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FAMILY
BUSINESSES
THE ESSENTIALS
FAMILY
BUSINESSES
THE ESSENTIALS
PETER LEACH
Foreword by Roger Pedder

First published in Great Britain in 2007 by
Profile Books Ltd
3a Exmouth House In fond memory of
Pine Street
Exmouth Market Neil Crawford, Leslie Lewis, Jonathan Davis and Paul Bates
London EC1R 0JH
www.profilebooks.com
Reprinted with revisions in 2011
Copyright © Peter Leach 2011
The moral right of the author has been asserted.
All rights reserved. Without limiting the rights under copyright reserved above, no part
of this publication may be reproduced, stored or introduced into a retrieval system,
or transmitted, in any form or by any means (electronic, mechanical, photocopying,
recording or otherwise), without the prior written permission of both the copyright
owner and the publisher of this book.
A CIP catalogue record for this book is available from the British Library.
ISBN: 978 1 86197 861 5
Consultant editor: Simon Perry

Illustrations by Belle Mellor
Text design by Sue Lamble
Typeset in Stone Serif by MacGuru Ltd
[email protected]
Printed and bound in Great Britain by Clays, Bungay, Suffolk
The paper this book is printed on is certified by the © 1996 Forest Stewardship
Council A.C. (FSC). It is ancient-forest friendly. The printer holds FSC chain of custody
SGS-COC-2061
SGS COC 2061

Contents
Foreword by Roger Pedder / xii

Preface / xiv
Acknowledgements / xxiv
1 Why family businesses are special 1

Definitions / 2
Economic impact / 2
Special strengths / 4
Family business culture and values / 4
Predictable problem resolution / 5
Commitment / 6
Knowledge / 6
Flexibility in work, time and money / 6
Long-range thinking / 7
A stable culture / 8
Speedy decisions / 9
Reliability and pride / 10
Dilemmas and challenges for family businesses / 11
Resistance to change / 11
Business challenges / 12
Succession / 13
Emotional issues / 14
Leadership / 15
A competitive edge and outperformance? / 15
Successful sectors for family businesses / 16
2 Family business dynamics: people, systems and growing

complexity 19
Family business people / 19
Founders / 19
Women in family businesses / 23
Husband and wife teams / 24
In-laws / 25
Multifamily ownership / 27
viii ✱ Family businesses Contents ✱ ix
Non-family employees / 29 5 Getting help: making the most of outside resources 91

Managing conflict in family firms / 29
Non-family managers / 91
Family business systems / 38
Relationships with the family / 92
Seeking a balanced approach / 39
Introducing external executives / 94
Introducing the ownership dimension / 41
Motivation and rewards / 96
Family business life cycles: a story of growing complexity / 44
Incentive design and delivery / 97
Life-cycle stages / 44
Non-executive directors / 100
Ownership transitions / 47
Selecting the right candidate / 101
Board practices / 103
3 The family’s relationship with the business: developing a Professional advisers and consultants / 104
strategic vision and building teamwork 50 Are your advisers keeping pace with your needs? / 104
Articulating values and a shared vision / 50 Consultants / 104
Effective business families / 54 Family business consultants / 105
Ingredients of successful planning / 56 Beware conflicts of interest / 107
Establishing open communication / 56 Relationships underpinning an advisory role / 108
Creative versus destructive conflict / 58
Building family teamwork / 60 6 Professionalising the boardroom: the role of a balanced
Unifying plans, processes and structures / 62 board of directors 109
Designing family governance / 64
The rubber-stamp board / 109
Family council / 64
Making the transition / 110
Family retreats / 67
Establishing a well-balanced board / 112
Family constitution / 67
Board composition / 112
Conclusions / 70
Organising the board / 115
Effective, working boards / 115
4 The next generation: human resource management and Relationship with the family / 117
leadership perspectives 72 Two-tier boards / 119
To join or not to join? / 72
The importance of outside experience / 76 7 Cousin companies: family governance in multigenerational
Self-esteem and confidence / 76 family firms 121
Wider business experience / 76
Introduction / 121
Credibility with non-family employees / 77
Evolution of family business ownership / 124
Systems overlap and human resource management issues / 78
Culture shock / 126
Recruitment / 79
Complexity in cousin companies / 126
Training and development / 82
Family complexity / 127
Remuneration / 83
Ownership complexity / 127
Performance appraisal and promotion / 85
Responding to growing complexity / 129
Working in the business / 86
Ownership policies / 130
Seek out a mentor / 87
Business policies / 132
Gain the respect of employees / 87
Family policies / 133
Tread carefully / 88
Setting up a family governance process / 133
Beware sibling rivalry / 88
Recording decisions – the family constitution / 134
Work at establishing personal identity / 89
Structuring family governance / 135
Relationship with the senior generation / 89
Family council / 137
x ✱ Family businesses Contents ✱ xi
Other governance entities / 139 Splitting the company / 188

Roles and membership / 143 Conditions attaching to ownership / 188
Getting the structure working / 144 Isolating voting control / 189
Conclusions /145 Implementing the estate plan / 191
Trusts and their uses / 191
8 Managing succession: the leadership challenge 146 The benefits of life insurance / 195
Conclusions on estate planning / 195
The succession paradox / 147
Resistance to succession planning / 149
The founder / 151 10 Wealth management: family offices and philanthropy 196
The family / 152 The family office / 196
Employee and environmental factors / 152 Roles / 196
Leading the transition / 153 Structures / 197
Start planning early / 154 Evaluating MFOs / 200
Encourage intergenerational teamwork / 155 Family business philanthropy / 200
Develop a written plan / 157 Organising giving / 202
Involve everyone and obtain outside help / 158
Establish a training process / 159 11 Summary 204
Plan for retirement / 159
Decide when to retire and stick to it / 159 Notes / 216
Selecting the right successor / 161 Index / 225
Who to choose? / 162
What if no one fits the bill? / 164
Some conclusions on selecting a successor / 166
Preparing next-generation managers and leaders / 167
In-house training and development / 168
The next generation’s perspective / 169
Succession in older family businesses / 170
Second to third generation / 170
Third to fourth generation and beyond / 171
New generation, new system, new culture / 172
9 Building financial security and relinquishing control 175

Building financial security / 176
Money into or out of the business? / 177
Selling the business / 178
A hard decision / 178
Sale mechanics / 179
Principal exit options / 180
Passing down the business / 182
Capturing values for later generations / 183
Estate-planning principles / 185
Treating heirs fairly / 185
Ownership and control considerations / 187
Life insurance / 188
Foreword ✱ xiii
professional experience. Perhaps this should be the subject of Peter’s next

book.
Foreword The importance and contribution of family businesses to our society
and economy is increasingly being recognised, particularly since the global
Roger Pedder financial crisis of 2008, which occurred since the first printing of this
book. Family companies do not suffer the dislocation between ownership
and management that is a feature of the quoted sector, and most notably
in publicly quoted banks. They manage their affairs on a prudent financial
basis, since the family business is often the family’s main store of wealth
F
and source of income. They seldom indulge in reckless borrowing, and are
or those interested in family business this is a must-read thus able to avoid the worst effects of a financial crisis. Their longer-term
book – not a prescriptive manual, more a dramatised docu- view and short-term flexible management practices are also able to steer
mentary. Here is the proper distillation of experience that the business through the subsequent recession. Such I believe has been
Peter Leach has gleaned over 30 years of advising family companies. It is the recent experience of family businesses, where very few of the more
also a work of scholarship. established companies have fallen into bankruptcy.
I am impressed by the understanding that every family business It is not a surprise then that so many questions are being raised as to
situation is different. Nevertheless, a well-considered interpretation of why family and unquoted companies are more stable and durable over
the established principles of good family management is essential for time than their public counterparts. So Peter’s insights and sound recom-
any family business. My experience of working in a major family-owned mendations appear again at a propitious time. My hope is that now a
company for over 40 years, and chairing it for 13 of those years, echoes wider audience will take note and act on them.
Peter’s insightful analysis. If, when I was learning, he had been writing
about how to conduct a major family enterprise, I would have had a Roger Pedder
reliable text to guide me on issues which, frankly, I had to address on Chairman, C. & J. Clark (Clarks Shoes), 1993–2006
a trial-and-error basis. It would have saved me and the family time and May 2011
anxiety.
Much modern management writing is full of jargon, takes a unifocal
point of view and is presented as a panacea for all management ills. It is
a pleasure to read a book that is written in plain language, is well ordered
and is not dogmatic. Any family member of any family business will find
something relevant which, if they think about it, will improve not only
their understanding of the enterprise and their relationship to it, but also
how they can help and improve the conduct of the enterprise itself.
Family members in a family business often suffer emotional pain and
anguish. They may be neglected and even abused by both family owners
and non-family managers, and their lives may be blighted by insensitive
or hostile treatment. Active understanding and implementation of Peter’s
advice on the treatment of family members in family businesses should
ameliorate the worst aspects of the problem, but it remains the dark side
of the family business experience. Family members are often trapped in
a frustrating or demeaning situation, because moving on from a family
business without any external experience is difficult. Our management
culture seldom recognises family company management as valid and
Preface ✱ xv
shadow Davis on his assignments advising major US family businesses,

and I also attended many family business seminars and conferences,
Preface which, by the late 1980s, were becoming increasingly popular across the
country. Witnessing all this interest and enthusiasm, I decided to organise
some activities and events in the UK.
The first step was to commission two studies, supervised by the
London Business School, designed to review and quantify family business
activity.1 These included the key finding that 76 per cent of UK busi-
nesses are family controlled. Next I wrote the first edition of Guide to the
T
Family Business (a forerunner of the current book), which was published
his is a very personal book. It has grown out of my years in March 1991, and invited Peter Davis to help launch various UK projects
observing, advising and learning lessons from some of – he was the keynote speaker at a series of sell-out seminars (organised in
the world’s most successful family-owned businesses and conjunction with venture capital group 3i) that took place around the
business-owning families. Also, the book in a sense records my personal country. Family business people at these seminars spoke of a new sense
journey through a period of remarkable change, beginning in an era (the of belonging, based on the realisation (for many, a true ‘eureka’ moment)
late 1970s) when family companies were largely seen as quaint anachro- that what they were experiencing was not unique to them, and that all
nisms of bygone times, and misunderstood as inefficient drags on entrepre- family businesses faced and shared the same sorts of systemic tensions,
neurialism by dint of their under-investment and parochial management challenges and advantages.
style. I feel privileged to have witnessed and to have participated in the It rapidly became clear that taking a fresh look at family businesses was
transformation that has taken place in this viewpoint. Today, we appre- an idea whose time had come, and via a series of initiatives – seminars,
ciate the strengths of family enterprises and their immense contribu- conferences, lobby groups, newsletters and other specialist publications
tion to the world economy, and find ourselves in a new era when family – a stir was created that quickly took shape as the first attempt to do
business has become an enlightening and exciting area of interest among some joined-up thinking in the UK about family systems theory, family
researchers, theorists, advisers, policymakers and legislators. psychology and family business.
My fascination with family businesses took hold some 30 years ago. From
the early 1980s, as a partner with accountants Stoy Hayward (now known
as BDO), I worked with owner-managed businesses and some older family
A quiet revolution
companies in the UK. I noticed the way that business and family overlap Some 20 years have elapsed since these events, and over that period the
and depend upon each other in these firms, and I kept seeing the same family business community has become firmly established in the UK and
issues cropping up – dads unwilling to think about the future and succes- Europe as an independent, dynamic and increasingly well-researched
sion; brothers finding it hard to work together; and so on. But at that time study discipline. Prestigious academic journals across a wide spectrum –
no one in the UK had really studied what makes family businesses special. management, law, economics and the behavioural sciences – now regularly
In contrast, on my travels in the USA (from the mid-1980s onwards) I saw publish articles exploring the unique challenges and advantages of family
the way that conceptual thinking about family companies was taking hold businesses. At the same time, family business educational programmes
among both advisers and family business people, spurred on by focused at universities and business schools have grown significantly – including
academic research into the unique issues faced by these companies. specialist courses for family members – while the value of family business
Influential figures working on researching and analysing family busi- consulting too is now coming to be fully recognised. This is not consulting
nesses in the USA at the time included Peter Davis (then at Wharton in the traditional sense of client-visiting, fact-gathering and report-
Applied Research Center), Ivan Lansberg (at Yale School of Organisation writing. Family business advising and consulting offers families expert
and Management) and Harry Levinson (at Harvard), with more practical facilitation, trust-building, support and guidance services that empower
input from established consultants like Benjamin Benson and Léon Danco. family members, helping them arrive at their own solutions and their own
During my US visits I was fortunate enough to have the opportunity to consensus as to the best way forward.
xvi ✱ Family businesses Preface ✱ xvii
Reflecting these developments, and the raised profile of the sector,

