Alignment - The Key to Working with Non-Family
25th July 2017
World known family business Ferrero has recently appointed its first non-family CEO, as family owner Giovanni Ferrero moves to the role of Executive Chairman.
New CEO Lapo Civiletti will be responsible for short and medium term objectives as Giovanni, grandson of founder Pietro Ferrero, will focus on long term strategies as part of the firm’s global expansion plan.
"I am very confident that Mr Lapo Civiletti will ensure continuity in reaching business goals and effectively support the group in its growth objectives. He has been chosen for his business acumen, vision and mission-driven orientation whilst truly fostering the Ferrero culture and core values" Giovanni Ferrero
As both leaders of the much loved chocolate maker prepare to take on their new roles in September, this is a good time to shed some light on what appointing a non-family director means for a family business.
Whether your family firm has reached the stage of requiring external skills to take it to the next level, or there are no family members who desire the role, bringing in someone from outside can be beneficial. But it can also present challenges.
Recruiting non-family directors is a step change in family business. Families often fail to recognise the need for such change, or may be reticent for fear of losing control over the business. However, the shift to non-family management can bring many benefits.
The added value of non-family directors
Employing an external director is often the best way forward if the family cannot provide the right set of skills for the job. Recognising this is crucial, because ‘keeping it in the family’ at all costs can be detrimental both for the future of the business and for family relations. A new and complimentary set of skills can inject new dynamism into the family firm, and add a dose of realism that comes with a new pair of eyes.
This can be key for a family firm to move forward, keep growing and maintain stability when emotions prevail or periods of transition take place.
Keys to successful transition
Opening the firm to non-family management is a journey in itself. Whilst there is no one size fits all model, there are some general recommendations to help get it right.
These are ultimately down to alignment within the family, and between the family and the business. To achieve this, setting up effective and open communication at various levels is the key:
- Family communication: having in place functioning channels of communication between shareholders helps in aligning family and business goals. When employing non-family, talking openly about individuals’ fears helps establishing clear rules and the right processes. Ensuring these are understood and agreed by everyone in turn helps avoiding confusion and friction later on.
- Family to business communication: making sure the values and objectives of the family business are well known by non-family directors is essential to ensure they understand the firm’s true purpose and respect its workings.
Values give family firms a competitive edge thanks to greater levels of trust amongst employees and customers. When a company purpose is known and its values lived across the business, family firms will gain more engaged and loyal employees.
- Business to family communication: listening to non-family management and giving them the trust and freedom they need to perform helps the family business to gain new, strategic insights and perspectives, guidance and support during times of transition and, ultimately, long-lasting family business success.
If you would like to find out more about non-family management, don't miss our upcoming dinner event on 3 October with Jeremy Newsum, Trustee of the Grosvenor Estate. Find out more and register.