The impact of non-family members on family businesses - 02/08/17❰ Back
Bailey Fisher Executive Search hosted dinner and discussion at the Jockey Club, Newmarket, for leaders of family businesses, with discussion around the impact of non-family members on family firms. The guest speaker was Adrian McGlynn, Director of Weatherbys, the family firm at the heart of the horse racing industry for almost 250 years. The dinner was hosted by Andrew Moore, Partner at Bailey Fisher. Key points emerging from discussion were:
Be mindful of cultural issues:
- Family will focus on long term value, whereas professional managers may want short term profit.
- Aligning and communicating family values is fundamental, in order to instruct and inform the management team.
- Professional managers do not like being smothered by family decisions, and family members may not like non-family members driving too much change too quickly.
- Can Non-executive directors play a role in mediation?
Hiring professional managers & retaining family members:
- Hire people better than you.
- Andrew Moore commented that it’s all about “fit”. When Bailey Fisher is hiring into family businesses, we take the time to understand the culture and intricacies.
- Should family members be incentivised not to join the business, so that the business is free to hire the best people available?
- Focus on competition and survival of the fittest, rather than purely on retaining family members. The City was used as an example, with the deregulation of Big Bang, which shook off complacency and the “old boy” network.
- The decision on which members of the family are involved in the business depends on drive and enthusiasm. Natural selection through interest and competence.
- The move to greater internationalisation could be a way to retain more family members in a firm, each running a different area of the business.
- Horizons for non-family members working in a family business can be limited due to conservatism. When hiring externally, a business needs to consider what is the attraction for professional managers working in a family business?
Discussion took place at Bailey Fisher’s Private Markets Dinner, hosted in partnership with KPMG and Farrer & Co.❰ Back