READY, WILLING, EMPOWERED – CREATING A FOUNDATION FOR GENERATIONAL TRANSITIONS
As leaders of family business Akhurst Machinery & Cantek America Inc., Ryan Akhurst, Eric Stebner, Brent Akhurst and Graham Akhurst (from left to right) are working together to create a foundation from where the family legacy can continue. supplied
Family enterprises in Canada have much to be proud of, from their dedication to creating jobs and value in local communities to their contribution to the economy, believes Olivier de Richoufftz, general secretary of the Family Enterprise Foundation, the charitable organization associated with Family Enterprise Canada.
Since family businesses play a key role in society, their continued success is of utmost importance, and a recent Family Enterprise Foundation study gauged the readiness of family-owned enterprises for the upcoming period of generational transition.
“We wanted to understand the intentions of family businesses as well as the perceived barriers to the transition of ownership,” says Mr. de Richoufftz. “Why is this important now? Because with baby boomers heading into retirement, we’re facing the biggest business transition of the last five decades.”
“Giving back to – and helping to strengthen – our community is part of our culture and legacy. It is rooted in the Jewish tradition of tzedakah, which has been passed down from my grandparents and great grandparents. ”
This purely Canadian research representing family businesses shows that one-third (36 per cent) of owners think the business is not going to their rising generation; for many, this is due to a perceived lack of interest and inexperience among family members. For Mr. de Richoufftz, who represents the 20th generation of his family business, this is a significant shift from previous transitions.
“In the past, taking over the family business seemed natural; we didn’t question it,” he says. “But now, it seems we cannot assume our children are going to be interested in running or owning the business.”
Mr. de Richoufftz hopes to engage Canadian business families in discussions about what these findings mean to them. “Help us paint a fuller picture of this research,” he says. “What are your concerns? What has worked for your family business?”
Insights from business family leaders and certified Family Enterprise Advisors suggest that timely transition planning – and engaging the next generation – can help to improve outcomes.
Karen Bichin, manager of community relations at ABC Recycling, hopes to spark an interest in the family business by taking younger family members to the operating site and allowing them – under close supervision – to check out the big machinery.
As a fourth-generation member of the 109-year-old scrap metal recycling family firm, Ms. Bichin recognizes the need for taking an intentional approach to involving family members in the business. This led to the creation of a formal family employment policy, a structure that didn’t exist when she joined the business, as well as a book on the family’s history and legacy.
Her family’s core values motivated Ms. Bichin to choose the family business over other career options. “Giving back to – and helping to strengthen – our community is part of our culture and legacy,” she says. “It is rooted in the Jewish tradition of tzedakah, which has been passed down from my grandparents and great-grandparents.”
A strong alignment of values is also at the root of the family’s dedication to ensuring the success and continuity of the business, she notes.
Recent challenges inspired Ms. Bichin to become involved with Family Enterprise Canada and work with a facilitator on “being more intentional about the family side of the business and setting it up for success for the next generation.”
Similarly to Ms. Bichin, Ryan Akhurst, vice president of Akhurst Machinery & Cantek America Inc., is drawing on personal experiences to ensure younger family members are familiar with the business and have the tools for success should they decide to become involved.
He joined the family business when he was 23, nearly 25 years ago, and “rose up through the organization in a pretty organic way,” says Mr. Akhurst, adding that he and his cousin worked in several roles before being invited to attend monthly management and annual strategic meetings.
However, this gradual transition was suddenly accelerated when his father – like his grandfather before him – developed dementia. Within a year, both Mr. Akhurst’s father and uncle left the business.
While Mr. Akhurst, his brother and his cousin had already established a foundation within the business at the time, a formal process of learning how to be an owner was lacking.
“There were times in my career when I considered leaving the business, as I did not see a clear career path and did not feel I was being prepared for success as a leader,” says Mr. Akhurst, who now actively engages the next generation in family meetings and discussions about what it takes to be an effective owner.
“Transitions don’t happen overnight; they require a plan and passing along knowledge over time,” he suggests. “Running an organization with over 70 people, whose livelihoods depend on our success, is a big responsibility.”
For Mr. de Richoufftz, such sentiments – and a commitment to creating jobs and contributing to the well-being of their communities – illustrate the benefits of keeping businesses in the family.
“Family enterprises represent capital with a face. If these businesses go to foreign owners, for example, their impact on local economies will not be the same,” he says, adding that even if next generation leaders are not interested in playing an active role in day-to-day operations, they can still be good owners.
Finding common ground in exploring the key questions of “what, why and for whom” can give Canada’s family enterprises a foundation for continuing to thrive over the next 100 years, adds Mr. de Richoufftz.
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To view the full report as it appeared in The Globe's print edition: Family Enterprise Matters