It’s a family affair

A sizeable proportion of Australia’s print businesses would be family businesses. According to Family Business Australia, a 2006 business survey found that 67 per cent of all businesses in Australia were family-owned. Bill Healey, chief executive officer at the Printing Industry Association, says that number would be the same in the printing industry. “I don’t think the printing industry would be any different,’’ Healey says. “It would reflect those figures.”

Of course, family businesses have their share of problems. There are succession issues, with company founders often finding it hard to make the transition from parent to mentor and letting go. Being insular and often inwardly focused where family members are just hiring each other, family business managers often lack the skills found in other business.

They also have issues with governance. According to the last MGI survey of family businesses, 62 per cent of family businesses did not have a formal board of directors. And those that did not like bringing in outsiders – 83 per cent did not have non-family, non-executive directors. There are problems with nepotism and relations with non-family staff members. How would it be to report a human resources problem at the company when the HR manager is the boss’s daughter? Then there are performance management issues. How would you performance manage your brother-in-law.

Not surprisingly, most Australian family businesses don’t make it past the third generation. There are no family businesses like Wal-Mart or Rothschild in Australia.

Healey says many family business printers have a big problem with succession and exit planning. “Extremely viable businesses are not continuing to operate because of the failure of the ownership structure to enable them to pass from one generation to the next and that’s a problem because it’s not as if they aren’t viable businesses,’’ Healey says.

“As part of our broader strategy, business succession and disposal is an area we want to look at to ensure that those individuals who are ready to leave the industry can do so as easily as possible. The key to a family business is the ability of the individuals within the family to take over the running of the business.”

Management consultant Kevin Dwyer from the Change Factory -who has worked with print businesses – says the biggest challenge for family businesses is identifying the skills they need to grow. He says they are so used to hiring family they don’t know where to start. More often than not, they can’t afford to buy them all. That means they have to treat it as a risk management exercise and identify the most important skills they need, and then bring in outsiders.

“You need to do a risk analysis to find out which are the skills that will kill you if you don’t get them,’’ Dwyer says.

Another challenge is performance management. The best way to handle that, he says, is to be clear about roles and responsibilities, and spell it out.

“It’s done by being very clear that your personal relationships are very different from your business relationships and the successful family companies do that,” Dwyer says.

“They need to have a very clear view that we are a family and we have fun together but when it comes to work, I’m the marketing manager and you’re the marketing assistant and that’s the way it is.”

He says rules, job descriptions and codes of behaviour should be documented. “If they don’t have it documented they should have a very strong understanding of this is the way we work here,’’ he says. “Documenting it helps you think about it more clearly. It can be done with a memorandum of understanding or you can do it through your normal and vision process.”

“They should be using whatever their performance management system is without fear or favour. If you’re not performing, you get treated like anybody else.”



So if a family member isn’t performing, they get trained and coached. If that doesn’t work, they could get shifted to another part of the business. If they’re still underperforming, it would be time to manage their departure.

Dwyer says if they have boards, they should look at bringing in outsiders to boost the skills around the director’s table. 

He concedes however there are certain advantages in having just family members around the board room table. “The advantages would be that you don’t have an outsider coming in who doesn’t understand the relationships which in family organisations are even more important,’’ Dwyer says. Also, an outsider might not appreciate the way family members made personal sacrifices when the company was going through a tough time. It’s unlikely that an outsider would feel the same way.

On the other hand, an outside director brings in skills and has the capacity to challenge the company’s leaders. They also do it from a non-emotional perspective.


Golden Rules

Dwyer cites golden rules for family businesses. First, create a charter or memorandum of understanding so that everyone knows what the rules are.  If the company is too small to have a board, it should seek external advice from a knowledgeable expert who has a different perspective. Maybe it could even set up a board of advisors.

And finally, the people running it have to work out why they are in business. To make lots of money? To create something for the children and grandchildren? To leave a legacy? The answers will determine the company’s strategy and financials.

What not to do? Avoid nepotism, don’t treat family members differently from staff and draw a clear line between family matters and business matters.

Some family business printers go out of their way to make everything clear and create boundaries between family and business.

Mick Mulqueen, who runs Mulqueen Printers in Bendigo with his brothers Shane and Jodie, says nothing is documented but it works because everything is out in the open.

“It’s a mini democracy,’’ Mulqueen says. “You’ve just got to listen to everyone’s point of view and come to a consensus. It’s majority rule basically.”

Disagreements are always sorted out so there is no impasse. “You just sit down and discuss it, that’s all you can do. It’s never come to a point where anyone has said I’m out. Generally you have to sit down and discuss it,’’ he says.

He says it’s just the family on the board. It ensures everyone is working together.

“If there are any major decisions to be made, we sit down and discuss it and we make that decision jointly,’’ he says. “That’s not to say that everything is always harmonious, you can generally have a blue and it’s over. That happens in every family.”

“The thing is if you have a blue, you have to sit down and talk about it. That’s not to say we are particularly good at that but that’s the advice I would give to people.”

