Driving Innovation in a Family Business
15th February 2017
The family behind Thomas Swan & Co. Ltd., a 90-year-old business currently in its 4th generation, knows the importance of reinventing oneself to achieve a sustainable business.
To Harry Swan, Managing Director of the global chemical manufacturing firm since 2006, leading a sustainable family business is ultimately down to two overarching principles, ensuring long-lasting survival and being responsible towards the environment.
Regardless of size, sector or age, family businesses are well-known for their long-term outlook and desire to thrive across generations, making a positive impact on the people and communities of today and tomorrow. For this reason, family business owners are often called ‘stewards’, a role that Harry Swan has fully embraced since taking over his family business.
Unconstrained by desire for quick profits and prepared to wait for longer-term returns, Thomas Swan has been able to focus on wider goals and longer-term investments. “If you want to be here for another thirty, forty, fifty years, that dampens down your desire for a massive profit next year. We still want to make a healthy profit, but it has got to be one that is sustainable” says Harry.
Remaining relevant in a changing world
Shortly after taking over leadership of the firm Harry was hit with his first challenge – the global economic crisis and the massive energy price hikes which accompanied it. Harry reacted by shifting the business focus towards renewables. Thanks to his experience in plant-based science, he was aware of the potential for plants to provide fuels and chemicals. This started a long process of investment and innovation, which led to a completely new business approach and renewed commercial success.
“For me it felt perfectly natural to be looking at a chemical company that traditionally derives its products from crude oil and to consider how we could start to move towards plant-derived chemicals, because everything we need within the chemical industry, plants can do” says Harry. “Crude oil is eventually going to run out, and there is no need for that to happen before moving towards more durable resources. We are lucky as a family and, because we take that long-term view, a five or six-year payback on an investment actually makes sense.”
Success and innovation
Today, the company relies solely on renewables for its energy and heat consumption, thanks to the development of an anaerobic digestion plant. With the use of grass and maize grown locally, Thomas Swan was able to move off the national grid, ensuring stability of costs, whilst reducing the firm’s environmental footprint. “Embracing sustainability is a journey that takes time. Now the challenge for us will be to find ways to continue using renewables for power generation without competing with food crops or agricultural land.”
As Thomas Swan embarked on its sustainability journey, Harry quickly realised that many other profitable companies had been doing the same and were leading the way in sustainability. Even more strikingly, he realised that there was a growing customer demand for sustainable products. “Ultimately, consumers demand a sustainable agenda. The company has to listen, because that is what generates the profits.”
Driving culture: from the boardroom to the shop floor
Having come across other successful models of business sustainability, Harry started driving culture change within the company by involving his team in peer learning journeys. “When the team saw that sustainability actually made commercial sense and it could work, they really bought into it. They felt empowered seeing that it can be done in a commercially viable way.
But when it came to my Board, the story was very different. They initially had doubts about profits, and I found it very difficult to get it across to them that this was something I am very passionate about and that it was going to be commercially successful.
The penny finally dropped when one of our key customers decided to preferentially source from us following a corporate social responsibility (CSR) audit. When the Board realised that not only there is commercial demand for sustainability, but also that if we didn’t start to move towards it we would actually be left behind, I think that was a dawning moment for them.”
On top of long-term energy savings and increased customer demand, sustainability has increased Thomas Swans employee engagement. Having explained sustainability to all employees and made it integral to the company’s strategy, this approach has now been embraced by everyone as a guiding principle, with an increased sense of ownership and engagement across the firm.
The journey ahead
As sustainability becomes embedded in Thomas Swan, the company continues to look for new ways of taking their long-term approach to the next level, developing new products and methodologies that are durable and environmentally responsible. “Ultimately, we want to make a positive impact on the environment, and I think this is a great aspiration to have” says Harry. “We all have to play our part and, as a family business, sustainability should not be a parallel strategy, it should be the strategy.”
Find out more about Thomas Swan's ongoing sustainability journey: join us at Thomas Swan & Co Ltd on 25 April to hear Harry share the opportunities he harnessed and the challenges encountered along the way.
In the meantime, explore the inspiring journey of Thomas Swan & Co Ltd by accessing the firm's case study, compiled by FBN.
Interested in knowing more about family business sustainability and how you can drive change in your family firm? Contact us at firstname.lastname@example.org or on 020 7630 6250