A Phrase Book and some golden rules
family-owned businesses themselves have become much more knowledge- During my career I have come to understand that a key aspect of an
able and sophisticated – much more willing to embrace a fresh outlook adviser’s role is finding out what is really happening both within the
and policies that start to counter some of their in-built disadvantages. For family and at the company. Plagued by selective amnesia, procrastination,
example, 20 years ago the hallmark of most family firms I encountered paranoia and a few other syndromes, family businesses are generally very
was their unstructured (often chaotic) approach to decision-making and good at concealing what is actually going on. I have developed a number
organisation, but it is noticeable that family firms today for the most part of techniques to help me (and the family) get at the truth, including
have adopted what could be termed a ‘structured but flexible’ model, with compiling my own Family Business Phrase Book. Some examples of transla-
much more thought being given to building family and corporate govern- tions from ‘what is said’ into ‘what is actually meant’ will serve to give
ance, accountability and more efficient decision-making processes. the flavour of the phrase book and of many of the scenarios discussed in
Similarly, it used to be rather unusual to find female family members this book:
employed in the family business, but today it is much more common.
Also, favouring the eldest son in family business succession now tends Q On a pay package for the kids – ‘I know it’s less than the going rate
to be regarded as an historical anachronism, with attention quite rightly but we can’t be seen to be overpaying family’ translates to ‘You’re
focusing instead on competence. At the same time, equal remuneration going to own the business someday, and a bit of hardship along the
of family members is giving way to merit-based reward systems; secrecy way will help remind you of the fact and keep you in line.’
is giving way to more openness; and family business values, rather than
Q Reasons for joining – ‘I mainly joined the business to continue the
being assumed (‘We’ve always done it this way’) are more likely to be
family traditions’ equals ‘I can’t really explain why I joined, and now
embraced, with families making special efforts to define and articulate
I’m not quite sure what my long-term plans are.’
their values in the belief that values, vision and culture can make their
businesses more special, competitive, resilient and sustainable. Q Succession – ‘Someday, all this will be yours’ equals ‘I really don’t
Encouraging as these trends are, they should not disguise the fact that know what’s going to happen and I want to keep my options open.’
a great many family businesses still face huge challenges coping with the
dangerous overlaps between family and business systems, and a daunting Some important lessons I have learned – courtesy of the many families
list of consequential issues: organising responsible family ownership; who have generously shared with me their setbacks and successes – are
working productively with non-family members; developing the next summarised in the following golden rules:
generation (and future leaders); creating policies to manage the roles,
remuneration and rivalries of family members; implementing successful Q The key questions family members must address are ‘What do we
generational transitions; and upgrading family and business governance. want to achieve by being in business together?’ and ‘What do we
So the family business adviser’s job is far from over – especially as there is hold dear to our hearts in terms of values and our vision for the
no obvious sign of improvement in the key mortality statistics for family future?’ When families are able to come up with a clear consensus on
firms that fail to make it to the next generation. Another challenge is answers to these fundamental questions, normally everything else
the trend towards more family businesses being run by groups of siblings will drop into place.
rather than by a single leader.2 Team leadership is not a problematical
Q The issues that present themselves in family businesses can almost
concept in itself – and in family companies there may be compelling
always be divided into three categories: (a) personality – such and
reasons to combine two or more people in leadership – but it remains
such a person is impossible, unreasonable, illogical, irrational;
true that we have only limited experience of how to make this team-based
(b) structural – something is malfunctioning in the structure of how
family business model work well.
the family relates to the business; and (c) business – the business may
be going downhill and nobody is quite sure whether commercial
or family factors are causing the underperformance. In the great
majority of cases, the real challenge facing the company is found to
xviii ✱ Family businesses Preface ✱ xix
lie within the second category (structural), even though the case is and sometimes on the brink of failure. The chances of success for a family
presented as concerning the first (personality) or the third (business). business are greatly increased by ensuring that the major, life-threatening
questions are tackled at an early stage and plans are developed for the
Q Linked to the previous point, because structural issues in family
future. In the same way that the company’s commercial activities and
businesses are to a large extent predictable, such businesses enjoy
opportunities must be continually examined and evaluated, the develop-
a special advantage relative to their non-family competitors – they
ment of its relationship with the family needs to be constantly assessed,
have the opportunity to solve tomorrow’s predictable problems
managed and reviewed.
today. In other words, they can effectively resolve such problems
Family business owners and managers often fail to consider these
before they arise. For instance, the development and mentoring of
crucial issues in sufficient detail. Too involved with the day-to-day activ
next-generation leadership can be planned in detail ahead of time,
ities of their company, they put off getting to grips with them until a
in a calm atmosphere, under an agreed process, thus reducing the
later date. Reluctance to face the problems and to take external profes-
potentially disastrous impact of unexpected yet predictable events.
sional advice often stems from family business leaders’ inability to gain
Q The money that people are paid in a family business is often a knowledge (and in some cases self-knowledge) concerning the systems-
tell-tale sign as to what is really going on. For instance, if the next based and psychological forces that are at work. How, for example, have
generation is wildly overpaid for the job they are doing, stakeholders others tackled the problems and with what consequences for the firm?
will not respect them because they will see their pay package as a What might happen if the issue is ignored – will it go away or will a major
special perk attaching to family status. Similarly, if they are grossly crisis arise?
underpaid, stakeholders will conclude they do not have the respect This is not a how-to book for family businesses. Indeed, there can be
of their family and are unlikely ever to take over. no such thing because each family business is different, and there are
really no success and longevity rules that can be applied from firm to firm
Q Lastly, when family business people find themselves making business
without serious qualification and adaptation. Instead, what are proposed
decisions for family reasons, all sorts of alarm bells should start
in the pages that follow are broad frameworks, principles, processes and
ringing.
mindsets to help shape problem-solving perspectives, as well as some tools
and working guidelines designed to contribute to the efforts of family
businesses to achieve long-term continuity, growth and prosperity.
Objectives for this book
Family firms face complex dilemmas that affect not only the destiny of
the business, but also the destinies of owners, their families and their
Structure and organisation
employees. How do owners reconcile their own and their family’s aspira- First, an explanatory note about my approach to and treatment of the
tions with the commercial goals of the firm? Can they motivate family subject. The need to discuss family businesses in a coherent fashion has
and non-family employees alike? Should they try to solve problems them- meant that the book structure in many ways reflects the development
selves or take independent advice? There is the major issue of who is to and life cycles of family businesses themselves – that is, a progression
succeed to management and ownership control – when should planning from straightforward owner-manager beginnings through to third-genera-
for succession begin and who to choose? Other concerns include whether tion and multigenerational family companies; from clear-cut simplicity
to sell out, raise external finance, diversify, de-merge, bring in more family through to significant complexity. The book (and to an extent each
members or more outside management, and so on. chapter within it) reflects this evolutionary process, starting with personal,
All these dilemmas affect most family businesses sooner or later – that hands-on management and governance, which then benefits from inte-
is, to a greater or lesser extent they are all predictable – and the aim of grating outside expertise. Next, family membership becomes broader
this book is to help family business people approach them in the right and more inclusive, although family activity in management becomes
way and arrive at the right decisions. Depressingly, in many cases, by the more restricted based on objective competence. Finally, management and
time the problems associated with the issues arise it is too late to take ownership succession become more planned.
action and the business is well down the road to distress and upheaval, On occasions, the need to progress through the subject in this way
xx ✱ Family businesses Preface ✱ xxi
has required that certain topics be introduced and explained in one part tures that help the family develop a cohesive approach to the business and
of the book and then re-examined in a different context in another part. provide organisational focus and accountability.
For example, most family businesses benefit from having what is called Chapter 4 discusses the next generation – to join or not to join the
a family council, the principal role of which is to ensure that the values, business, the importance of outside experience, and issues surrounding
vision and aspirations of the family and the business are aligned. But a relationships with the senior generation. It goes on to highlight how
family council in a small-scale second-generation business (the sort of conflicts arising between the family, business and ownership systems are
firm discussed in Chapter 3, where family councils are first introduced) particularly acute and troublesome in relation to human resource manage-
bears only passing similarity to that same body at work within a sixth- ment practices. Clear and explicit management criteria must be drawn up
generation, multifamily business with hundreds of shareholding cousins relating to personnel issues and family members. Guidelines designed to
(so, in the light of this, we revisit family councils again in Chapter 7, help control and manage the contradictory forces are proposed. Family
which is devoted to the special factors affecting these more mature employees should be rewarded and promoted in line with their contribu-
businesses). tion to the business; their performance should be evaluated regularly and
The book is divided into ten chapters. Chapter 1 represents a broad- objectively within a system that applies to all staff.
based introduction, covering the economic importance of family busi- Family businesses have a dangerous tendency to introversion that needs
nesses, what factors make them special, and the dilemmas and challenges to be countered by the effective use of external talent. Chapter 5 discusses
they need to overcome. Attempts via research to test whether these advan- making the most of outside resources under three headings: employees,
tages and disadvantages have a measurable impact on commercial perform- non-executive directors and advisers. Family companies must endeavour
ance are reviewed. Although family firms are to be found in every sector of to attract and motivate high-quality, non-family employees and (under
commercial activity, their special strengths mean that they flourish best in carefully designed incentive schemes) reward their contribution. Non-
fields in which their advantages can be fully exploited. These sectors are executive directors can be especially valuable to family-owned companies,
examined, together with supporting cases and examples. providing seasoned guidance, specialised expertise and networking
The special status of family businesses, introduced in Chapter 1, derives connections. Lastly, skilled family business advisers and consultants are
from their structural form. This structure is characterised by complexity able to probe difficult family business issues and develop discussion of a
– a family system, a business system and an ownership system linked family’s problem areas in a subtle and sensitive way that minimises the
together through wealth, legal arrangements, employment relationships possibility of friction and confrontation. Their selection should be based
and emotional/relational bonds. Understanding the interaction of these on competence and their performance periodically reviewed. Possible
systems is crucial to understanding family business dynamics, and this is conflicts of interest need to be thought about and avoided.
the central topic in Chapter 2. The other feature that makes family busi- The role of the board of directors in the governance structure of a
nesses special is the people who are involved in them; the background family-controlled company – the topic addressed in Chapter 6 – is critic
and perspectives of each of the major participants are examined. The ally important. Establishing a board that includes independent outsiders
chapter also introduces some of the main causes of conflict that can arise is probably crucial for the vast majority of family businesses if they are
– particularly father–son conflict and sibling rivalry. to achieve long-term success. Such a board brings objectivity and experi-
Families learn to build a shared vision by aligning individual and ence to operational and policy deliberations, and imposes important disci-
family values and goals, and that vision becomes a guide for planning, plines. When a family introduces board diversity it sends a positive and
decision-making and action. A good starting point is the simple question: motivating message to customers, shareholders and employees. In larger,
‘What’s our business for?’ Developing a consensus on this most basic of more mature family companies there is a balance to be struck between
questions helps families improve their chances of success when they move the interests of the family as owners of the business and the managers
on to establishing ground rules for their relationship with the business entrusted to run it. No single model works for all, and, instead, a solid set
(the main subject matter in Chapter 3) and in defining the responsibilities of principles and processes must be drawn up and applied in the unique
of family members. The aim is to formulate and adopt policies that strike a circumstances of each company.
good balance between the best interests of the business and the well-being Chapter 7 is devoted to family governance in multigenerational family
of the family, and then to design and establish effective governance struc- firms. By the time a family business reaches the third generation there
xxii ✱ Family businesses Preface ✱ xxiii
may be several dozen or more family members who have some sort of fully negotiated if business owners are retiring to a new life of interesting
stake in it. Ownership is generally in the hands of many cousins from activities, rather than from their old one, which implies that their useful
different sibling branches of the family, with no single branch having a and productive days are over. So, at the risk of repetition, the idea of
controlling shareholding. Some of these owners will work in the business, leaders severing their connection with the family business is neither
but probably most will not. There is significant potential for friction and desirable nor possible because the business is part of the fabric of the
dysfunctional behaviour if the large-scale complexity arising with these family. Family business leaders must think, therefore, about how best to
family and shareholder groups is not controlled and managed. Govern- reshape their attachment to the business and to plan their future work
ance architecture must be tailored to meet the unique needs and circum- activities, while readers of this book are asked to reject dictionary negat
stances of particular families. ivity and to construe the words retire and retirement in the constructive
A well-structured and systematic approach to succession planning is sense described here.
required to overcome all the forces that favour doing nothing. Chapter 8 Chapter 9 starts from the premise that building financial security is
explains why preparation and planning for succession are so difficult and an important element in preparing for a successful ‘retirement’. This can
important, analyses the options, and aims to provide practical guidelines be achieved either inside or outside the family business, or, if there are
on ensuring that transitions are accomplished as smoothly and as advant no viable succession options, by selling it, and various sale structures
ageously as possible. Whether the transition is from a single owner to a are examined. Insurance and share purchase agreements can be used to
sibling partnership, or from a sibling partnership to a cousin company, an resolve many of the complications arising from multifamily ownership of
important point is that it is not just changing the guard – it is more like a a business. When passing the family company on to the next generation,
system change, a transition to a different type of business structure with a continuity of the business, liquidity and family needs are the cornerstones
different culture, different procedures and different ground rules. of estate planning. Ensuring ownership ends up in the right hands in
The words ‘retire’ and ‘retirement’ crop up a lot in this (and the next) the next generation may require treating heirs differently depending on
chapter, and I should explain here that I have trouble with these words. whether or not they are active in the business. Ways of passing on voting
My problem is based partly on current dictionary definitions – which control to selected heirs are examined, as are the uses of trusts.
centre on concepts like withdrawing from work/business, retreating and Finally, once larger family businesses have established the family
becoming a recluse, and singularly fail to define and explain retirement governance structures and mechanisms they need to manage complexity
as it is understood today – and partly on confusion about the concept of and the relationship between family and business, they often look for
retirement at a time when most people in their 50s and 60s are healthier other ways to help foster their family commitment and vision and to
and more vigorous than previous generations. But my main difficulty perpetuate their family’s legacy. Opportunities to achieve these objectives
concerns the fact that family business leaders do not retire, and never can be provided by the family office and philanthropic initiatives, and
have done! Where families are in business together it does not matter these subjects are examined in Chapter 10.
whether leaders receive a monthly salary or indeed whether they ever
cross the threshold – their name is above the door and they will always Peter Leach
be attached to their family and the business.3 What retirement means for May 2011
these people is not withdrawing from the business, but reorganising and
reshaping their attachment to it.
Family business leaders remain an important resource to the family
firm, even when they have passed on day-to-day operational responsibility
to their successors. Many leaders, as part of their succession plan, assume
new roles in the company, such as managing special projects, acting as
roving ambassadors for the firm and/or helping to foster management
continuity by connecting new managers with individuals and organisa-
tions that may be important to the future success of the company. Experts
are more or less unanimous that this phase is most likely to be success-
Acknowledgements 1
Why family businesses are
special
M
y day-to-day work as a family business consultant
has brought me into contact with many fascinating
business families over the years. It has been a pleasure
and an honour advising and learning from these families, and I would
F
like to take this opportunity to thank them for their willingness to let
me share their experiences, problems and successes, especially those who amily businesses comprise the predominant form of enter-
have permitted me to refer to them by name in this book. prise around the world, yet, until recently, little informa-
In addition, I have had the privilege to work with inspiring people tion or guidance has been available on the unique and
from other cultures, and would like to thank in particular Prasad Kumar complex issues they face. This is because it is only in the past 30 years
from Bangalore and Tatwamasi Dixit from Chennai for the insights I have that we have started to study and understand two fundamental ideas: that
learned from them when working in India. family businesses differ in a variety of critically important ways from non-
Special thanks go to my former colleague Juliette Johnson, who over family businesses; and that business families function quite differently
the years has worked with me on many complex family business consul- from non-business families. These two distinctions lie at the heart of this
