Vantage Blog

blog date arrow
28
Sep
2014

Vantage September 2014 Newsletter Out Now

To paraphrase a former prime minister it quite often seems that every parrot in the pet shop is squawking about value propositions! But what is a Value Proposition, and how do you best deliver real value to your customers? In this month’s post we make clear what a value proposition really is, how you can define and refine it, and also provide some simple tools and examples to do just that. 

You can also watch our recent webinar on value propositions by clicking here.


Also in this edition:
We hope you find something of interest. 

Please feel free to contact us to discuss how any of these issues may impact your business.

Best wishes,
Vantage Strategy & Marketing

To paraphrase a former prime minister it quite often seems that every parrot in the pet shop is squawking about value propositions! But what is a Value Proposition, and how do you best deliver real value to your customers? In this month’s post we make clear what a value proposition really is, how you can define and refine it, and also provide some simple tools and examples to do just that. 

 ..

blog date arrow
16
Sep
2014

Appointing an Outsider: The need for an independent advisory board in a growing family business

This post is by our colleague Greg Gunther from Gunther & Associates: Family businesses face the same challenges as any other enterprise. In a family business however, things can get complicated as decisions may be influenced by relationships and emotions, which would not be an issue in other organisations. This can create difficult situations especially when it comes to choosing someone outside the business to join a family business board.


When choosing someone to join the family business board, two options are usually considered:
  1.  Having an experienced and/or elder family member occupy the position; or
  2.  Appointing an independent director.
Option 1 is an obvious choice. The 2013 MGI Australian Family and Private Business Survey of 5,000 family businesses showed there is some reluctance to the idea of considering an external person as part of the family business board. 62% of the families surveyed do not have a formal Board of Directors. Of those who have a formal Board, 83% do not have a non-family, non-executive director on their Board. This may not pose an issue when everything runs smoothly, but when things get rough it can be tricky due to the uniqueness and complexity of a family business. A qualified adviser can bring a new perspective and help with the implementation of a corporate framework which will provide structure and clarity to the business.

Reluctance to appoint an independent director on family boards

It can be really tough at times to hand over the management and executive decisions of a family business to someone who is not a family member. In the survey 49% of the family firms surveyed did not have independent directors on their board due to their desire to retain privacy in the business, whilst 29% said that the skills required at Board level exist in-house. 11% of them weren’t able to find someone suitable, 7% said it's too expensive. This shows that the majority of family firms keep their boardroom doors locked, reluctant to let in an outsider. 

Conflicting interests and family ties are often the main reason why business decisions become so complex in family businesses, and this is where an adviser from outside the business can step in. They can help to make the best decisions and balance the needs of the business with the desires of the family members involved.

Why families should consider appointing an outsider to their Board?

The role of an independent advisory board in a family business can add a higher level of expertise and experience and help with the growth and expansion of family firms.

Here are the main reasons:
  • They facilitate the clarification of goals and roles.
The overlapping of ‘family’ and ‘business’ often blurs the path to making everyone accountable to agreed roles and shared business goals. Objective facilitation from an independent director allows for looking after the overall well-being of the family business and challenging the family in pursuit of its long-term and short-term objectives.
  •  They offer impartial advice.
An independent adviser can confront issues and give their impartial and unbiased guidance on matters without any conflict of interest and tangled emotional issues.
  • They see what the family often miss.
Independent board members can often identify critical issues of concern like succession planning or a family dispute as it develops, and act as a mediator to work it through.
  • They can guide the future leaders in the family.
An independent adviser can also mentor a new generation of leaders and prepare them to lead and grow the business in the future.
  • They serve as an impartial channel for communication to all family shareholders.
An independent adviser can act as a mediator during major disputes that arise in family boards and help to resolve issues, especially if there is poor communication between family members.
In conclusion, having an independent director on the board is something every family business should consider. They can add value by bringing a new perspective to the board and can facilitate better communication between family members within the business. 

