Gordon Carson of 4c Executive says that despite only a small percentage of ‘family run’ businesses lasting beyond the third generation, there is a key strategic investment which would pay dividends in the future.

Family-owned businesses are a vital and intrinsic part of the Northern Ireland economy, with more of them in operation here than in any other UK region. In fact, family businesses in Northern Ireland collectively employ over 50,000 people and some have workforces numbering into the thousands.

However, it is somewhat discouraging to see that despite 74 per cent of companies in Northern Ireland being classed as ‘family run’, recent research shows that only 3.2 per cent of them survive beyond the third generation, and, in general, they display lower growth levels than non-family businesses. This may be due to a disconnect between the vision held by the founding generations and its interpretation by those taking to the helm in later years.

Moreover, even the fiercest entrepreneurial confidence within families has probably been somewhat shaken by recent uncertainty over the future.  Given Northern Ireland’s current political turmoil and growing uncertainty over the terms of Brexit, family-run companies are struggling to make long-term plans.

However, there is one key strategic investment which family-run companies can make now which will pay dividends in the future, both in terms of tempering the current effects of external forces and in providing smooth transitions into a new trading environments in the future.

Succession planning allows companies to take control of key aspects of their business’ future and to think about the trajectory of their business. Although the crafting of such strategies often gets pushed aside by well-meaning but busy entrepreneurs, a strong succession plan means business owners can balance the needs of their families and business and ensure they leave behind a legacy to be proud of.

At 4c, we’re working with family businesses in Northern Ireland every day to advise on both the development and activation of their succession plan.  We’re helping senior leaders to think about the future of their organisation and, importantly, who will be at the helm, driving it through its next phase of growth and success.

This can mean helping to identify the gaps in their existing leadership structure and the new skills that will need to be brought in propel the business forward. It can mean helping them to define their organisation’s culture and the ‘type’ of person that would likely be a good fit with their company ethos and family values. It often means executing an in-depth, methodical search process to find the best available talent to work alongside senior-level members of the family in the business.

Understandably, bringing a ‘new outsider’ into what has typically been a family-dominated leadership team doesn’t sit comfortably with them at times – but at 4c we have the strategic vision, commercial insight, skills and experience to guide a family business through this process, helping them to focus on the many benefits that this will deliver in the long term.