Can blood ties ensure success is in a firm’s DNA?

“Who can you trust more than your family?” asks Alex Cain, sales director at high-end London printer and stationer Mount Street Printers and son of founders Peter and Fridette Cain.

“We all work to provide for our families, whether directly or indirectly, so working towards this common goal can create great strengths within a business.” 

Family-owned businesses, or FOBs, make up around two-thirds of the UK’s SME businesses. Indeed, a recent study by Family Business United, an international organisation that works to promote and support FOBs, identified them as the “backbone” of the UK’s commercial enterprises. 

And in print, of course, there are plenty of long-standing and illustrious names, some of which can trace their histories back a hundred years or more. And many of these businesses believe, like Cain, that blood ties can build better businesses.

And these firms are not restricted to a particular corner of the industry but rather feature across all areas of the printing industry: labels, plastic cards, commercial print, brand communications and so on. 

So, what is the secret to success and growth in the 21st century for these firms? Afterall, the commercial landscape has altered significantly since the time when the family-run firm was the norm. Is there something identifiable – a ‘magic formula’ they employ – that makes them hardier than their non-familial counterparts?

Succeed through succession

Perhaps one of the greatest strengths of family firms is clarity and consistency of succession – everybody knows who is going to take over when the old man decides to step down. Something that has been helpful at Geoff Neal Group when Sam Neal took over as managing director from his father.

“Geoff retired in April 2016 after 51 years in the industry and nearly 40 years running the company,” says Sam.

“I picked up the business and learned a lot about the industry from him. Working with your father has some great advantages; in the early years we would discuss the day over supper in a kind of ‘night school’ arrangement. This was a great learning environment and Dad had stopped being my boss and was now being Dad.”

It also means that the outgoing leadership has a stake in seeing the ongoing business continue to succeed. Having access to the body of experience the previous incumbent has built up is a valuable resource. Marsh Labels managing director Gary Burnley says: “In 33 years the company now includes two generations. There are three family members – me, my sister and our dad Barrie Burnley who is now semi-retired. He’s still very much involved and is great for advice.”

Many of the print FOBs feel they are stronger because of the structure they have inherited, and James Buffoni, managing director of plastic print firm Ryedale Group, agrees: “Strength often comes from family ‘blood’ connection. When it works, there can be a deep level of engagement, ownership and loyalty.”

He also suggests that handing a business on from one generation to the next can help a company develop a personality that clients will continue to connect with. “Family connections can also bring personalised characteristics to a business and its stakeholders, as opposed to anonymous shareholders,” he says.

Andrew Bennett, managing director of brand communications company Barley House Group, supports this: “Clients keep coming back because of the level of services the family companies can offer. There’s a sense that family-owned and independent companies offer more than the big groups. 

“Family employees are also committed to achieving good work as it’s their company, which they are looking to pass down,” he adds. “The company ethos can also be passed down to others.”

Family affiliations can also remove a good deal of risk when it comes to customer relations. At Marstan Press, founded by Stanley Lett in 1954 and now managed by his son, Martin Lett Snr, family members account for 68% of the company’s sales portfolio.

“This removes the vulnerability some businesses have if a large proportion of their sales are brought in by someone who could leave,” explains sales director Martin Lett Jnr.

The companies PrintWeek (itself owned by a family-run business) spoke to said that they were performing well in the ongoing rough economic times. Buffoni believes that “having strong family execs is key. We’ve had challenges and the business has changed significantly, and we are now stronger for it. After taking external advice to reassess and develop our capabilities as well as taking on more family members over that period – I feel that the balance of views helps.”

Bennett says the family have helped as well: “Working across the different areas means we have diversified and this is helping us grow. The experience and constant consultation with the other generations has given us the confidence to make the changes.”

There have been studies that show how some FOBs fail because of in-fighting, but Buffoni reckons the odd dissagreement can be a positive thing in some cases. “Squabbling can raise issues relating to professionalism, communication and respect, as well as having a possible negative effect on other non-family members of the business. It’s important to behave professionally with non-family staff and there should be a healthy distinction between work and home,” he says.

This is also something that Marsh Labels has found: “As a family, we do try to keep work separate and we are very lucky in that we all get on,” says Burnley.

“Obviously, there are different opinions on matters, but we all have individual roles that require that individual to make the final decision and the others respect that.”

Meanwhile Marstan’s Lett Jnr says: “Each of us has different strengths, we are all equally committed and we have a natural hierarchy so we don’t have any conflict.”

Past glories

Heritage and legacy are a factor for all businesses, but perhaps more so for FOBs. “Heritage and legacy are important as it means we are striving to achieve and keep on the business going along the same way that the previous generations have done,” explains Burnley. “This also keeps the staff and clients happy.”

Buffoni, however, warns that while referencing one’s past glories is a nice way to raise a business’s profile and carries a certain cachet, FOBs should be careful not to lose their focus: “These things are important to us, but they can also hold a company back if the heritage encourages too much ‘looking in the rear-view mirror’ or if the legacy becomes irrelevant to stakeholders. 

“The family may care about the achievements of the previous generations, but if the customers don’t then it can prove to be a trivial issue.”

Another thing FOBs need to think about is the need for a successful transition process and planning for it, otherwise the firm may not have anyone to take it on. Buffoni believes that it depends on the successor in question and the way in which the succession process is planned and conducted. He says: “My grandfather was taken ill and had to retire at short notice, so my father and uncle got control.

Having been through this process I take the view that I have to earn my position and the respect of colleagues, as well as developing my capability to do the job. It was not easy, and it would have been impossible without the freedom given by my father and uncle,” he adds.

Barley House Group’s Bennett feels that passing the business to the next generation does benefit it. Family and young people get to be trained-up in the company ethos. 

“For example, as kids we used to hang out there so I learned to love the place. When we were old enough, we had our father and grandfather to train us and help us with decisions. You can’t get a better grounding in print.”

The print FOBs clearly have lots going for them in terms of passing on experience and delivering good customer service. However, there is no magic formula, as Marstan’s Lett Jnr points out: “You hear about plenty of businesses where the next generation takeover and goes bust within a year or two. 

“Handing the business down to a son or daughter doesn’t guarantee success as they may not be interested in that sort or business, they may not be business minded.”

Like any business there are a number of factors that management need to stay on top of – things like ensuring succession processes, preventing any disputes affecting the business, and not getting too internally focused. If FOBs do have an advantage it is perhaps in greater committment of family members, a more obvious succession plan and a sense of personality that stands out among their more corporate competitors.