The Family Business: moving from mine, to ours, to theirs. DCU Centre for Family Business workshop slides from 25th September 2014.

1. The Legacy Series
The Family
Business:
Moving from
mine, to ours, to
theirs
Event Partner:
Supporters:
Quinn Family
Foundation

2. The Family Business: Moving from mine, to ours, to theirs
Quinn Family
Foundation
PART 1
Country Crest Family Business Story
Mr Michael Hoey
The Elephant in the room
Dr Justin Craig
Grooming for success and learning to let go
Mr Niall Glynn
PART 2
Workshop & Discussions

3. Dr Justin Craig
The Elephant in the room
Quinn Family
Foundation

4. D’Amore-McKim School of Business

5. D’Amore-McKim School of Business
Family Business
Business Family
Families in Businesses
Mine
Ours
Theirs
Elephant in the Room
Elephants in the Room
Elephants in the Rooms

6. D’Amore-McKim School of Business
Meet…
The Elephant in the Room
AKA “Itsinevitable”

7. D’Amore-McKim School of Business
Family Business
Business Family
Mine
Ours
Elephant in the Room
Elephants in the Room

8. D’Amore-McKim School of Business
Families IN Businesses
Theirs
Elephants in the Rooms

9. “Elephant(s)”
• The “Elephant” is linked to Tension
• Tension is linked to…CHANGE
• Change in…
– Ownership
– Management
– Strategy
– Innovation
– Industry
– Technology
– Demographic
– Societal
D’Amore-McKim School of Business
…Bank Manager
…Government
…Regulation
…Interest Rates
…Overdraft
…Climate
…Supplier
…Major customer
…Mother in law
…Daughter in law
…Son in law

10. D’Amore-McKim School of Business
Mine - Ours - Theirs
• G1: “Elephant”/Tension/Change
(ETC) = Succession…4Ls

11. G1 - Moores & Barrett’s 4Ls
Emotional
Technical
Strategic
Operational
Paradox = Inside-Outside
Theoretical
L1 Practical
Learn Business
Micro
Macro
L2
Learn Our Family
Business
L4
Learn to Let Go
L3
Learn to Lead
ON IN
STEWARDSHIP
Priority = Proficiency
Pathways = Go Outside
APPRENTICESHIP
Paradox = Continuing Differently
Priority = Perpetuating Values
Pathways = Keep philosophies, not details;
Learn market value of family values
Paradox = Leading by Leaving
Priority = Prescience (Foresight)
Pathways = Develop timeline for retirement. Create
development management systems. Stick to the plan.
Paradox = Informal Formality
Priority = Perspicacity (Insight)
Pathways = No simple pathways
LEADERSHIP
D’Amore-McKim School of Business

12. D’Amore-McKim School of Business
Mine - Ours - Theirs
• G2: Es/T/C = Succession and
Roles…4Rs

13. D’Amore-McKim School of Business
G2 - The Dennis Family 4R MATRIX
ROLES REQUIREMENT RESPONSIBILITY REMUNERATION
Shareholder Family member • Dividend Policy
• Strategic Invest
Policy
• Appoint
Directors
Dividend
Board Member Skills/Expertise
Knowledge
Fiduciary Market Set
Board Fees
Executive/Employee Qualifications Position
Description
Market set
Salary

14. D’Amore-McKim School of Business
Mine - Ours - Theirs
• G3: Es/T/C = Succession and Roles
and Exit…4Cs
• When you trim the tree and move
to building the ‘forever company’

15. D’Amore-McKim School of Business
G3- Miller & Le Breton’s 4Cs
• Discovered that there were four driving priorities or passions
behind great family businesses and their leaders:
• Continuity…to pursuing the dream: a substantive mission
– to do something important exceptionally well
• Community…to unite the tribe: build a cohesive, clan like
team…embrace strong values that rally people around
what is important.
• Connection…good neighbors: cherish enduring, open-ended,
mutually beneficial relationships with business
partners, customers, and the larger society.
• Command…act and adapt with freedom: the discretion to
act independently – quickly and in original ways - often to
renew or adapt the firm. They typically work with an
empowered top team whose members are similarly free
to communicate openly and make decisions.