tancy assignments, some of which are referred to in this book. book and, if a family business is to achieve its full potential, it is essential
Last, but by no means least, I gratefully acknowledge the contribu- that its management understands them and the challenges they create.
tion of my wife Antonia. Her advice, enthusiasm and patience during the As well as making the right decisions on the commercial problems that
preparation of this book has been invaluable. beset all enterprises, family business people have to be able to analyse the
special dynamics that surround their businesses and their families. They
P.L. need to develop special skills that enable them to identify and manage
the unique difficulties and dilemmas that these dynamics introduce, and
to adopt constructive strategies to foster growth of the business and the
transfer of power and control within it.
So understanding the characteristics that distinguish family and non-
family businesses and entrepreneurial and ‘normal’ families is the first
step, and highlighting these distinctions is the main aim of Chapters 1
and 2. However, it should not be concluded from this that there are any
general panaceas: every family business is idiosyncratic, shaped by its
own set of distinctive personalities, their concerns, objectives and rela-
tionships, and by a host of other personal and commercial characteristics.
But there are some common patterns of experience, and developing an
appreciation of them is important so we can avoid repeating everyone
else’s mistakes.
2 ✱ Family businesses Why family businesses are special ✱ 3
Definitions
Before introducing some of the characteristic strengths and weaknesses
of family businesses, and commercial sectors in which they have proved
especially successful, it is important to propose a working definition of
what is meant by a family business. Criteria that are too rigid should be
avoided – just looking at share ownership or management composition
often leads to an inadequate picture and the wrong conclusions. In this
book, therefore, a family business is one that, quite simply, is influenced
by a family or by a family relationship, and that perceives itself to be a
family business.
In the clearest example, the family as a body may effectively control
business operations because it owns more than 50 per cent of the voting
shares, or because family members fill a significant number of the top
management positions. But there are also less obvious cases where a firm’s
operations are affected by a family relationship – enterprises in which the
relationships of father and son, brother and sister, in-laws, cousins and so
on have an important impact on the future of the business.
Note also that for larger, more mature family businesses where the Irrational and inappropriate patterns of emotional behaviour can emerge in family
number of shareholders may have multiplied down the generations, or businesses
where the business has obtained a stock exchange listing, effective family
voting control can be maintained with significantly less than 50 per cent generally acknowledged in developed markets, particularly the USA,
of the shares. Germany and Italy.3 In the UK, family firms are the dominant form of
ownership of companies in the private sector, accounting for around
two-thirds of all enterprises and half of the output of the private-sector
Economic impact economy, and they employ about half the workforce. The constituency
A great many books and research studies try to provide educated guesses where they are best represented is the small business sector. According to
of the proportion of business enterprises worldwide that are family research published by Barclays Bank, around 60 per cent of UK firms with
controlled, and the figures vary a lot. Data shortages, different definitions turnover of £5 million or less are owned or managed by related family
of family control and other statistical issues make this a tricky area, but members.4 The same survey records that, across England and Wales,
even the most conservative estimates place the proportion at between 65 such family businesses are most prominent in the north-west of England
per cent and 80 per cent.1 and East Anglia, with around three-quarters of all businesses owned and
It is fair to say that many of these enterprises are small-scale sole managed by the family. By contrast, in London, family businesses account
proprietorships that will never grow and be passed down the generations, for less than half of the business population.
but it is also true that the figure includes some of the world’s largest and Moving up the size scale, family firms are also a common form of
most successful companies. John Ward, a professor of family business at ownership within the small and medium-sized enterprise (SME) sector,
IMD, Switzerland, and clinical professor at Kellogg School of Management but this is one of the areas where detailed statistics are in short supply.
in the US, has calculated that approximately one-third of the 1,000 largest More data are available on both large private firms and the quoted
companies in the world are controlled by families and, of these, half are sector. Indeed, family firms comprise over one-third of the UK’s biggest
traded publicly and half are privately held.2 private firms listed in The Sunday Times Top Track 100 survey.5 In the
Family enterprises dominate commercial life in the emerging markets stock market quoted sector, 6 per cent of the companies in the FTSE All
of Asia and Latin America and, many believe, play a larger role than is Share Index are family businesses, but the UK stands out in terms of
international comparison, with the smallest percentage of listed family The family’s value system may need to be reinterpreted and revitalised
companies relative to the quoted sector overall. In contrast, around half by succeeding generations. Each new generation of the Rockefeller clan,
the companies quoted on the French stock market have a significant level for example, re-examines the family’s core ideals and values, redefining
of family ownership.6 and renewing them as is felt appropriate to help reinvigorate the sense of
connection between family members and the organisational mission.
Special strengths
Predictable problem resolution
The overriding characteristic that distinguishes most family businesses is
a unique atmosphere that creates a sense of belonging and an enhanced The next special strength of family firms is the unique opportunity they
common purpose among the workforce. Sir Terry Leahy, chief executive of give to the people owning and running them to resolve a range of predict-
Tesco, has neatly encapsulated some of the factors underpinning this:7 able issues before they become serious problems.
The world’s most successful entrepreneurs sometimes seem to be
In family firms … ownership and management are in the same hands, blessed with 20/20 foresight. Their insight into what the future holds
so they tend to have a far longer time horizon. … As a result, they enables them to deliver commercial solutions that take advantage of this
do not have to float with the tide of market sentiment. They can be
prescience, and that is how fortunes are made. This, of course, is difficult
braver about what they do and say. They can dare to be quirky. Or
to achieve, but in a family business it is always possible to resolve a range
they can dare to be traditional. They can stick to the long-term values
established over many years, building up loyalty and trust in their of tomorrow’s problems simply because, for the most part, they can be
customers and staff. A good illustration of that is the language they identified in advance.
tend to use to describe their values. A family-owned business will use Time and again, three types of issues present themselves in family
words such as courage, loyalty or authenticity to capture what they businesses: personality – such and such a person is impossible, unreason-
stand for. In a public company you are more likely to find management able, illogical, irrational; structural – something is malfunctioning in the
speak – words such as efficiency, innovation and added value. structure of how the family relates to the business which undermines
family dynamics and decision-making; business – the business may be
going downhill and nobody is quite sure whether commercial or family
Family business culture and values
factors are causing the underperformance. In the great majority of cases,
These issues relating to long-term values and vision will resurface in a however, the real issue affecting the company is found to lie within
variety of guises throughout this book. Families who are able to define the second category (structural), even though the case is presented as
and articulate their shared goals, and the guiding values and principles concerning the first (personality) or the third (business problems). Herein
that will help achieve them, give their businesses a strong foundation for lies the key: because structural issues are to a large extent predictable in
long-term competitive advantage and sustainability. family businesses, they have the opportunity, not enjoyed in other busi-
A family business can be seen as the external manifestation of a nesses, to effectively resolve these problems before they arise.
family’s value system. Put simply, values, or rules for living, underpin a Succession provides a classic example. Rather than waiting till the
code of behaviour that builds and supports family vision and business reading of the will to resolve questions like ‘Who gets the shares?’ or
mission. Typically, it is the founder who articulates the mission he or she ‘Who is best suited to take on managerial leadership?’, in a family business
sees for the business, but these values – sometimes called lived rather than it is possible to address such issues ahead of time, in a calm atmosphere,
espoused values – transmit down through succeeding generations, often under an agreed process, thus reducing the potentially damaging impact
without the family even recognising that this is occurring. A common of unexpected yet predictable events.
way of behaving is created, which helps to explain and reinforce what the
family stands for and why they are in business together. During periods of
Commitment
challenge and transition their business is supported by the belief in a set
of shared values, but where there is no relevant vision to unite the family, People who set up a business can become passionate about it – it is their
opportunities for conflict can arise. creation, they nurtured it and built it up, and for many such entrepreneurs
their business is their life. This strong bond translates naturally into dedi- profitably for decades. Some of Britain’s wealthiest families do not have
cation and commitment, which extends to all the family members who any ready money because their company, often established generations
come to have a stake in the success of the business. They feel they have a ago, has hardly ever paid a dividend. All its profits have been reinvested
family responsibility to pull together and, provided there are no conflicts, to finance future growth.
everyone is happy to put in far more time and energy working for the Flexibility in time, work and money once again creates a competitive
company’s success than they would dream of devoting to a normal job. advantage for family businesses. Generally, they can adapt quickly and
Family enthusiasm develops added commitment and loyalty from their easily to changing circumstances. If, for example, the firm needs to switch
workforces – people care more and feel they are part of a team, all contrib- into a new product to capitalise on a developing trend in the market-
uting to the common purpose. place, the decision will rarely involve lengthy discussion by a hierarchy
of committees and its implementation will be equally speedy: ‘We are
going to stop doing this, start doing that, and the move will mean we
Knowledge
have to put in six months of extra hard work and not take any money
Family businesses often have particular ways of doing things. They may out of the business for the next two years.’ This would be a tall order for
have special technological or commercial know-how not possessed by many companies, impossible for others, but a typical, flexible agenda for
their competitors; knowledge that would soon become general in a normal a lot of family firms.
commercial environment, but which can be coveted and protected within
the family.
Long-range thinking
This idea of knowledge is also relevant in relation to the founder’s sons
or daughters joining the business. The next generation grow up learning Family businesses are better than other enterprises at thinking long term
about the business, infected by the founder’s enthusiasm, and when the – the next generation is often a higher priority than the next quarter’s
time comes for them to consider joining they may already have a deep financial results. They generally have an instinctive preference for patient
understanding of what the business is all about. capital (leaving the investment intact for the long term in the hope of
better rewards than the short term could offer). Strategic planning reduces
risk, enabling a business to cope more effectively with unforeseen events,
Flexibility in work, time and money
and is also the hallmark of a great many successful new ventures and
Essentially this boils down to putting the necessary work and time into of long-term survivors. The fact that families usually have a clear view
the business and taking out money when it can be afforded. A further of their commercial objectives over the next 10–15 years can therefore
aspect of commitment is that if work needs to be done and time needs to represent a considerable advantage.
be spent in developing the business, the family puts in the time and does Energy services group Hunting provides a case in point, with the
the work – there is no negotiating of overtime rates or special bonuses for company tracing its origins back five generations to the last quarter of
a rushed job. the 19th century. Charles Samuel Hunting entered the oil business in
The same flexibility applies to money, and here is another important the 1890s, but he was already expanding on a successful ship-owning
distinction between entrepreneurial and non-business families. Most company set up by his father in 1874. Today the group is chaired by
families have a set income derived from wages or salaries paid by an Richard Hunting, who is a firm believer in taking the long-term view.
employer and the only decisions they take concern how this income is to ‘People aren’t constantly looking over their shoulder in case we will
be spent. But for families in business, income is not a fixed element in the be bought,’ he says, citing 130 years of trading history and experience.
domestic equation: they must decide how much money they can safely take ‘During that time the business has been through many cycles, so one
from the business for their own needs while at the same time preserving doesn’t panic when one hits another. We don’t assume that when we are
the firm’s financial flexibility and scope for investment. Sometimes one in an upswing it is necessarily going to last.’8
aspect of commitment to the family business takes the form of dismay An interesting contrast between the family preference for patient
at the idea of removing money from it – draining the business of its life- capital and stock market expectations has been highlighted by recent
blood can be how the family sees it, even if the business has been trading developments at troubled US car giant Ford. The company’s North
American unit made a $2.9 billion loss in the first three months of as have the company’s procedural ethics and working practices. Everybody
2006 as it implemented plans to cut 30,000 jobs and close 14 plants knows how things are done.
by 2012 to reduce costs. By mid-2006, Ford’s shares had lost more than Exemplifying stability and continuity, Christopher Oughtred is the fifth-
half their value since the founder’s great grandson, William Clay Ford generation chairman of Hull-based food manufacturer William Jackson &
Jr, took over as CEO in 2002, and the non-family shareholders (Ford Son, established in 1851. The company’s products include frozen foods
is an NYSE-listed company) were beginning to lose patience. Holders under the Aunt Bessie brand name, chilled ready meals for Kwok Foods
of Ford’s Class B stock, however, have a different agenda (various Ford and bread for many of Europe’s sandwich-makers. It remains a private,
heirs control 40 per cent of the company’s voting shares, and each family-owned business. With generation six comprising 19 individuals,
of them has 16 votes per share compared with one vote per share for the fifth generation currently running the business is taking a proactive
the other shareholders); they operate on the assumption that wealth stance on family governance issues to help ensure the sustainability of
is being created for the long term, not quarter by quarter. Craig E. the company. However, the family members are also very conscious of
Aronoff, an American family business consultant, has summed up the their history, regarding themselves as custodians of the firm’s culture,
perspective disparity:9 ownership and management. As Oughtred explains:11
The family has been through up and down cycles over the last 100 We are proud of something which William Jackson’s has that few of
years – they understand these things well. Most shareholders are just our competitors can copy or invent: namely a great heritage. Part
hoping their $6 stock will turn into a $10 stock, but because Ford of understanding where our business is today comes from knowing
is a public company and a family business, you’re seeing normal where we have come from. … Our task is to harness the efforts and
shareholder expectations and family views of expectations clash. But dedication of previous generations and to take our business forward
the family remain the dominant force at Ford, and they are going to so that an enviable, reputable and successful company may be
remain patient. available for a sixth generation.
But while family shareholders and family members working in the Like some of the other factors working in favour of family businesses,
business are good at thinking long term, they are not always so good however, a strong, stable culture can be a two-edged sword. A stable
at formalising their plans – writing them down, analysing the assump- business environment can become a dangerously introverted atmosphere
tions they are making, testing past results against earlier predictions. In in which the attitude is ‘We do it this way because we have always done
short, the strength means that the long-range thinking is there, while the it this way’, and nobody is thinking about change and looking to see
potential weakness is that this thinking is undisciplined. whether doing things differently might introduce more efficiency. So
stability in the family business is one of its unique and valuable assets,
but business owners need to think about whether a stable business culture
A stable culture
has become an obstacle to change and adaptability.
For a variety of reasons, successful family businesses are stable struc-
tures. They are generally durable, low-profile, profitable niche enterprises
Speedy decisions
that shun publicity – the types of firms that Hermann Simon describes
as ‘hidden champions’. In his book of the same name, he characterises In a well-managed family-controlled business, responsibilities are usually
these companies as taking a long-haul view of their business; focusing on clearly defined and the decision-making process deliberately restricted to
narrow markets; retaining long-term stable partnerships with employees, one or two trusted individuals. In many cases this means that such firms
customers and suppliers; and emphasising value, not price.10 have an advantage over their competitors in that they are more nimble
The chairman or managing director has usually been around for many and, therefore, capable of making faster, better operational decisions (or, if
years. The key management personnel are all committed to the success necessary, of quickly adjusting or reversing previous decisions). However,
of the business, and they too are there for the long term. Relationships when it comes to other areas – for example, long-term change and transi-
within the company have usually had ample time to develop and stabilise, tion management – the speed and quality of decision-making can erode
significantly (see Dilemmas and challenges for family businesses on page of stature, so it’s still an everyday occurrence to meet a Cooper at
11). Coopers Brewery. Dr Tim Cooper is the Managing Director of Coopers
An interesting aspect of this decision-making issue has been the return Brewery and still keeps a keen eye on the brewing. Mr Glenn Cooper
is Executive Chairman and Marketing Director. Mr Bill Cooper
to the private sector of a number of high-profile family business companies.
remains on the Coopers board of directors, having retired from the
For example, Pentland Group (a sports and leisure apparel firm founded
position of Managing Director in February 2002. Maxwell Cooper
in 1932 by the Rubin family) returned to private, family company status retired from his Chairman’s position at the same time. Melanie
in 1999. Similarly, steel and engineering group Caparo, controlled by Cooper and Matthew Cooper also work at the Brewery in Financial
the Paul family, went private in 1991, buying back the public’s 20 per and Sales positions. Many other family members also keep an eye on
cent stake in the business. Although a wish to return to speedier and less things from the boardroom. So rest assured, Coopers Brewery is in the
bureaucratic decision-making processes was not the prime motivation, it hands of those who have the same values as Thomas Cooper and who
is clear from company management’s comments at the time that it was a believe in the product that Thomas himself began brewing all those
years ago.
significant contributory factor.
Reliability and pride Dilemmas and challenges for family businesses