The other important element, he says, is to make sure everyone is clear about their rules. While Mick is managing director, one of his brothers is in pre-press production and the other is a machine operator. The three bring different skills to the table.

“You have to have someone who is basically in charge which is myself but I don’t make any decision without consulting everybody,’’ he says.

John Conomos, the general manager of Cornerstone Press in Queensland, inherited the business that his father Peter started in 1994.

Conomos started as an apprentice in 2004, and learned about estimating and production. He became general manager in 2009 when his father stepped back to become the company’s director. While Peter Comonos allows his son to do the day to day management, he is still very involved in the business in areas like investing in machinery.

“He’s always been my hero,’’ says Conomos . “He’s a very hard working man, he’s my best friend as well so I quite like working with him to be honest.”

How do they handle disagreements?

“We’ve definitely had some clashes but at the end of the day, we are very similar people with similar views on the world and work so we’ve never had any problems at all,’’ he says. “We just sit down and talk it out and reach point and put it into action.”

Nothing was documented but as he sees it, there was no need for it. “When I took over the business we had to identify who did what. There is nothing written, it’s an unwritten law.”

Just as every family is different, every family business has its own approach. But however different their approach, the successful ones have some things in common: all roles are clearly spelled out and no problem is swept under the carpet



Tennyson Group

Mitchell Simpson, the managing director of the Brisbane-based Tennyson Group  and his wife Karen, the general manager, have set up systems for the business started more than 50 years ago by his parents. Mitchell’s sister Sue works in reception. His two daughters work there in production and marketing, his son doing accountancy and a bachelor of business is there part time working on quality assurance. His brother was involved in the business but has left and now sub-contracts his services back to Tennyson.

Simpson says everything is kept very businesslike. “We meet very regularly and conduct it professionally,’’ Simpson says.  “We have management meetings, we have production meetings, we have sales meetings where we discuss all these things as we would in a very professional business.”

The important thing, he says, is to maintain the boundaries between business and family. The two don’t mix.

“When we have a management meeting or one of our family meetings, we raise all the issues that exist within the business,’’ he says. “We have clear lines of delineation between what the jobs are and clear lines of communication. Our management meetings are proper management meetings. We don’t talk about the bloody dog or the kids. It’s management and business. And when we get together for lunch on a Saturday, we don’t talk about work.”

It’s all documented, right down to the point of everyone, and that includes Simpson, having key performance indicators. Everyone is performance managed. That, he says, is critical for Tennyson’s success. “You have to establish clear lines of delineation and each person has to report back. You’ve got to be accountable,’’ he says.

If there is any major disagreement, people are free to leave. No one has done that yet.

Simpson says the board of four is kept to family members although he says that might change as the company grows. He is also looking to bring in skills from outside, specifically a sales manager.


McKellar Renown

Chris Norgate, the co-general manager of McKellar Renown Press in the Melbourne suburb Carnegie says the whole system at the company owned by his family for more than 60 years is built around trust. His father Steve and his uncle John work there. His grandfather Ray, now in his 90s, still comes in.

Norgate acknowledges working with family has its challenges but he says it’s worth it and gives the company a competitive advantage.

“Working with families gives you a great sense of purpose and unity,’’ Norgate says. “People can tell that you are running a fair dinkum business with solid honest values.

“There are companies that don’t promote the fact that they are family businesses because it makes them sound like a cottage industry. We don’t shy away from it, we think it’s a great point of difference to our competitors. It tells people there are three generations of craftsmanship and the pride that comes with our products.”

There is no charter or memorandum of understanding. Position descriptions are written down but he says everything is so fluid these days that they don’t really amount to much. What holds it together, he says, is trust.

“We are unified,’’ he says. “We wouldn’t have had the success that we have had if it weren’t for us presenting a unified front. There is an enormous element of trust within that. We’re a close family outside of work and there’s an enormous amount of trust you place in family members. That trust is implicit in all the relationships.”

In fact, he says that element of trust is more powerful than any documentation.  “If the values and structures are acted out daily, that bodes well for a structure to work rather than something that’s enshrined on a piece of paper and isn’t reaffirmed through practice,” he says.

All contentious issues are discussed through to stop things reaching an impasse or getting bogged down in conflict. “Objections are generally discussed out,’’ he says.

“Everyone has a voting right on decisions but at the end of the day, no decision goes to the board without the blessing of all the parties. People aren’t married to their own opinions. If they are able to sell the idea to the other parties and get 100 per cent backing, then it will go ahead. People can present a business case for an idea or an issue and it will be discussed. It may be more laborious but it does mean that everyone is on board with the decisions that are made.”

The key to success, he says, is clarity around roles and the company’s mission. “I think it comes down to clear delineation of roles and responsibilities, who you are accountable to, who you escalate to and what the chain of command is,’’ he says.

“Any dispute resolution or decision making from my own point of view coming into this business over the past decade, was already ingrained in the business from the previous generation and it continued.”

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