16. D’Amore-McKim School of Business
Family Business
Business Family
Families in Businesses
Mine
Ours
Theirs
Elephant in the Room
Elephants in the Room
Elephants in the Rooms

17. D’Amore-McKim School of Business
Some things are inevitable …it is
inevitable that roles,
requirements, responsibilities,
and remuneration are sources
of tension (one of the elephants
in maybe more than one of your
rooms)…consider your own
version of the 4R Matrix

18. D’Amore-McKim School of Business
The Dennis Family 4R MATRIX
ROLES REQUIREMENT RESPONSIBILITY REMUNERATION
Shareholder Family member • Dividend Policy
• Strategic Invest
Policy
• Appoint
Directors
Dividend
Board Member Skills/Expertise
Knowledge
Fiduciary Market set
board fees
Executive/Employee Qualifications Position
Description
Market set
salary

19. D’Amore-McKim School of Business
“Itsinevitable”

20. Learning to let go
Mr Niall Glynn
Quinn Family
Foundation

21. Letting Go
Niall Glynn

22. Observations
1. Obstacles
2. Types of clients we see
3. Conflict – inadequate communication and changing goal posts
4. Lack of professionalism
5. Letting go - ownership level
- management level
© 2014 Deloitte 22 Planning for Family Business Succession Global Services Limited

23. What's holding you back?
• Emotional tie to the business
• Need for security - organisational security
- family security
- personal financial security
- psychological security
• Letting go really means relinquishing control
• If unable to let go – still need a contingency plan
© 2014 Deloitte 23 Planning for Family Business Succession Global Services Limited

24. Problems with holding on
Anger/frustration felt by children
Boredom – children not challenged enough
Business stagnates – lack of fresh leadership
Your business skills/stamina wanes
Capable family members leave
Lack of knowledge sharing
Children approach retirement
© 2014 Deloitte 24 Planning for Family Business Succession Global Services Limited

25. Role of others – its not all about the founder
→ Children: Expectations
Acceptance
→ Spouses: CEO considering spouse
Spouse considering CEO
→ Non Family
© 2014 Deloitte 25 Planning for Family Business Succession Global Services Limited

26. Considerations
- Having an overall succession plan
- Having a retirement policy
- Having a transition plan
- Post CEO roles
- Having a plan for retirement
© 2014 Deloitte 26 Planning for Family Business Succession Global Services Limited

27. Key Themes
1. Communication
2. Preparation of successors
3. Management
4. Leadership/CEO – control
5. Appropriate structures
6. Start early
27 Planning for Family Business Succession
© 2014 Deloitte Global Services Limited

28. © Deloitte LLP: The seminar and these accompanying handouts have been written in general terms and therefore cannot be relied on to cover specific situations;
furthermore, responses given in the seminar to questions are based on only an outline understanding of the facts and circumstances of the cases and therefore do not
form a substitute for considered specific advice tailored to your circumstances. Applications of the principles set out will depend on the particular circumstances involved
and we recommend that you obtain professional advice before acting or refraining from acting on any of the contents of this seminar and these accompanying handouts.
Deloitte LLP would be pleased to advise readers on how to apply the principles set out in this handout to their specific circumstances. Please feel free to contact any
partner. We would be pleased to advise you on the application of the principles demonstrated at the seminar to your specific circumstances but in the absence of such
specific advice cannot be responsible or liable to you for the content of our presentation.
Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 2 New Street Square, London
EC4A 3BZ, United Kingdom. Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu ('DTT'), whose member firms are legally separate and
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© 2014 Deloitte LLP. All rights reserved.
Member of Deloitte Touche Tohmatsu Limited
28

29. Workshop Case:
The Cousins Tournament
Quinn Family
Foundation

30. Executive Summary
“At the Blanchard family’s 1993 New Year’s Eve party, Al Blanchard talks for the first time about retiring as president
of Grandview Industries. Al, 67, is standing on the back porch of his rambling Southern California home, sharing
brandy and cigars with his younger brother, Morris, with whom he has worked for 27 years. ‘I only want to do this
for one more year, Morris,’ he confides. ‘I’ve had enough.’ Then he asks: ‘Do you want to run the company, or
should we turn it over to one of the kids?’”
Grandview is a $200 million company with 2,000 employees. George Blanchard, Al and Morris’s father, founded
Grandview Industries in 1934. The original company made small motors for windshield wipers and other
automobile components. Under Al’s leadership, the company has grown into a diversified manufacturer of a variety
of electrical systems for vehicles and small aircraft, with five divisions in California as well as distribution outlets
abroad.
Morris often expressed impatience and frustration with Al’s conservative leadership, privately. But he and Al had
separate responsibilities, and conflicts were seldom evident.
In more recent years, the two brothers had developed a greater appreciation of each other’s contributions and
roles; they had become closer. Morris is vice president of marketing. Al respects his brother’s opinions but remains
the undisputed leader.
Quinn Family
Foundation