Commitment and a stable culture are the basis of family businesses’ As well as having valuable advantages, family businesses are prone to
generally solid and reliable structures – and are perceived as such in the some serious and endemic problems. In the same way that family business
marketplace. Many customers prefer doing business with a firm that has strengths are not unique to family firms, neither are their challenges, but
been established for a long time, and they will have built up relation- family businesses are particularly vulnerable to these potential short-
ships with a management and staff that are not constantly changing jobs comings. Many of the problems hinge on the inherent conflicts that can
within the firm or being replaced by outsiders. What can be called the arise between family and business values (this crucial area is discussed in
‘My name is on the door’ factor, even when not trumpeted by the person Chapter 2).
concerned, often contributes to a competitive edge. Also, the commit-
ment within the family business, discussed earlier, is not just a hidden
Resistance to change
force – it reveals itself to customers all the time in the form of a friendlier,
more knowledgeable, more skilful and generally much higher standard of Walking through the doors of some family businesses can be like entering
service and customer care. a time tunnel. Sentiments such as ‘Things are done this way because Dad
Closely connected with reliability is the notion of pride: the people did them this way’ and ‘You can’t teach an old dog new tricks’ reflect
who run family businesses are generally extremely proud of the business the ways in which behaviour patterns can become ingrained and family
and of their achievement in having established and built it, and their businesses can become tradition-bound and unwilling to change. Many
staff are proud to be associated with the family and what they are doing. examples of this came to light in researching this book (see, for instance,
This pride, which in some circumstances can work to almost institution- the case highlighted under Modernising outdated skills on page 12).
alise the business, is often translated into a powerful marketing tool. For It is all too easy to find ourselves doing the same thing, in the same
example, Coopers Brewery in South Australia advertises its beers with the way, for too long, and in a family business it is easier still. This is because
slogan ‘Taste the difference that four generations of brewing tradition change not only carries with it the usual disruption and an array of
makes’. The following extract from its website powerfully illustrates the commercial risks, but it can also involve overturning philosophies and
marketing value that can be attached to family tradition:12 upsetting practices established by relatives.
‘We are now engaged in the brewery business.’ So wrote Thomas

