Why we need research to address the problems associated with governance and succession planning in family businesses.
One of the most significant issues facing family businesses across Scotland is the transition from one generation to the next, or, alternatively, the planned sale of the business to new owners. The planning for this process lies years before the actual transition happens and poses important challenges for a family focused on running a business, managing family matters and educating/planning for the future.
- What our research has done
- Making a difference
- Academics involved
Value of family businesses
Family businesses are a key part of Scotland’s economy: research carried out by Queen Margaret University with Family Business United indicate that the top 100 family businesses in Scotland create £22.4 billion in turnover, £1.4 billion profits before tax and employ over 111,000 people (FBU, 2020 figures). Examples of family businesses in Scotland are Baxters (food group), Arnold Clark Automobiles Ltd; Eastern Western, Farmfoods, S Luca Dairy Ice Cream, MacSween of Edinburgh, DC Thomson, City Refrigeration Holdings, Walkers Shortbread and William Grant and Sons.
Education to develop good governance practices and to support families to embed good practice in their business is key to developing a stronger, more successful future for the businesses that form the bedrock of Scotland’s economy.
The University worked with Family Business United to develop a research-lead framework called the ‘Family Business Education Pathway’ which has shaped the development of a community of family business professionals committed to developing knowledge-sharing events.
QMU’s ongoing family business focused research has shaped the development of this community and the design of knowledge-sharing events. The knowledge gained from our research has influenced the design of major programmes for families in business, acknowledging that families often learn best from their peers and helping to prioritise building ‘connectedness’.
(1) The development of a family business community dedicated to learning and knowledge sharing across Scotland was implemented via the development of Family Business United Scotland. (Professor Claire Seaman from Queen Margaret University was and is a member of the founding Board) who have developed a family business education pathway that includes Scottish Family Business Week (now in its fourth year). Scottish Family Business week includes an annual conference (around 500 businesses reached to date), business visits and a formal reception. Research by Professor Seaman is available through the FBUS website and social media channels.
Reaction from the businesses is illustrated by the quotes:
"I think the resources available have made quite a big difference. My father had the business and I took over from him. He saw a tax specialist, but the advice didn’t really seem to fit with our programmes. We went to a couple of events and realised that there was some theory and academic research in the area – I did business management as a degree, but family business wasn’t really mentioned – but learning that there was a network and we could tap into the knowledge helped to move the business and the family dynamic along. For my father, this was a real lightbulb moment and it helped us to avoid, for example, selling the business. The knowledge led to discussions within the family and with other ‘next generation’ friends who formed an informal network that was really important and it became normal to talk about such things."
(2) Family businesses and their advisors have benefitted from the guidance and research made available through FBUS around how to deal effectively with the succession process and where to seek further guidance. Family businesses now have access to resources not previously available, including access to regular networking events, specialist education at masters and doctoral level and the inclusion of the advisory community within knowledge sharing networks. Moreover, the work with the Scottish Government Think Tank, Scotland’s Futures Forum and GGiS into the experiences of family business recognises the potential difficulties where a family and a business intertwine. In these ways, the research and working group recommendations have had an impact on family businesses in Scotland in mitigating potential difficulties and enhancing their future prospects.
"Both Claire and I were aware of gaps within the family business sector for practical education and a safe space in which family businesses could explore the issues specific to the business sector. They also believed there was a shortage of professional advisors that understood the unique dynamics associated with the family business sector. The advisors that were available pushed their own commercial agenda with little sensitivity to the human, emotional capital that is closely associated with the family business dynamic."
The unique approach taken at QMU has inspired comment from Martin Stepek (CEO, Scottish Family Business Association) who adds:
"I felt (and continue to feel) that QMU and Claire Seaman are forerunners in family business education in Scotland, something I believe is of vital importance to the economy and country. Claire has a unique and special focus that allows her to view the family business sector from an academic viewpoint, but also a more holistic angle that brings an immensely valuable contribution to the business sector. This should be encouraged and proactively supported, along with the work of peers at QMU."
Impact of COVID and recovering from the pandemic
On-going research has highlighted the challenges caused by Covid19 in Board Rooms up and down the country, explored during Scottish Family Business Day in February 2022, through a series of webinars and via the Scottish Family Business Conference on April 28th. This flagship conference for the Scottish Family Business community is returning in-person to Glasgow as we seek to rebuild and celebrate the sector with an event full of insights, learning and best practice to enable family businesses to address the challenges they face.