31. Executive Summary (cont.)
Their New Year’s Eve conversation stirred up a lot of old feelings. George Blanchard died at age 73. The founder left
equal amounts of Grandview stock to the five children. By then, Al was already running the company.
Al saw himself as the guardian of the family’s wealth and legacy. Al was determined to protect dividends and follow
George Blanchard’s advice that this was the ultimate recipe for success. Still, the company reinvested and grew
solidly. Al had brought four outsiders onto the board, which originally consisted of all five siblings and the
company’s banker.
In the early 1980s, he took the company public but kept family control by creating different classes of stock and a
holding company. The strategy worked. The company continued to grow while providing a good income to family
members. The five siblings retained equal voting control of the holding company, in keeping with the wishes of the
parents.
In the spring of 1993, at an engagement party for Sarah’s daughter (Sarah is one of Al’s sisters), Al announced to the
family his decision to retire. Al’s announcement raised concerns about the future. Arnold, the other brother, argued
that Al should remain the CEO for another 8 or 10 years. Germaine, the other sister, joked about calling her lawyer
and selling her stock before morning.
Quinn Family
Foundation

32. Executive Summary (cont.)
Al decided to create a succession committee to lay out a plan for selecting the next CEO. Peter Franklin, the owner
of a large freight shipping company, and the first non-family member added to the Grandview board in 1980,
agreed to serve. Peter knew Grandview was way behind in preparing the next generation for leadership. Peter
figured that two family members stood out as contenders for the top job: Al’s oldest son, Joe, 42, was the oldest
member of the third generation. An engineer by training, Joe worked in production for most of his career at
Grandview. Morris’s oldest son, Bill, 41, worked in Europe and turned around one of Grandview’s subsidiaries. The
other cousins in the company were either too young or had not yet demonstrated their ability for the top job. The
cousin he admired most, Edward Chafee, 40, Sarah’s oldest son, wasn’t in the company. Using the stock he had
received as a young man, Ed built a very successful electronic hardware business in Silicon Valley.
At the first meeting of the succession committee, the members agreed that no one individual stood out as the
obvious choice. But Al did not want to continue as president after the end of the year. Therefore, Morris agreed to
take over the CEO role for an interim period. But the committee was very troubled by this scenario and wanted Al
to stay on the job. At the next meetings of the committee, the members could not agree on a plan or a list of
candidates.
A short time later, Peter talked with Ed Chafee. Ed Chafee appeared to be willing to be considered for the job, if it
was offered. He asked Peter to keep the conversation going.
Quinn Family
Foundation

33. Grandview Industries
Manufacturer of electrical systems.
Quinn Family
Foundation
$200 million company.
2,000 employees.
Company CEO is Al Blanchard (67).

34. Quinn Family
Foundation
Company Growth
Original Company - Grandview Electrics.
George Blanchard founded Grandview Industries.
Second generation - diversified manufacturer.
Variety of electrical systems for vehicles and small aircrafts.

35. Quinn Family
Foundation
George
Al
Joe
Fred
Morris
Bill
Chris
Mary
Sarah
Edward
Andy
Jennifer
Germaine
John
Arnold
Stephen
Molly
Denotes that family
members had/have
previous or current
involvement in the
business

36. Finding the Successor
Al is ready to retire. No succession plan.
Succession committee established to find the next CEO.
Committee Chairman: Non-family member (Peter).
Third-generation family members (Mary and Andy).
Quinn Family
Foundation

37. Succession Committee
Each Blanchard sibling will push his/her offspring as successor.
Main contenders for the job are Joe and Bill.
No obvious choice of successor.
Quinn Family
Foundation

38. Quinn Family
Foundation
Rising Tensions
Morris appointed interim CEO - tensions rise.
Cousin, Edward Chafee does not work in the company, however, he has
demonstrated strong leadership skills. Initially he does not show interest in
joining.
Edward shows interest in CEO position.

39. Questions for Discussion
What would you recommend to the Blanchard family?
o What should the process for choosing the next leader be?
o Should the committee be changed? Should Al and Morris be involved?
o Should only cousins with experience in the company be considered?
o Does the interim CEO plan, with Morris serving until the new leader is
Quinn Family
Foundation
chosen, make sense?

40. The Legacy Series
The Family
Business:
Moving from
mine, to ours, to
theirs
Event Partner:
Supporters:
Quinn Family
Foundation

41. Event Partner
Our Supporters
Quinn Family Foundation

42. DCU Centre for Family Business
www.dcu.ie/centreforfamilybusiness
Email: familybusiness@dcu.ie
Phone: +353 1 700 6921
Linked In: DCU Centre for Family Business
Quinn Family
Foundation