One of biggest hurdles is when to let go, specialist in field says
Handing over family business reins, a challenge for most
When successful entrepreneurial business founders establish a new venture, most struggle to develop proper succession plans.
However, Tony Balshaw, SNG Grant Thornton (SNG-GT) Eastern Cape leader and family business specialist, said though planning for the succession of ownership and management of a company led to long-term future success, it was one of the biggest challenges facing family businesses.
He said job seekers often viewed family businesses as dead-end career opportunities because family members may clog the promotion ladder.
However, many successful family businesses, as demonstrated by international and local giants, have grown and taken their people with them, right up to director and shareholder level.
Balshaw, a chartered accountant, has, since the early 90s, made the intricacies and intrigues of international family-owned businesses his passion.
He is a fellow of the international Family Firm Institute and has studied several courses through the institute.
Balshaw said family firms made for a fascinating field to be involved in.
He has had the privilege to work with many of the world’s largest family businesses on many continents, as well as local family companies, and has delivered several papers and written several books, the best known being Thrive: Making business work, which sold 28,000 copies.
With many families that own businesses, the intrigue of transitioning control over the family and business is incredible, and some family individuals will go to surprising extremes to get their way
“With many families that own businesses, the intrigue of transitioning control over the family and business is incredible, and some family individuals will go to surprising extremes to get their way.
“I have heard of murder threats, suicides, tragedies, company collapses, and family swearing never to talk to one another again.”
One of the greatest hurdles facing family business owners, he said, was when to let go, and deciding on how to secure the ongoing success of the business and who would run it.
“While not a fixed rule, when the head of a family needs to hand over control to the next generation, it should be by no later than the age of 70, and then moving to a role of guiding, stabilising and influencing the family and the business,” he said.
“Succession planning is normally the toughest task facing the leader.
“For it to work, the family and staff must buy in to the process over an extended period.
“A new face should not be parachuted in and expect a smooth transfer of power.
If it is a family member, the person must have proven ability, either from within the company, or as a highly respected outsider
“If it is a family member, the person must have proven ability, either from within the company, or as a highly respected outsider.”
The Stutt Group (SG), with its head office in East London, is one of the Eastern Cape’s many family business success stories.
The company started in Stutterheim nearly 50 years ago as a cartage business, Stutt Cartage, owned by Lorens and Loma Braun.
Today, the Braun family holding has a presence in the entire building sector value chain, from the mining and quarrying of raw materials to manufacturing and delivery of a range of products for the industry, with depots throughout the Border area, employing more than 500 people.
Christo Barnard, of Christo Barnard Attorneys, has been in practice for 20 years in East London and Mthatha.
The appeal of being a firm has resulted in it reverting to a boutique family-focused practice, having severed ties with various partnerships.
Barnard travels between East London and Mthatha, but the family continuity in client service continues through his daughter, Mireille Barnard-Gouws, who manages the East London office.
Balshaw said while there were accepted guidelines, most families would need their own unique solution.
They would need to explore the issues and ensure the strategy fitted in with the culture developed over what might be several decades.
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