.”
Overall, Ian says, attending the programme with his son has offered both of them a fantastic, life-changing opportunity to plan ahead. “I remember one time we came back from a session, and discussed it with the rest of the family, and a half hour debrief ended up taking the whole afternoon because everyone was so interested. Now we have two upcoming business ventures and I’m sure that our outlook since the programme has helped push the doors open. If planning ahead keeps everyone in a good place through the generational shift, that’s what a family business is all about.”
EXPERT VIEW – by Dr Giovanna Campopiano, Director of the LUMS Centre for Family Business
The Key Challenges
There are so many challenges that arise from mixing business with family. One of the biggest is around succession. Many family businesses struggle with managing the trade-off between control and delegation and this can cause friction between members of different generations, as well as between family and non-family members.
Another key challenge is the balance between long-term, family-focussed goals and the business goals of increased productivity and in-the-moment operations. This often relates back to the succession planning issues too, as different generations have disparate views on strategic direction.
Applying academic research to small business challenges
The LUMS Centre for Family Business focuses on research related to growth, innovation, governance mechanisms and business practices. The findings of this research help us to develop theories,
frameworks and tools, around which we frame programmes like the Family Business programme. The application of these tools supports family business leaders to address their own challenges.
Best piece of advice
Make time to reflect and address issues regularly. Time out of the business is so critical to ensuring that the family work together for the benefit of the business, building a culture of communication and change. Through the creation of a value-based identity, and a strong structure and system which allow flexibility, family businesses can address any challenge they face.