Cooper to his brother John in England, after establishing his Business challenges
brewing business in the new colony of South Australia in 1862. …
The business challenges that particularly affect family firms fall into three
Today Coopers is Australia’s sole remaining family-owned brewery
categories.
Modernising outdated skills obviously have much more limited options when it comes to raising
Often the skills possessed by a family business are a product of history and, capital. But over and above this, family businesses commonly have a
as a result of developments in technology or a change in the marketplace, problem with the very concept of raising money from outside sources. This
they can quickly become obsolete. Problems in this area are not neces- occurs most frequently in relation to longer-term capital for significant
sarily triggered by drastic changes such as the effect of word-processing projects, such as opening a new plant or creating a new division of the
technology on typewriter manufacturers. They can also arise from subtle business, but it also shows itself in a reluctance to go to outsiders for bank
changes of emphasis in product manufacture or marketing that can be overdrafts or other short-term funding that would help the firm through
just as damaging if they catch an unresponsive, tradition-conscious family minor cash-flow shortfalls. If funding from the family’s own resources
business off balance. means skimping on important projects or inefficiently struggling through
A second-generation family metal-bashing business in north-east short-term crises, the healthy development and even the survival of the
England illustrates this well. Run by three brothers, the company was business can be threatened.
highly profitable, but everything was done manually – across a 200,000- The growth of private equity and a much more accommodating and
square-foot factory they employed a human army of metal-bashers, welders flexible approach to debt financing by banks do not alter the underlying
and finishers to make the company’s products. The brothers, now in their issue: behind these overcautious attitudes to external finance there are
60s, realised they had to make a choice: to continue with their traditional usually fears about loss of control – fears that will turn up in a variety of
production methods, or to upgrade their entire plant with state-of-the-art, guises and contexts throughout this book. The fear can take the form of a
robot-controlled technology. As one of the brothers explained: mild aversion to outsiders acquiring influence over how the business is run,
but – and more often – deep-seated and intense paranoia is the description
We see the logic when people talk to us about the need to modernise, that most readily springs to mind. On a day-to-day basis families tend not
but we’re making money here, and we’re doing it using methods and to want to be answerable to anybody for how they run their businesses
work practices that have been tried and tested across 50 years. Robots
and the idea of the family losing control is usually unthinkable. Family
would transform our business, but we’re worried they’ll transform it
business people can feel that control is inextricably linked to the love of
into something we won’t recognise or be able to control.
freedom and independence that has often been the principal driving force
behind the establishment of the business and its subsequent success.
Managing transitions
Succession
This represents another major challenge for family businesses and can
often make or break a family firm. A typical example in many companies The passage of a family business from one generation to the next, and
is that the founder is getting on in years and a son or daughter, the the change of leadership it involves, is a process that can be fraught with
heir apparent, is convinced that things need to be done differently. The difficulty.
merest hint of this potential conflict can be disruptive, causing uncer- When changing the managing director of any company, as well as
tainty among staff, suppliers and customers. In many cases the disruption the obvious managerial considerations, there is a set of emotional issues
becomes even more serious when the successor begins to introduce his or that have to be settled at the same time. For example, where there is a
her programme of radical change. So managing transitions is a difficult defined management hierarchy, decisions have to be made about people’s
challenge to the business and, because of the added dimension of possible competence to assume new responsibilities after promotion, and what
intra-family upset and conflict, it is a much bigger challenge for family their reaction will be if an outsider is brought in to take on the top
businesses than for others. job. Again, this is a situation where, on the face of it, family businesses
encounter identical problems to those experienced by other firms, but
underlying their problems is a minefield of psychological, family-related,
Raising capital emotionally charged dilemmas that transform the change of leadership
In comparison with the wide range of funding options open to publicly issue into one that can threaten the survival of the business.
held companies with a diversified shareholder base, family businesses Here is a real-life case example that illustrates the point. It does not
involve a world-famous family and it is not hugely dramatic, but it repre- which, in a commercial context, are deeply irrational and inappropriate:
sents a story that comes up all too often. The founder of an electrical the marketing director does not trust his brother, the finance director,
business had a flair for practical innovation and a real love of the business, because he used to steal his toys in the nursery – an extreme illustration
which he ran for 30 years, almost as an extension of himself. To customers perhaps, but indicative of the sort of emotional undercurrents that can be
and the workforce he was the business. He could not conceive of anyone at work. Making matters worse, the root of the trouble can lie many years
else being able to run it in his place. Then in his 60s, and still very much in the past: ‘Your side of the family swindled our side out of its shares in
in control of the company, he fell ill unexpectedly and died soon after. 1927.’
There was no natural successor. His two daughters had little involvement When competency yields second place to family needs, or business
in the business and his two sons (the youngest just out of university) felt decisions start to be made for family reasons, warning lights come on for
unprepared to take over. They had no experience at a senior management the family business.
level in the company, nor did they have a clear picture of how the business
worked. As a result the company was sold. If the founder had been able to
Leadership
plan for succession the result would have been very different.
Selecting a successor can often mean choosing between sons or One last difficulty for family businesses worth highlighting early on
daughters who, until now, have all been harbouring their own secret concerns leadership, or rather the lack of it, in situations where there is
ambitions of succeeding when the founder retires; and founders them- no one within the organisation empowered to take charge. This becomes
selves are often ambivalent about succession because they are worried especially critical when the business has reached the second generation,
about their children’s abilities and how to approach favouring one at the and even more so when it reaches the third.
expense of the others. But, more fundamentally as far as the business In the second-generation scenario, for example, the board of directors
is concerned, almost always the change is not simply a move from one may comprise three brothers, all of whom have inherited equal sharehold-
generation to the next – it is a revolution in which the culture of the ings, and none of whom has been empowered to take ultimate control
organisation is reconstructed by the next generation, who bring with them – no one has the last word. It is a common weakness among family busi-
new ideas about how the business should be run, how it is to develop, new nesses that there is great reluctance to allocate power. The situation where
working practices, new staff, new loyalties and so on. business founders are unwilling to plan for succession and choose, when
So succession represents a major transition, with the fortunes of the they eventually bow out, which of their children they want to do which
firm resting on how successfully it is negotiated (and this is why consid- jobs was discussed earlier. To a large degree, the predicament of the three
erable attention is devoted to succession planning later in the book – in brothers may be the founders’ fault, but for them it is too late to dwell on
particular in Chapters 4 and 8). this. It is the responsibility of each generation to resolve its own conflicts
so that it is able to empower and legitimise the next generation, and the
brothers must define where power lies between themselves before they
Emotional issues
can start to think about where it should lie in the future. If they do not,
The hazards of succession lead on to and are an aspect of the next family the arrival of the third generation with its increased cast of characters may
business pitfall: the emotional issues that limit the firm’s scope for commer- well herald catastrophe.
cial action. This will be discussed in a broader context and in more detail
in Chapter 2, but this is a good place to introduce the important idea that
family and business are two distinct domains.
A competitive edge and outperformance?
The family domain is emotion-based, emphasising care and loyalty, Because of the often anecdotal flavour of some of the advantages and
while the business domain is task-based, with an emphasis on perform- disadvantages of being a family business, there has been a lot of research
ance and results. The family business is a fusion of these two powerful recently to try to provide some hard evidence of the impact of these factors
institutions and although it provides the potential for superior perform- on the commercial performance of family firms. In other words, do advan-
ance, it is not surprising that it can also lead to serious difficulties. These tages such as commitment, stability, flexibility, long-term planning and
can mean patterns of emotional behaviour emerging within the business, so on, translate into tangible commercial returns, or do the disadvantages
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at the tree: another fell, and almost near enough to touch me; so that
I was no less surprised than he, not being able to imagine the cause
of the phenomenon. Not the smallest sign of a living creature
appeared, and I was certain that cocoa-nuts never fall of themselves,
but when in a state of over-ripeness, while those were absolutely
hard and immature.
Ernest.—This is somewhat like the adventures of Fairy-land,
father, I think—No sooner do the personages form a wish, than it is
granted.
Father.—I begin indeed to think so. However, it may be that the
magician who is so ready to oblige us, may lie concealed behind
some of the leaves in the tree in the form of a wicked little monkey,
which all the time may not intend so much to do us a favour, as to
drive us from the place.
Ernest now ventured to take up the nuts. We found them even too
unripe to be made use of, and were more than ever at a loss to
account for their falling from the tree, round which we continually
paced, endeavouring to explain the mystery. In vain, however, we
strained our eyes; we saw nothing, but now and then a slight motion
of the leaves: but neither bird nor beast appeared; and not a breath
of wind was stirring.
Fritz had by this time concluded his narration to his mother; and
observing that Ernest and I seemed occupied by something of a
perplexing kind, and looked up repeatedly at one tree, he supposed
we must have discovered some animal in it, and ran to have his
share of the adventure, bringing also his younger brothers. We told
him what had passed:—he shewed us that he had the eyes of a lynx.
I shall soon, said he, see what it all means, raising his face to gaze
at the tree; if one would but fall at this moment, I would soon tell you
who threw it.—At the very instant two nuts fell, and so near to the
speaker as to bruise his lip and his chin. Ernest could not refrain
from laughing heartily. The magician is at least polite, said he; he
conducts his gifts to your very mouth; and it is no fault of his if the
dimensions of yours are not large enough to receive it:—but look,
look, there are two more falling close to our mother and Francis.
How well-behaved this magician shows himself;—In proportion as
the guests increase, he takes care to send one for each. Let us
quickly open one of them and refresh ourselves with the liquor it
contains, in drinking to the health of our unknown friend. We did so;
and each obtained a small quantity of the milk, in the fragments of
the shell; and all called out together as they drank it, looking up at
the tree, Long life and thanks to the good magician!—Ah, ah, I see
him; there he is, exclaimed Jack. Oh, heavens! what a hideous
creature! what an ugly shape he has! he is as large as my hat, and
has two monstrous pincer claws.
Where is he then? said I, for I do not see him.—There, that is he,
father, crawling slowly down the tree; do you see him now?—It was a
land crab, an animal that, to say the truth, deserved Jack’s
description of him. The land crab resembles the sea crab, but is ten
times more hideous: some kinds of them are excellent food, and are
the principal subsistence of the natives where they are found. The
one we now met with was of the kind called cocoa crab, on account
of its fondness for that fruit. It crawls with great difficulty and slowly,
up the trunk of the tree; when it has reached the clumps of leaves, it
conceals itself in them, and falls to pinching off the bunches of
cocoa-nuts at the stalks; he separates and then throws them down
one by one, which often bruises them considerably. The crab then
descends, and finds below a plentiful regale. It is said by some that
their claws are strong enough to break the shell of the nut; but for
myself, I doubt this, having always believed rather that they suck the
milk by means of the small hole found in the fruit near the stalk. The
land crab is not dangerous unless you are within reach of its claws,
or, which is rarely the case, when they are found together in great
numbers. Little Francis on seeing the animal was terribly frightened,
and hid himself behind his mother; even Ernest drew back, and
looked for a place of refuge: Jack, with a menacing air, raised the
end of his gun; and we all cast some looks of curiosity as the
creature slowly descended the tree. The moment he was on the
ground, the intrepid Jack aimed a blow at him with his gun, which
missed him. The crab, finding himself attacked, turned round and
advanced with his claws stretched open towards his enemy. My little
ruffian defended himself valiantly; he did not retreat a single step, but
his attempts to strike, entirely failed, for the crab was perfect in the
art of evading every blow. I however determined not to interfere: I