Sources:

About Greg Gunther
Greg has helped many owners of small to medium-sized businesses in his role as a director, board member, mentor and consultant. He has an intimate understanding of the challenges and opportunities facing business owners today. With his compassionate nature and extensive experience Greg helps his clients to create a valuable business asset. Visit Greg’s website at www.guntherandassociates.com.au

Contact Greg at greggunther@guntherandassociates.com.au
Connect via LinkedIn

This post is by our colleague Greg Gunther from Gunther & Associates: Family businesses face the same challenges as any other enterprise. In a family business however, things can get complicated as decisions may be influenced by relationships and emotions, which would not be an issue in other organisations. This can create difficult situations especially when it comes to choosing someone outside the business to join a family business board. ..

blog date arrow
13
Oct
2013

The Benefits of Family Business

From Guest Blogger Russell Cummings...

The term "Family business" usually refers to a small or mid-sized company that has a local focus and is plagued with a familiar set of dilemmas such as succession. In spite of that very simple description, family businesses have played a powerful role in the world economy and have included, through the years, big businesses worldwide. Some examples in Australia of successful family businesses are LinFox, Smorgon Group, Cooper's Brewery and there are plenty of others.


Most of the time, the key to success of a family business lies in its unique ownership structure that allows them to plan and thrive in the long-term. But other researchers believe that it is also this structure that causes many of them to fall. So what’s really the case?


In a recent article from Harvard Business Review, What You Can Learn from Family Business by Kachaner, Stalk and Bloch, presented a rigorous analysis of how family businesses and non-family controlled businesses differ in management and performance.


And from this article, we’ve derived seven points on how family-run businesses manage for resiliency and how business managers can benefit from these principles.


1. Family Business is Frugal in Good and Bad times.


In most cases, family businesses view their money as "the family’s money” which is why they often do a better job of keeping expenses under control. This can be a weakness as often, to save a buck, they invest with shorter timeframes in mind rather than thinking of the long term.


2. A Family Business Keeps Their Bar High for CAPEX.


Family-run firms have a simple rule when it comes to capital expenditures – they make sure they do not spend more than they earn. They often run "leaner” than their corporate cousins.

3. A Family Business Has Little Debt.


Family businesses, because of their close-knit and simple structure usually associate debt with fragility and risk, and tend to avoid it. They usually have very strong balance sheets.


4. Family Business Make Few and Small Acquisitions.


Although an acquisition can transform a company and pay large rewards, it can carry a high risk. And this is why family businesses shy away from large acquisitions and prefer to make few of these deals and only favor companies that are close to the core of their existing businesses.


5. A Family Business is Diversified

.

In this day and age, diversification is important to keep a business alive and it is no different with a family-run business. Diversification has become one of the key ways to protect family wealth. In fact, the Smorgon Group in Australia is an example of a diversified family business that went from meat to steel, and paper.

6. A Family Business Is More International.


Contrary to what most people know, family businesses are ambitious about expanding overseas. In fact, they often generate more sales out of the country (USA) than other businesses do.


7. A Family Business Is Better at Keeping Talent.


Businesses that are family-owned prefer to extol the benefits of longer employee tenures thus creating a stronger culture.

With these seven points, we can conclude that despite its small and simple structure, family businesses have shown to be resilient in times of economic uncertainty. I think this is largely driven by a strong sense of ownership of the brand and finances. Yes, they are not without pitfalls, the largest being inter-generational transfer but they survive through the years by focusing more on resilience than performance.


Thanks to Russell Cummings from Strategic Business Development

From Guest Blogger Russell Cummings...

The term "Family business" usually refers to a small or mid-sized company that has a local focus and is plagued with a familiar set of dilemmas such as succession. In spite of that very simple description, family businesses have played a powerful role in the world economy and have included, through the years, big businesses worldwide. Some examples in Australia of successful family businesses are LinFox, Smorgon Group, Cooper's Brewery and there are plenty of others. ..


Latest Blogs
 
Share This
 
Search the Blog
 
Subscribe to our Blog
 
Click here to subscribe to receive regular updates on business strategy & marketing.
OUR APPROACH
Our approach line
Vantage Strategy & Marketing helps leaders improve their business by cutting through the clutter.
We work collaboratively with our clients to develop clear strategy, achievable goals and actionable plans.