CPA Bulletin

www.cpa.uk.net CPA Bulletin > May 2023 31 GUEST ARTICLE: 2 world of family business. Getting caught up on labels is a waste of energy. What I would say is, far more importantly for you, is if you answer ‘yes’ to any following questions: • Does, or will, your business impact your family in any way (e.g. income, involvement, etc)? • Does, or will, your family influence your short or long-term decisions about the business? • Do you own the majority of your business, and do you have a family? • Do you work with family members (however you may define family)? • If you work with friends, do they feel like family? • Do any family members (however you define family) own shares in your business (even if they are not involved)? I’m guessing most people that are reading this will have answered ‘YES’ to at least one of these questions. You may also have noticed that I made a comment about ‘family’ in the questions. That’s because of my second issue about ‘family businesses’; the outdated understanding and support available. Let me explain more. The professional advisors that I encountered in 2003 - to help me with my desire to carry out a management buyout of our business - were all trained in the extremely limited ‘family business’ approach based on a Venn diagram. This diagram considered 3 things: 1. Family 2. Business and management 3. Ownership It was developed at Harvard Business School by Renato Tagiuri and John Davis in 1978. Don’t get me wrong, it was ‘revolutionary’ at the time! Are families the same as they were in 1978? No. We have blended families, same-sex partners, in-laws, etc. Is business, management and leadership the same as it was 1978? Not even close. Does everyone in a family think and feel the same? Absolutely not! Is the world in which we live and work the same as it was in 1978? No siree! So why on earth are advisors still relying on it 45 years later? Why isn’t there a better system and approach for helping us as family and owner-managed businesses? Well, as Henry Royce (as is Rolls Royce) said: “Take the best that exists and make it better. If it doesn’t exist, create it.” To summarise: 1. You are not your business or your job title - that’s just what you do. 2. You define your business however the hell you want to, it’s yours. 3. Don’t use 45 year old thinking for today’s challenges (leave that thinking behind, along with the 1978 sense of fashion!). 4. If what you need doesn’t exist - don’t settle, and if necessary: create it yourself. 5. Everything is, has, and will continue to change - you still have no choice over this. Where we tend to go wrong I hear a lot of hilarious - and heart-breaking - things when working with family businesses. One of the most common things I hear is: ‘but we’ve always done it this way’. It drives me a little mad if I’m honest, because as I said earlier, everything is changing - from our families, our people, our business, our customers, our financing, our contracts, our suppliers, our age and energy, technology... you get the gist! So why on earth wouldn’t you embrace change? Then we have the fact that hardly anyone deliberately sets out to be a family business - or even join one - which means that we ‘evolve’ and do so without any conscious strategy and approach. Let’s face it, most founders are entrepreneurial by nature and so are ‘winging it’ - they may well have a clear vision in their mind, but they are far too busy making each day happen to let everyone know what that vision might be. It’s vital to be able to step out of that day-to-day stuff every so often and deliberately guide the direction and vision. Equally, it’s no good in just one person’s head - share the vision and strategy. There is also the bizarre hope we hold for family members and all employees to love our business just as much as we do, for everyone to get on beautifully while pulling in the same direction and give as much as we do to making it grow and be amazing. We all have family, and so we all know that family do weird things, think strange stuff and are dysfunctional by nature.