saw that there could be no danger to the boy, and that the scene
would conclude by his subduing the animal, if he conducted the affair
with prudence and address. I must observe that nothing could be
more amusing than this exhibition of a fight between a little boy and
a crab.
After some time, being tired out with so many fruitless attempts,
and perhaps recollecting that the pinches he might get from the
animal’s claws would not be very agreeable, and finding himself
likely to be brought to close quarters with him, suddenly gave him
the slip and ran off. The other boys now burst into peals of laughter,
bawling out: So the magician has conquered you! he has made you
run away! poor Jack! but why did you engage with a magician, Jack?
On this, the lad piqued by their jeers, stopped short, threw his gun
and his game-bag on the ground, stripped off his coat, spread it
before him, and made a stand at his adversary, who was making up
to him with his claws stretched out in a menacing sort of motion.
Jack, without a moment’s hesitation, threw his coat upon the
creature, and wrapped him round in it; then tapping on the outside
upon his shell: Wicked magician, cried he, I have you at last! I will
teach you to brandish your horns another time.
I laughed so heartily at this scene, that I had not the power to give
him any assistance. I saw by the motion under the coat that the crab
was still alert and angry. I therefore took my hatchet and applied two
or three powerful blows with it on the coat, which I took for granted
would finish the affair at once. I lifted up the coat; and, as I expected,
the terrible animal was dead, but still preserved a menacing posture.
What an ugly monster! cried Jack, as he stood over him: but far
from being terrified by his ugliness, it only served to quicken my
ardour:—one must always be glad to deliver the earth of such a
monster.
You would have something to do, my young Hercules, said I,
tapping him on the shoulder; no animal is so common as the crab on
the shores of the sea: they are of numerous kinds, and may be seen
by millions, all equally ugly. This, if I mistake not, is distinguished by
the name of the poet’s crab. What say you, Jack, to a thought just
come into my head, of creating an order of knighthood for you, in
which you shall be dubbed—Sir Crab? This is the second time that
you have engaged in combat with these pincer-clawed animals. We
will say nothing of the first, in which you got a bite by the leg; but this
time you have evinced considerable courage and presence of mind.
The thought of throwing your coat over the creature was well
imagined; I doubt if you would have subdued him by any other
means. It must be an animal of prodigious strength for its size, to be
able to open a cocoa-nut, so that it was no inconsiderable enemy
you were engaged with: but human prudence and reason give man
the advantage over even the most formidable of the brute creation.
Jack.—May we eat crabs, father?—they are so very ugly!
Father.—Use makes all things easy. Many ugly things find their
way to the most delicately served tables. For our crab, it is the
favourite food of the negro slaves of the Antilles, and frequently of
their masters also. I should think its flesh must be hard and
indigestible; but we will make trial of it for dinner.
I put the famous animal along with the cocoa nuts it had been the
means of procuring us, together on the sledge, and we resumed our
march. As we advanced, the wood became thicker and more difficult
to pass; I was frequently obliged to use the hatchet to make a free
passage for the ass. The heat also increased, and we were all
complaining of thirst, when Ernest, whose discoveries were generally
of a kind to be of use, made one at this moment of a most agreeable
nature. He has already been described as a great lover of natural
history, and now he was continually gathering, as he proceeded,
such plants as he met with, and examining them with care, with the
view of adding to his stock of knowledge. He found a kind of hollow
stalk of a tolerable height, which grew at the foot of the trees, and
frequently entangled our feet in walking. He cut some of the plants
with his knife, and was much surprised in about a minute to see a
drop of pure fresh water issue from them at the place where the knife
had been applied: he showed it to us, put it to his lips, and found it
perfectly agreeable, and felt much regret that there was no more. I
then fell to examining the phenomenon myself, and soon perceived
that the want of air prevented a more considerable issue of water. I
made some more incisions, and presently water flowed out as if from
a small conduit. Ernest, and after him the other boys, refreshed
themselves and quenched their thirst at this new fountain, in the
completest manner. For my own part, touched with deep gratitude for
the goodness of God towards me and my beloved family, I raised my
eyes to heaven: See, children, said I, what a blessing is sent us by
Providence in these beneficial plants, the name of which I am much
concerned to be unacquainted with. What would become of poor
travellers in this burning climate, in crossing such immense forests
far from the relief of water-springs! they must inevitably perish with
heat and thirst, if the Almighty did not extend his goodness to the
providing these necessary benefits.
I tried the experiment of dividing the plants longways, and they
soon gave out water enough to supply even the ass, the monkey,
and the wounded bustard. We were still compelled to fight our way
through thick bushes, till at length we arrived at the wood of gourds,
which was the object of our excursion, and we were not long in
finding the spot where Fritz and I had once before enjoyed so
agreeable a repose. Our companions had not soon done admiring
and wondering at the magnificence of the trees they now beheld,
and the prodigious size of the fruit which grew in so singular a
manner upon the trunk. Fritz, who was already acquainted with
particulars respecting them, now performed the office of lecturer to
the rest, as I before had done to him. I was glad to observe that he
had not forgot any part of the detail he received from me during our
first visit; and while he was talking, I strolled about the wood,
choosing among the numerous sizes of the gourds, such as were
particularly suited for our necessities, and marking the places in my
mind’s eye. I sought also to discover whether the malicious horde of
monkeys were not still in the same neighbourhood, for I a little
apprehended being molested by them during our occupation. I,
however, to my great satisfaction, discovered no trace of them, and I
returned to my companions.
I found Jack and Ernest actively employed in collecting dried
branches and flints, while their mother was occupied in attending to
the poor bustard, which however she saw reason to believe was not
materially injured. She remarked to me that it was cruel to keep her
any longer blinded and her legs tied together on the sledge. To
please her, I took off the covering and loosened the string on the
legs, but still left it so as to be a guard against its running away or
inflicting blows on those who might approach. I contented myself
with tying her by a long string to the trunk of a tree, that she might
relieve herself by walking about. She had by no means the
savageness of manners I should have expected, excepting when the
dogs went near her. She did not appear to have any dread of man;
which confirmed my previous belief, that the island in which we
existed, had absolutely no human inhabitants but ourselves.
The boys now amused themselves with making a large fire, which
they joyously surrounded. I took the liberty to laugh at them, and
asked if they had become salamanders, or inhabitants of the planet
Mercury, who, it is said, make fires to refresh themselves from the
burning heat of the sun; the heat of our island could scarcely be less
ardent, and this irony was therefore fair and admissible.
The fire, father, is to enable us to cook the magician.—Ah, hah,
that is quite another thing, replied I. It was then for the same
purpose, I suppose, that I saw you picking up some large shells: you
mean no doubt to use them in the cooking, instead of the rind of the
gourds which would not bear sufficient heat.
They all agreed to my conclusion. Begin then, continued I, by
making the dish you will want for dressing your crab, before you
make a large fire and get roasted yourself by its side.
I require also, said my wife, that some vessels to contain milk, and
a large flat spoon to cut out my butter by pieces, and next some
pretty plates for serving it at table, should be completed, gentlemen,
among you all.
Father.—You are perfectly reasonable in your demand, dear wife,
said I; and for me there must be manufactured some nests for the
pigeons, some baskets for eggs, and some hives for bees.
All.—Oh yes, these things must all be made, we will set earnestly
to work.
Jack.—But first, father, let me make a dish for my crab; the
excessive heat would certainly make him unfit to be eaten by the
evening, and I should be sorry to be obliged to throw away what it
cost me so much trouble to obtain: I should soon have finished, if
you will tell me how to divide one of the rinds with a string.
Father.—Well, well, it is but fair to allow you to enjoy the fruit of
your victory. As to the cutting with a string, it was good for something
when we had no saw. I will however show you, for fear of the worst,
how to do it, though I took care to bring here the different
instruments I thought we might want. Gather then a sufficient
quantity of the gourds, of different sizes, and you shall see how soon
we will cut them.
They all began to gather or collect, and we were soon in
possession of a sufficient number of this valuable commodity. We
found a certain quantity already dry upon the tree, and these we
considered fit for immediate use: many also were so bruised or
broken in falling, and others so immature, that we threw them aside
as useless. We now began our work: some had to cut; others to saw,
scoop out, and model into agreeable forms. It was a real pleasure to
witness the activity exhibited in this manufacture of porcelain: each
tried what specimens of imagination he could present for the
applause of his companions. For my own part, I made a pretty
basket, large enough to carry eggs, with one of the gourds, leaving
an arch at the top to serve as a cover. I likewise accomplished a
certain number of vessels, also with covers, fit to hold our milk, and
then some spoons to skim the cream. My next attempt was to
execute some bottles large enough to contain a supply of fresh
water, and these occasioned me more trouble than all the rest. It was
necessary to empty the gourd through the small opening of the size
of one’s finger which I had cut in it; I was obliged after loosening the
contents by means of a stick, to get them out by the friction of shot
and water well shaken on the inside. Lastly, to please my wife I
undertook the labour of a set of plates for her use. Fritz and Jack
engaged to make the hives for the bees, and nests for the pigeons
and hens. For this last object, they took the largest gourds, and cut a
hole in front proportioned to the size of the animal for whose use it
was intended: they had when finished so very pretty an appearance,
that little Francis was ready to cry that he was not quite small
enough to get into and live in one of them. The pigeons’ nests were
intended to be tied to the branches of our tree; those for the hens,
the geese, and the ducks, were to be placed between its roots or on
the sea-shore, and to represent a sort of hen-coop. When the most
essential of the utensils were finished, I allowed them, as they had
requested, to add a dish to dress their crab in. This also was soon
accomplished; but when the cooking was completed, they
discovered that they had no water. We found nothing on this spot like
our providential fountain plants, as we had named them. The boys
entreated me to go about with them in different directions, and try to
find a small supply of this precious article, not daring by themselves
to venture further into the wood.
I was therefore of necessity compelled to accompany them. Ernest
with great eagerness proposed relieving me of this trouble, and
putting himself in my place. He had found it impossible to succeed in
assisting to make the utensils; he broke more than half the pieces of
gourd he took in hand, and to make amends for his awkwardness,
he exerted himself in every direction to discover a water-spring, or to
do something else that might be useful. It was not long before we
heard him calling loudly to us, and saw him returning in great alarm.
Run quick, father, said he, here is an immense wild boar. Oh, how he
frightened me! I heard him grunting quite close to me, and then he
scampered away to the wood, and I hear him at this very moment.
Here, here! I then called out to the boys: call the dogs quickly;
here is fine game for us, if we are so lucky as to catch it. Halloo,
here, Turk, Ponto! The dogs arrived full gallop. Ernest was our
leader, and conducted us to the place where the boar had
approached him; but he was gone, and we saw nothing but a plot of
potatoes which had the appearance of having been ransacked by
the animal. The ardour for the chase had been somewhat checked in
Jack and Ernest, when they considered for a moment that they had
so formidable a creature as a boar to encounter; they stopped short,
and began to dig potatoes, and left it to Fritz and me to follow the
traces of the dogs. We soon heard the cry of the latter; for they had
overtaken the runaway, and soon after the most hideous growling
assailed our ears from the same quarter.
We advanced with caution to the spot, holding our guns before us
in readiness to fire together, the instant the animal should show itself
within the proper distance. Presently the spectacle of the two brave
creatures attacking him on the right and left presented itself; each
held one of his ears between their teeth. But the beast was not a
boar, as the account of Ernest had made me suppose, but a pig of
the true common breed, which on our approach, appeared rather to
ask for our assistance, than to have any inclination to attack us.
Contrary to our expectation, Fritz and myself also suddenly lost the
relish for sporting against this animal; for we immediately recognised
in the supposed boar, our own sow which had run away and had so
long been lost. After the first surprise we could not resist a hearty
laugh; and then we hastened to disincumber our old friend of the
teeth of her two adversaries. Her frightful squalling resounded
through the wood and drew the attention of our companions, who
now ran to the place, when a warfare of banter and accusation went
round among the parties:—Fritz knew certain persons whose
passion for the chase ended in digging potatoes! Jack and Ernest
returned the sally by complimenting Fritz on the fine martial
appearance of the wild boar they had been so fortunate as to make
captive!—Why, Fritz, we knew in a moment, by the grunting, that it
was only our old sow.—You however believed it to be a wild boar, Mr.
Ernest, returned Fritz, and even after you had seen it.
I know not what Ernest would have answered; for the attention of
all was attracted to a kind of small potatoe which we observed lying
