Family businesses play a key role in not only the Irish, but the global economy.
Ranging from supermarkets to multinational corporations, family businesses account for over 80% of companies worldwide. Family businesses make up one-third of S&P 500 companies, 40% of the largest firms in France and Germany, and more than 60% of large corporations in East Asia and Latin America.
However, leading a family business is no easy task. There is not only pressure to provide, but to succeed for the sake of your family. You must also plan for succession, and create a culture that works for everyone. All while striving to achieve that so called work-life balance.
Here are my five lessons when leading a family business:
1. Culture is crucial
Something we know all about here at Glandore, is that looking after your people is important. Family businesses often do this the best, there is no top-down management, instead they are flat, and team members feel part of the family. Company values are even more important to family businesses and it’s important that everyone in the organisation is well-versed in your values.
As one of the world’s most iconic entrepreneurs, and family business founder, Richard Branson often says, “Look after your people and they’ll look after your business.”
Mikael Ohlsson, the CEO of family business, IKEA, when asked about their culture said, “If we share the same values and the same vision we can put more trust in people working in the organisation. We always recruit through values and we spend an enormous effort in strengthening the values”.
2. A lasting success
As a founder of a family business I know that longevity is key. It’s not about making money fast, but rather to make a successful, well-established business last.
Glandore started with 75 desks in 33 Fitzwilliam Square, and over the last 16 years we have slowly, but steadily grown to four locations in Dublin and two in Belfast with over 1,500 members. We’ve also opened one restaurant and one private dining space along the way. None of this happened over night, and there were no quick wins.
Jean-Charles Decaux, founder of the outdoor advertising company, has coined the term “patient innovation. He said this has helped the family business to come up with unique ideas such as free street furniture in exchange for the right to lease advertising space on it and as a result, the company has thrived.
Dublin-based family business, Keelings employs approximately 2000 people. David Keeling, who leads the retail side of the company, says the key to their long term success is that the company is run on the basis of what is good for the business.
3. Courage at your core
All good leaders should be courageous, but for those of us operating within a family business, courage is at our core. For founders we are not only leading the way for future growth but for future generations, and for those second, third, and fourth generations you will feel as though you have big shoes to fill.
JJ O’Toole Ltd is Ireland's oldest packaging supplier, and now in its third generation. Vicki O’Toole took over the business in 2010 following the death of her husband Fergus - grandson of the original founder. Vicki courageously went from home-maker to business decision maker to secure the future of the business. She now leads a dynamic and award-winning business that employs 25 staff.
4. A strategy for succession
According to the Family Business Institute, only 30% of family businesses last into a second generation, and 12% remain viable into a third. Creating a plan for succession shouldn’t be put off until a later date, particularly if you want to keep your business in the family.
DCU's Centre for Family Business carried out a report; Lessons in resilience and success in which the main finding was that family businesses should start planning as early as possible for the next generation. It found that while succession can be a source of anxiety or uncertainty for some family firms, often there was no documented plan to follow.
“Any firm aiming to be multi-generational should be encouraged to afford due consideration to any future family involvement, especially as it is never too premature to plan for next generation involvement,” the report recommended.
5. Tradition can mean progression
There is a common misconception that tradition can hold a business back, when in reality it could be the very boost the business needs.
A great example of this is The Teeling Whiskey Company. The Teeling family went back to their roots with a €10m investment in a visitor centre near where Walter Teeling crafted the drink six generations ago. Another Irish business, Flahavans Oats, has been in family control since 1785. It is also run by the sixth generation and is proving more innovative than ever before.
Despite traditional values, family businesses can be the most progressive in our society. According to Maura McAdam, Professor of Management and Director of Entrepreneurship in DCU’s Centre for Family business, women are now assuming important leadership positions in family businesses. This is a sign, Maura says, that family businesses are an engine for social change.
Working in a family business is exciting, there is nothing like sharing your success with your family. However it can be hard to switch off, talks of business development and product ideas can easily takeover conversation at the dinner table.
Achieving balance between work and family is difficult for many entrepreneurs, but it can be especially difficult for those in family businesses. That’s because the boundaries are blurred: They don’t just take work home with them – they take home to work with them. Achieving that balance is something you must work at, and as a leader set an example for your team. When outside of work, focus on keeping the business out of the family.
This post was written by Glandore’s founder Michael Kelly. Michael founded Glandore in 2001 and with the help of his daughters, who are now directors of the business, they have grown the serviced office, flexible workspace business to four locations in Dublin and two in Belfast.
If you would like to find out how Glandore can help support your business growth, enquire here.