Generations committed to advancing family enterprise
Family business spirit burns strong as the next generation realize they can put their own “stamp on things” while nurturing a flourishing enterprise. Justine and Terry Zavitz, Zavitz Insurance and Wealth.
Thirty-five years ago, when Elaine Gerrie moved into the family business, Gerrie Electric, in Burlington, her father Ken, who founded the company in 1957, welcomed her with open arms. “He was brilliant,” she says about the way he encouraged her and her sister, Heather, who also joined the company post university, to “follow our passion.
“If that meant coming into the company, great. If not; that was okay too,” says Ms. Gerrie, who shares the title of co-president with her sister. However, both women were surprised that there was no roadmap or plan for them to move into their new roles.
“We were expected to follow our interests, provide value and go for it,” she says, though they also acquired vast experience and knowledge by working in all facets of the company, surrounded “by a great team of smart people.”
Today, says Ms. Gerrie, the company has embraced a somewhat different approach to transition, as her son and two of her sister’s children, who they refer to as “the 3G,” are moving into executive roles. The next generation has benefited from an in-house management training program, coaching and mentorship, she explains.
Nonetheless, she says her father’s strategy of “trusting us, letting us make mistakes, learn and grow, and having the confidence that we could find our own place that would build value for the business,” are aspects of succession that she and her sister hope to embody.
“He really was a great founder passing it over, and we need to be as generous to our third generation, as Dad was to Heather and me.”
According to a recent study by Family Enterprise Canada that examined Canadian family business transition intentions, over the next decade, 64 per cent of family enterprises in Canada will be undergoing changes to ownership, with a forecast of approximately 40 per cent of next generation family members taking control within seven years.
These percentages are significant, says Bill Brushett, president and CEO of Family Enterprise Canada and Family Enterprise Foundation, based in Oakville. “Because, whether it’s transition in leadership, transition in ownership or other transitions that occur in the lifecycle of a family business, those are the riskiest times for the families.
“Family enterprises are the backbone of the Canadian economy,” accounting for close to 50 per cent of private sector GDP and nearly 7 million jobs, notes Mr. Brushett.
So it was “a pleasant surprise” to see the findings of another recent study, Who are the Guardians of Family Legacy, he says. It determined that next generation family members are committed to a role in building and sustaining the family business and their legacy, contrary to concerns by the senior generation that they might not be motivated or interested in carrying on the family enterprise.
Mr. Brushett surmises that this can likely be attributed to what he calls the “family-ness factor.”
“If you grow up in a family business, you have a strong affinity for it, whether you’re destined to work there or not.” That’s important, he adds, because the continuity of family-owned businesses benefits local communities immensely. They invest in the local economy, offer stable jobs and “make a big impact.”
Family Enterprise Canada offers peer communities, including Personal Advisory Groups (P.A.Gs), programs and resources specifically for family businesses to help ensure this vital sector continues to thrive, explains Brushett.
Seeking and being open to advice when it comes to working through family business matters, including transition, makes sense to Aaron Berman, vice-president of operations and manufacturing at BERMANFALK Hospitality Group, headquartered in Langley, B.C.
“I’ve found it to be invaluable,” he says.
A little more than five years ago, Mr. Berman joined the family business, which designs and manufactures custom case goods and seating for four- and five-star hotels across North America. Having moved through one transition to working alongside his father, Gary, and brother Daniel, vice-president, sales and marketing, and while contemplating their next steps in succession planning, he turned to his P.A.G, who helped him break through what he had perceived as roadblocks.
“... whether it’s transition in leadership, transition in ownership or other transitions that occur in the lifecycle of a family business, those are the riskiest times for the families.
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“Why not learn from those with similar experience or from educated advisors who can walk you through the necessary steps? Because inevitably, if you try to do it on your own, you’re going to miss something,” says Mr. Berman.
The need for dialogue and communication within the family and leadership team is also critical, he adds, noting that his family is “incredibly lucky that we’re open with each other.
“We don’t always agree. But we listen to each other and work things through.” And that’s imperative, he points out.
“The harmony of the family is number one. No matter what. Because otherwise, it’s really not worth doing.”
Justine Zavitz, vice president of Zavitz Insurance and Wealth, which was founded almost 40 years ago by her mother Terry, in London, Ont., agrees that “communication is huge,” and especially when it comes to managing points of tension and conflict.” While she initially thought she would “never follow in her mother’s footsteps,” she joined the firm approximately 17 years ago and has never looked back.
She and her mother “see and respect each other’s viewpoints and priorities” and in doing so, “we come up with a better solution than we could have on our own.” But she says family dynamics can be hard, and difficult conversations can trigger emotional responses.
That’s why she agrees that coaches and external resources are integral to helping family enterprises blossom. “I can’t say enough about my Personal Advisory Group,” who are “objective, unbiased and incredibly helpful to me.”
While initially resistant to taking time out of her busy day to meet with outsiders, she says they’ve become “like mental lifelines.”
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To view the full report as it appeared in The Globe's print edition: Family Enterprise