Keeping It In The Family – Is It A Good Idea?

  • Blog •   May 01, 2022
Lee Andrews, CEO of DOC Cleaning, reports.

Last month, we celebrated our company’s 50th anniversary with a very enjoyable gala dinner for staff and clients in London. As you may know, DOC is very much a family firm and it started me thinking about family businesses and the fact that although DOC now employs third generation family members, there seems to be a dwindling number of medium-to-large cleaning companies that remain truly independent, family-run organisations.

One reason could be that families get tired of discussing cleaning every time they sit down for a special occasion – worryingly this really does happen in my house! But joking aside, more frequently heard explanations include the younger generation just not wanting to take over, the challenge of running a company being too much to handle, or the understandable temptation of simply selling out to a good offer.
The fact I am writing this probably gives you a clue as to my thoughts on the matter – I am a firm advocate of family-run organisations. What’s interesting, however, is that our industry is well-served by small, micro businesses who start out as family concerns, and it is therefore a fertile environment for family businesses to grow and prosper. Which begs the question, what are the pros and cons of ‘keeping it in the family’ and why is family ownership rare amongst larger companies?

Positive associations that spring to mind with family- run businesses include loyalty, dedication, passion, and a great sense of pride in what you do. I think you can add to this a feeling that decisions are made with long term stability in mind, rather than the short-termism which you could argue is prevalent in organisations where the executive team is beholden to shareholders who are divorced from the business and are primarily interested in this year’s dividend. On the opposite side of the coin, however, are some classic problems that go with family- run businesses. These include lack of communication between family owners and senior management, decisions taken without consultation, failure to move away from ‘the way we’ve always done things’, and a sense that the family knows best.

So what are the necessary conditions for a family- owned business to grow successfully and profitably? An obvious answer, you might think, is to offer minority shareholdings and I’m sure this is what some owners do. However, that in itself is no guarantee of expertise and the critical step is surely to co-opt onto the board or senior team a number of independently-minded executives who bring valuable professional insight into areas where the family might not be so strong – HR and finance are areas that spring to mind.

Once you’ve got the right mix of experience, it’s then up to the owners to make sure that the ‘independents’ are made to feel less like advisors and more like members of the family themselves and I think there are two elements to this. The first is to let them see that anyone in the company who really is family receives no better treatment than they do, in fact if anything that the actual family have to work harder to earn their position. The second is to look after them as if they really were family. In many ways this is a state of mind that needs to be developed, which may prove difficult for some family owners who, for whatever reason, are unable to show the same trust and respect for non-family members as for their own flesh and blood.

When all’s said and done, there are tangible benefits from a client point of view of working with a successful, wholly committed family business. For the business itself, it is simply a case of unlocking those benefits by creating the conditions in which everyone gives of their best, irrespective of their connection to the owners.

Published in May issue of Cleaning & Maintenance

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