thick on the grass around us, and which had fallen from some trees
which appeared loaded with the same production: our sow devoured
them greedily, thus consoling herself for the fright she had been put
into, and the pain the dogs had occasioned her.
The fruit was of different colours, and extremely pleasing to the
eye. Fritz expressed his apprehension that it was the pernicious kind
of apple called the Mancenilla, against which I had so strenuously
cautioned them; but the sow ate them with so much eagerness, and
the tree which bore them being neither so high, and having neither
the form nor foliage ascribed by naturalists to the Mancenilla, made
me doubt of the truth of his idea. I forbore from immediately
pronouncing its condemnation; but I desired my sons to put some of
the fruit in their pockets, to make an experiment with them upon the
monkey. I was shortly after nearly satisfied of their harmless quality,
from seeing that the two dogs also fell upon them with eagerness;
but I persisted in forbidding the boys to taste them till I had further
examined into their nature and properties; and they all of course
obeyed me. We now again, from extreme thirst, began to recollect
our want of water, and determined to seek for some in every
direction. Jack sprang off and sought among the rocks, hoping, and
with reason, that he should discover some little stream: but scarcely
had he left the wood, than he bawled to us that he had found a
crocodile.....
A crocodile! cried I with a hearty laugh, you have a fine
imagination, my boy! who ever saw a crocodile on such scorching
rocks as these, and with not a drop of water near? Now, Jack, you
are surely dreaming.....
Not so much of a dream as you may think, father, answered Jack,
trying to speak in a low voice;—fortunately he is asleep;—he lies
here on a stone at his full length;—he is exactly like our mother.
Father.—This is excellent, upon my word! So then your mother is
like a crocodile?—This is really an indiscreet sort of a joke.
Jack.—I meant, father, that the crocodile is about as long as the
height of our mother; I had not, I assure you, the least idea of a joke;
for it is certainly a crocodile, though perhaps only a young one.....
Do, father, step here and look at it, it does not stir in the least.
I knew not what to think: we stole softly to the place where the
animal lay; but instead of a crocodile I saw before me an individual of
a large sort of lizard, named by naturalists Leguana or Yguana3, and
the flesh of which is considered in the West Indies as the greatest
delicacy. I explained this to my sons, and tranquillised them as to the
danger of approaching this animal, formed by nature of a mild
character, and excellent as food. All were then immediately seized
with the hope of seizing the lizard and presenting so rare a prize to
their mother. Fritz in a moment had his gun ready, and was taking his
aim, but that I was in time to lay hold of his arm and prevent him: You
are always too quick, said I, in your determinations; your piece might
have missed, or you might have wounded him only slightly; for this
sort of animal is protected by a coat of scales as you see, and it is
extremely difficult to destroy him. I think too that he is known to be
extremely dangerous if approached when he is angry. Let us try
another sort of experiment; as he is asleep, we need not be in a
hurry: only a little contrivance is necessary to have him safe in our
power alive, and the process will afford us all an amusing spectacle.
I cut a stout stick from a bush, to the extremity of which I tied a
string with a running knot. I guarded my other hand simply with a
little switch, and thus with cautious steps approached the sleeping
animal. When I was very near to him, I began to whistle a lively air,
taking care to make the sounds low at first, and to increase in
loudness till the lizard was awaked4. The creature appeared
entranced with pleasure as the sounds fell upon his ear; he raised
his head to receive them still more distinctly, and looked round on all
sides to discover from whence they came. I now advanced by a step
at a time, without a moment’s interval in the music, which fixed him
like a statue to the place. At length I was near enough to reach him
with my switch, with which I tickled him gently, still continuing to
whistle, one after the other, the different airs I could recollect. The
lizard was bewildered by the charms of the music; the attitudes he
threw himself into were expressive of a delirious voluptuousness; he
stretched himself at full length, made undulating motions with his
long tail, threw his head about, raised it up, and by this sort of action,
disclosed the formidable range of his sharp-pointed teeth, which
were capable of tearing us to pieces if we had excited his hostility. I
dexterously seized the moment of his raising his head, to throw my
noose over him. When this was accomplished, the boys drew near
also, and wanted instantly to draw it tight and strangle him at once;
but this I positively forbad, being unwilling to cause the poor animal
so unmerited a suffering. I had used the noose only to make sure of
him in case it should happen that a milder mode of killing him, which
I intended to try, failed of success, in which case I should have
looked to the noose for protection; but this was rendered
unnecessary. Continuing to whistle my most affecting melodies, I
seized a favourable moment to plunge my switch into one of his
nostrils; the blood flowed in abundance, and soon deprived him of
life, without his exhibiting the least appearance of being in pain; on
the contrary, to the last moment he seemed to be still listening to the
music.
As soon as he was dead I allowed the boys to come quite near
and to tighten the noose, which we now found useful to draw him to
the ground from the large stone on which he lay. My sons were
delighted with the means I had used for killing him without pain. But
little praise is due to me, I replied; for I have often in books of travels,
read the description of the manner of deluding and destroying this
animal, so well known in the West Indies. But now let us consider of
the best way for transporting to Falcon’s Stream so large and
valuable a booty. After a moment of reflection, I perceived that I had
better come at once to the determination of carrying him across my
shoulders: and the figure I made with so singular an animal on my
back, with his tail dragging on the ground, was not the least amusing
circumstance of the adventure. Fritz and Jack presented themselves
as pages, contending which should support my train, as they called
the tail, which, independently of the good-humour inspired amongst
us, considerably eased me of the weight, and gave me the air of an
old Chinese emperor habited in a superb royal mantle of many
colours, for those of the lizard shone like precious stones in the eyes
of the sun.
We were already far advanced in our return, when we
distinguished the voice of my wife calling upon my name in a tone
which indicated great uneasiness; and in addition, we heard loud
sobs from little Francis. Our long absence had excited painful
apprehensions concerning us: we had forgot on this occasion to give
them notice of our approach, by firing our gun, and they had
imagined some terrible disaster must have befallen us. No sooner,
however, did our cheerful notes in speaking reach their ear, than
their fears and lamentations were changed to joy, and we soon found
ourselves assembled together, the happiest of beings, under a large
gourd-tree, where we related to our dear companions every
particular of the excursion we had made; not forgetting Jack’s
singular fancy of finding a resemblance between his mother and the
lizard, who now lay extended at her feet. We had so many things to
inform her of, that we lost sight of the principal object which caused
our separation; and till she reminded us with some regret at our ill
success, we forgot to mention that we had failed of procuring any
water. My sons had taken out some of the unknown apples from their
pockets, and they lay on the ground by our side. Knips soon scented
them, and according to custom he came slily up and stole several,
and fell to chewing them with great eagerness. I myself threw one or
two to the bustard, who also ate them without hesitation. Being now
convinced that the apples were not of a poisonous nature, I
announced to the boys, who had looked on with envy all the time,
that they also might now begin to eat them, and I myself set the
example. We found them excellent in quality, and I began to suspect
that they might be the sort of fruit called guava, which is much
esteemed in such countries. The tree which bears them is
sometimes twenty feet in height; no doubt therefore, those from
which we procured the fruit, were too young to have attained their full
stature. The tree itself is of so fertile a nature, that in inhabited
countries they are constantly obliged to be thinned and cut down, on
account of the quantity of land they would occupy.
This regale of the apples had in some measure relieved our thirst;
but on the other hand, they had increased our hunger; and as we
had not time for preparing a portion of the lizard, we were obliged to
content ourselves with the cold provisions we had brought with us.
But we contrived to have an excellent dessert of potatoes, which the
boys had had the foresight to lay under the cinders of the fire they
had made to cook their crab.
We had scarcely finished taking this refreshment, before my wife
earnestly entreated that we might immediately begin our journey
home, to be sure of arriving before dark. In fact, it appeared to me,
as the evening was so far advanced, that it would be prudent to
return this once without the sledge, which was heavy laden, and the
ass would have drawn it but slowly: I was besides, inclined to take a
shorter road by a narrow path that divided a plantation of thick
bushes, which would have been too difficult a passage for the ass
burthened with the sledge. I therefore determined to leave it on the
spot till the following day, when I could return and fetch it, contenting
myself with loading the ass for the present, with the bags which
contained our new sets of porcelain; with the lizard, which I feared
might not keep fresh so long; and our little Francis, who began to
complain of being tired. I took these arrangements upon myself, and
left to my wife and Fritz, the care of confining the bustard in such a
manner that she could walk before us without danger of escaping.
When these preparations were complete, our little caravan was
put in motion, taking the direction of a straight line to Falcon’s
Stream. On leaving the wood of gourds, we arrived at a spot where
we found more of the guava trees, and could not resist the
temptation to stay a few moments and secure a new supply. The
course of our route lay next along a majestic wood of oaks,
agreeably interspersed with fig-trees of luxuriant growth, and of the
same species as those at Falcon’s Stream. The ground in this place
was absolutely covered with acorns. My young travellers, ever on the
watch for something new and gratifying to the palate, could not
refrain from tasting them: in form they exactly resembled the same
fruit in Europe, though from the difference of climate, they would
probably not be the same in regard to quality and flavour. One of the
boys bit an acorn in two; and finding it both sweet and mild to the
taste, he told his brothers, who soon fell eagerly to filling their own
pockets with them, as well as mine and those of their mother. I
always hailed with satisfaction every occasion that presented, of
increasing the number of our resources for support: in the one that
now presented itself, I perceived the hope that we might not only be
ourselves nourished but our poultry also: I more than ever admired
the magnificence of the trees which at this moment covered us with
their shade, and made us a present of so inestimable a value: on
considering, I recognised that they were a kind of oak which remains
always green, and are a common production of the woods in Florida,
and that the Indians of North America extract from its fruit an
excellent kind of sweet oil, which they use in cooking their rice.
Numerous kinds of birds subsist upon these acorns. This we were
led to remark, by the wild and discordant cries of several sorts of
jays and parrots, which were skipping merrily among the foliage and
the branches. The boys would instantly have fired their guns; and I
could only prevail upon them to desist, by observing how late it was,
and promising that we would return another time, and thus procure
them an opportunity for their favourite amusement.
We arrived shortly, and sooner than we expected, at Falcon’s
Stream; the path we had taken had so considerably lessened the
distance, that we were in time to employ ourselves in some trifling
arrangements, before it was completely dark. My wife had great
pleasure in taking out her service of porcelain and using some of the
articles that very evening; particularly the handsome egg-basket and
the vessels for the milk. Fritz was instructed to dig a place in the
ground to serve for a kind of cooler, the better to preserve the milk;
and we covered it with boards and put heavy stones to keep them
down. Jack took the pigeons’ nests, and scampered up the tree,
where he nailed them to the branches; he next laid some dry moss
within, and placed one of the female pigeons we had contrived to
tame, and which at the time was brooding, upon it; he put the eggs
carefully under the mother, who seemed to accept his services, and
to coo in return, with gratitude.
Ernest was occupied in distributing and fixing those intended for
the fowls among the roots of the trees: when he had finished, it was
of importance to observe how well they would accustom themselves
to this their new abode; they were already on their perches, with their
head under their wing and half asleep, and took very much amiss the
being thus disturbed; while Ernest, for his part, was enraged at the
little inclination they discovered to inhabit their new abode.
My own employment was to clean the inside of the lizard and
prepare a piece of it for our supper, my wife having expressed an
extreme repugnance to both the lizard and the crab; we therefore
added some potatoes and some acorns, and dressed them together,
and thus suited every palate. Francis had the care of turning the spit,
and liked his office all the better, for its allowing of his being
constantly near his mother. We all drew near a clear brisk fire while
the supper was in hand: a sea breeze had refreshed the air, and
after great fatigue, a good fire seldom fails to occasion agreeable
sensations. This well-spent and useful day was concluded by a
refreshing repast, at which all but my wife bestowed encomiums on
the palatable properties of the leguana. My wife could not prevail
upon herself even to taste it; she therefore supped on the potatoes.
The crab was found to have but little flavour, and was put aside as
useless. We concluded the exertions of the day, by contriving a
comfortable bed for the bustard by the side of the flamingo, and then
hastened to stretch our weary limbs upon the homely couch, but
rendered by fatigue luxurious, that waited for us in the giant tree.
CHAPTER XXIII.
Excursion into unknown countries.
It is scarcely necessary to relate, that my first thought the next

