With Australia's golden generation of Baby Boomers heading into their retirement years some of the nation's most successful family businesses are facing generational change.
For many it can be a fraught process and as PwC Private Clients partner Paul Lewis said at a recent "Succession Planning" roundtable co-hosted by The Australian Financial Review and PwC, businesses often don't fail for business reasons but they ultimately fail for family reasons.
"We see it all the time, families get together but they don't talk about family, only business," Lewis says.
According to Lewis, eventually all the pent-up frustrations bubble over and they have the potential to rip a family business apart and with a massive succession event on the horizon, it would be a shame to see this event corroded by family issues.
Interestingly, all the family businesses present at the roundtable not only spoke passionately about the importance of communication within the family but also with their employees.
For Nathan Lowe of IT managed services company ASI Solutions, the first thing he did when his parents Ken and Marie officially resigned as directors of the organisation was fly every full-time employee (110 staff) up to Sydney.
"It was the best thing I did. I got up on stage and talked to everyone. I drew a line in the sand and said my parents had obviously done a great job for 30 years but that was the past. We're here, we are not selling and we are not going anywhere," Lowe says.
"All the staff really appreciated being included in message and from there we have recorded double-digit growth over the last couple of years."
Grant Menzies, the chief executive of Australia's last watch manufacturers, Adina, also said it was important to manage the succession process with employees. As his father has slowly moved back from the day-to-day running of the 46-year-old company, Menzies has begun to implement change.
"We have guys that have been with dad for over 30 years and they have a nickname for me 'SOO' or Son of Owner. Dad and I would discuss change and then I would implement it and that was dad's way of going about generational change. What I'd do was get everyone together and tell them what was happening. Nowadays, I also tell the guys every month how we're going, I tell them about the number. There's a degree of openness there now across the business."
For Vanessa Katsanevikis at high-end tap manufacturer Sussex Taps, there was a lengthy succession plan put in place with her then ailing father and part of that plan was ensuring all the staff were on board.
"The factory floor knew me all my life but my husband and I had to get onto the factory floor and earn their respect. We wanted to establish our own vision for the company and that was pretty daunting for us," she says.
"We really needed to get into the business and clean it up. We wanted to improve manufacturing and strive for continuous improvement. Dad loved the business, it was his hobby and his passion and my husband George loves his efficiencies.
"Getting people on board was a challenge at the start because we had to prove we were doing the right thing with the business and the staff were a little nervous at the beginning but with time, we were able to communicate that we were all in this together."
Debbie Hill, of Supagas, agreed there was immense value in including all the staff in communications.
"We tell everyone everything. Every person understands exactly what we're doing and why. We share so much and people feel invested in the company so you've got to share," Hill says.
Allister Lewison, of Melbourne-based property investment company, OpenCorp also believes including all the staff in communication is the key to a family business's continued success.
"We have around 70 staff and they feel it's their own family business as well. We're pretty inclusive – it's an extended family business."
