This month’s comment comes from Ola Adeosun. Ola Adeosun is a Partner and Senior Wealth Planner at LGT Vestra, a UK-based wealth management firm and part of the private banking group LGT, owned by the Princely Family of Liechtenstein. Ola leads the firm's family business governance and succession service, providing specialist advice to clients in all areas of wealth planning.
Over the past 12 months I have spoken to many families about the challenges they have encountered navigating their businesses through the COVID-19 pandemic.
One business was in the 25th successive generation with the same family and had been through the industrial revolution, two world wars, forty-seven recessions, a clutch of banking crises, countless stock market crashes and the defeat of Napoleon1. Despite such distinguished history, even they had new challenges to face when dealing with nationwide lockdowns. I also spoke with much newer entrepreneurial families who were yet to transition to the next generation. The experiences of one family business in particular resonates.
The business is the ‘5th sibling’
The business was established in 1991 and is managed by the founders, a married couple with four children. The two elder siblings have been actively working in the family business, a data technology company, for several years.
The family reached a reflection point in 2018, when the founders were looking to take a gradual step back from the day-to-day running of the business, to pursue other passions. However, they were not ready to completely relinquish control of the business. The matriarch fondly referred to the business as the '5th sibling'. The term was partly due to the business being founded at the same time as they had their children, but also, they were so proud of the business they had built; they wanted it to remain in the family.
The two siblings who worked in the business were ready to step into their parents' shoes and, wished to understand how they could ultimately own a stake in the business. The two younger siblings, whilst not working in the family business, wanted to be involved in the wider family enterprise.
Building trust in the next-gen
As the family created foundations for the transition of ownership, it became clear that the existing structure, in which power and decision making had been determined by the founders would no longer be appropriate. To be able to take the desired step back, the founders needed to trust in the abilities of the next generation to take on leadership roles.
Likewise, all four members of the second generation agreed that they were a family that wished to remain in business together. One of the younger siblings started working with the parents in a new venture and, the other took on a prominent role in the family's newly established charitable foundation, dedicated to improving the lives of disadvantaged young people in the local area. This was a family that believed that it was stronger together and encouraged each and every member to find a role within the wider family enterprise, that played to their respective strengths, skills and passion.
Thriving during a global pandemic
Fast forward to 2020 and a global pandemic. At the start of the crisis, the first question the family asked was how they could use their unique position in the community to make a difference. Each family member had a role to play in steering the family enterprise through the challenges posed by the pandemic; from focusing on the day-to-day running of the main family business to utilising resources available via the charitable foundation to provide for those experiencing hardship in the local community.
Each entrepreneurial family is unique in its own way. However, regardless of whether the business is in its 25th generation or still in the control of the founders, having a shared purpose of why the family wishes to remain in business together, provides a platform that enables the family to continue moving forward during good times as well as times of adversity.
Ola Adeosun is a Partner and Senior Wealth Planner at LGT Vestra. Ola leads the firm's family business governance and succession service, providing specialist advice to clients in all areas of wealth planning. He provides specialist advice to clients in all areas of wealth planning, in particular helping entrepreneurial families navigate their business, ownership and family structures.