morning, was to fetch the sledge from the wood. I had a double
motive for leaving it there, which I had refrained from explaining to
my wife, to avoid giving her uneasiness. I had formed a wish to
penetrate a little further into the soil, and ascertain whether any thing
useful would present itself beyond the wall of rocks. I was, besides,
desirous to be better acquainted with the extent, the form, and
general productions of our island: I wished Fritz only, who was
stronger and more courageous than his brothers, to accompany me;
and accordingly left the three others, and Ponto, to protect my wife.
We allowed Turk to be our travelling companion, who did not fail to
testify his joy by jumping about, and barking loud. We set out very
early in the morning, and drove the ass before us for the purpose of
drawing home the sledge.
On reaching the wood of ever-green oaks, we found the sow
feeding voluptuously upon the acorns under the trees. We wished
her a good appetite, and begged her to admit us to the honour of
partaking her breakfast; and accordingly Fritz filled the pockets of his
waistcoat with some of them. We perceived with pleasure that the
lecture of the preceding day had rendered the animal more tractable:
she did not now seek to avoid us; and we might even have induced
her to return home, if we had had time to take the pains. As we were
quietly picking up some of the acorns, we observed some birds,
which occupied the wood in every direction, advancing towards us.
Some of them were clothed with a plumage of exquisite beauty; and
for this once, I could not refuse Fritz the pleasure of firing upon them,
that we might in consequence obtain a nearer view, and inform
ourselves respecting their species. He brought down three. I
recognised one to be the great blue Virginia jay, and the other two
were parrots. One of the two was a superb red parrot; the other was
green and yellow.
While Fritz was reloading his gun, we heard a singular sort of
noise which came from a distance: at one moment it resembled a
muffled drum, at another, the noise made in sharpening a saw. My
first idea was of music played by savages, and we retreated quickly
to hide ourselves among the bushes to listen. By degrees we
advanced towards the place from whence the sound appeared to
come; but perceiving nothing to alarm us, we separated some of the
branches with our hands, and then discovered a handsome bird
about the size of the English cock; and, like it too, adorned with
elegantly-formed smooth feathers round the neck, and a comb upon
his head. The animal stood erect on a decayed trunk of a tree, which
was lying on the ground, and at this moment exhibited some singular
gestures. His tail was spread in the form of a fan, similar to that of
the turkey-cock, but shorter; the feathers round his neck and head
were erect and bristling. He sometimes agitated them with so quick a
motion, as to make them appear like a vapour which suddenly
inclosed him; sometimes he whirled himself round and round on the
trunk of the tree; at others he moved his head and eyes in such a
manner as to express a state of distraction, making at the same
time, the singular kind of noise with his voice, which had alarmed us,
and which was preceded and followed by a sort of explosion. This
last was caused by a motion of his wing striking in a quick measure
on the trunk, which was hollow and dry, and made the noise
resemble a muffled drum. All around him, there was assembled a
great number of birds of the same species, but much smaller, and of
a less beautiful form. One and all fixed their eyes upon him, and
seemed delighted with the pantomime. I contemplated this
extraordinary spectacle, of which I had formerly read an account,
with astonishment. The number of the spectators of the feathered
actor, increased every moment; and the performance increased in
spirit also, in proportion, presenting the idea of a perfect intoxication
or delirium of the creature. At this moment, Fritz, who stood a little
behind me, put an end to the scene by firing off his gun. The actor
fell from the stage, and stretching himself on the sand, breathed his
last, and the spectators betook themselves suddenly to flight. I must
confess, the interest I took in the scene was of so lively a nature, that
I could not refrain from reproaching Fritz in an angry tone. Why, said
I, must we be always applying the means of death and annihilation to
the creatures that fall in our way? Is not nature a thousand times
more exhilarating in her animated movements, which express life
and enjoyment, than in the selfish scheme of destruction you seem
so fond of? Some allowance should no doubt be made for the
curiosity of youth, for necessities caused by our situation, and even
for the taste you have acquired for sporting; I therefore, as you well
know, do not object to your killing now and then a little game, or
some singular or dangerous kind of animal; but moderation is on all
occasions useful, and the spectacle of this bird, employed in such
earnest endeavours to draw his females around him, was at least as
amusing, as to see him stretched there at length, and lifeless, who
but two minutes ago exhibited such rapid and lively motions! His
pretty hens too all dispersed in terror, and deprived of the possibility
of ever more admiring him or being his companions.
Fritz looked down, ashamed and sorry. I observed to him that the
thing being done, there was now no remedy; that the tetrix5 or heath-
cock was much esteemed as game; and that as the mischief had
occurred, he had better take it from the ground and carry it to his
mother.
He did as I desired; and in spite of my lecture I saw that he was
rejoiced to have acquired such a prize. Is it not a beautiful creature,
father? said he: but I am most curious to be informed what all his
action was intended to represent.
Father.—I imagine his gestures and his cries were intended to
assemble his females, of which he has a large number, similar to the
common cock of Europe. I cannot help thinking, Fritz, how cruel it
was thus to interrupt the poor creature’s innocent amusements.
Fritz.—I am now extremely sorry for it, father; particularly when I
recollect that we might have caught him alive, and that it is so
desirable to have possessed this kind of fowl at Falcon’s Stream.
Father.—This is precisely what I was going to observe; I am not
sure that it is now too late to effect such a plan;—when we see either
of the hens disposed to brood, we will bring the monkey here to
search about for the eggs of these animals; if we should be so lucky
as to find a nest, which I think probable, we will take away the eggs,
and put them under the brooding hen; by these means we shall
procure some of this handsome race of fowls.
We now laid the dead cock upon the ass’s back, and proceeded
on our journey. We soon arrived at the guava trees, and a little after
at the spot where we had left the sledge in the wood of gourds, when
we found our treasures in the best possible condition: but as the
morning was not far advanced, we entered upon our intended project
of penetrating beyond the wall of rocks.
We pursued our way in a straight line at the foot of these massy
and solid productions of nature, every moment expecting to reach
their extremity, or to find some turn, or breach, or passage through
them, that should conduct us into the interior of the island, if, as I
presumed, it was not terminated by these rocks. We walked on,
continually looking about, that nothing might escape us worthy of
notice, or to be enabled to anticipate and avoid such dangers as
should threaten. Turk with his usual bravery took the lead, the ass
followed with lazy steps shaking his long ears, and Fritz and I
brought up the rear. We met from time to time with some small
streams which afforded a most agreeable refreshment; we passed a
wood of guava trees and fields of potatoes and manioc, the stalks of
which perplexed our way; but we were recompensed for this
inconvenience by the fine views which every where presented
themselves, and which the low stature of the plants enabled us to
see in perfection. To the right, on the high grounds, we saw hares
and agoutis in considerable numbers, amusing themselves on the
grass in the morning sun. Fritz mistook them for marmots, but not
one of them made the whistling kind of sound which is customary
with these animals when they see a strange object. The idea of my
son seemed therefore to be unfounded: again he wished to be
convinced by firing his gun; but fortunately, the rock on which they
were stationed, was at too great a distance for it to take effect.

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