The Business of Family - Episodes Tagged with “Family Council”

Sean Lang & Jeff Watters - Appointing a Non-Family CEO & Selling a 5th Generation Business

Mike Boyd — Sun, 19 Sep 2021 15:00:00 +1000

The Lang family recruited Jeff Watters as the first outside CEO to lead Ainsworth Pet Nutrition in it's 5 generations. Sean Lang and Jeff Watters worked together, partnering with a private equity firm to scale the $100m per year business into a $2 billion dollar exit over the space of a decade.

This story covers not only leadership succession within a family business but also ownership succession and how the family have stayed together and united around a family office in the absence of an operating company.

Standout Quotes:

"What's gotten us here, isn't going to necessarily get us there" - [Sean]
"As a family, we realized that we would have to make a pretty major change in the journey... And we made the choice to start that journey from family-owned and family-run, to family-owned and professionally-run" - [Sean]
"I think in any family business, there's a certain level of distraction or disruption that comes from the family, and if you can move that into the family council and outside of the board room, it seems to be better for everybody" - [Jeff]
"The family office is being driven by a stewardship theme; Leave it better than you found it" - [Sean]

Key Takeaways:

Sean Lang and the Lang family represent a 5th generation business family who owned Ainsworth Pet Nutrition, while Jeff Watters is the first outside professional CEO recruited by the family to lead the business till it was finally sold.
The business started small, with deliveries made to "mom and pop" stores, expanded over the years, and all interested family members worked in the factory. After school, Sean started as a sales manager and worked his way up to be president.
The family realized that there was a need to make a major change to move with the competition and this would require great talent, moving from family-owned and family-run, to family-owned and professionally-run
Although Jeff was in a place where he wanted more in his life personally and professionally, his relationship with Sean was initially not a professional one. Following further interaction, Jeff realized the family was committed to the business, and they were authentic and intentional about their growth.
The average tenure of a Public Company CEO is about 4 years, and a Family Business CEO is about 6years, even if you think you're going to be there longer than that, you have to plan according to the statistics.
The introduction of professional leadership after 5 generations took some time, however, this had been tried previously and even though it failed, the family had started to get used to the idea. The goal had become to keep the family culture but adopt the benefit of big company thinking and growth capabilities.
The notion of an organic, natural but very transparent onboarding process is extremely helpful for professionals outside looking to join a family business.
Jeff also encourages professionals considering entry into a family business. You just have to bet on yourself to a certain extent. Once you're satisfied that the other party has high integrity and will deliver on their promises, have the conviction that you're going to deliver on yours, and if it doesn't work out, it doesn't work out. There will be other opportunities.
While Jeff's transition into the business had its hiccups, there was a lot of intentional effort from all sides to communicate effectively and create ways to tackle arising issues. This was made easier by the family culture of transitioning where the older generation completely let go of the business which allowed Sean to give Jeff the space needed.
Working with a Private Equity Company was pivotal in driving the rapid growth of the company moving from a 200 million-dollar company to a 2 billion-dollar company in 4 years.
Jeff describes that the main factor that drove growth while working with the PE Company, was a deep cultural alignment
Between the family and the company. It was all about a long strategic view of the business.
The family council was started by Sean's father, and one of the policies laid down was that incoming family members needed to work somewhere else for 2 years or until their first promotion whichever came later, before joining the business.
In the absence of an operating company, Jeff wanted to still have a family enterprise that could act as glue for the family, and help be a driver for education for the rising generation. This would also foster the creation of mechanisms to share the family history and culture with coming generations.
It's not always easy to leave it better than you found it, given the mathematical fact that families almost grow faster than businesses and assets, that means each family member needs to be self-sustaining and look at any help from the family later in life as icing on the cake, not the cake itself.
Sean shares he now has more time for family and personal relaxation, while also finding businesses to invest in. Jeff also tries to have fun, works with his wife on philanthropic projects, and serves on a number of boards.
Jeff's letter to his kids: Jeff tells them to be bold in the pursuit of what they love, hopefully, it will be something that allows them to leave this place a better place. He encourages them to take a leap of faith, the financial fortune is an opportunity for them to invest in their future in a way that can be fulfilling for them and differentiating for their community.
Sean's letter to his kids: The family business cocktail of money, love, and power is trouble. It can rip families apart easily and needs to be proactively managed within the family with the help of professionals.

Episode Timeline:

[00:52] Introducing today's guests, Sean Lang and Jeff Watters.
[02:30] Sean shares the history of the family business.
[08:00] What was the reason for bringing in outside leadership?
[10:00] How Jeff got involved with the business.
[15:18] Were there any surprises while bringing in the idea of getting professional leadership after 5 generations?
[20:21] Jeff describes his transition into the role of CEO.
[29:30] Discussing the growth of the business, involvement of a Private Equity, and the decision to exit rather than transition to a 6th generation.
[42:02] When did the Family Council begin?
[52:25] What was the transition like after the final decision to sell the company?
[01:00:22] Before the company was sold, there were plans to continue the Family Council?
[01:03:51] What Next?
[01:06:00] In a letter to your children, what is one lesson or idea you don't think many parents would mention but you consider important to understand?

For more episodes go to
BusinessOfFamily.net

Follow Mike on Twitter @MikeBoyd

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Special Guests: Jeff Watters and Sean Lang.

Nike Anani - Building a Generational Bridge in African Family Firms

Mike Boyd — Mon, 01 Mar 2021 19:00:00 +1000

Nike is the founder and CEO of Nike Anani Practice, Ltd., in Lagos, Nigeria, where she helps second-generation family business members collaborate with the founding generation in an effort to build sustainable family enterprises in the region. No more than 2% of African family businesses successfully transition power to the second generation, and Nike has made it her mission to facilitate this generational merge.

With over a decade of experience working with select business families in Africa, Nike Anani helps owners lead their family organizations to long-term impact and legacy.

Her clients choose to engage her, not only because of her extensive professional training, but also because of her practical experience as both a business founder and a NextGen. This allows her to uniquely empathise with both generations and act as a connector to the Founding generation.

Standout Quotes:

"And that's an observation I have of founders and entrepreneurs, they're just amazing people that have an eye for opportunity" - [Nike]
"As most founders do, it was about giving me the best opportunity to set me up for success and often in their minds, success is going as far away from the business to get the best experience...so they can come back" - [Nike]
"In Nigeria, 90% of indigenous businesses are family businesses, but only 2% survive beyond the founder" - [Nike]
"Family businesses are so key to the community, if they keep failing after a generation, then what's that doing to the economy?" - [Nike]
"I think that starting from a relatively small base, the best way to build anything is with community, and actually building what that community wants rather than just dictating something that you found off the shelf from another culture" - [Mike]
"If you've seen one family business, you've seen one family business" - [Nike]
"A friend of mine says whenever you wake up is your morning, some people don't wake up until they're 85, they don't know what they want" - [Nike]
"I need to be in the best version of myself so I can serve people to the best of my ability" - [Nike]
"There's always something new to learn, we've never arrived, we're just on this ongoing journey of endless learning, in my view" - [Nike]
"There's no position that's guaranteed in life, whether it be a position of material success or honor, today you might be celebrated but it doesn't mean tomorrow you will be" - [Nike]
"It is important to ensure that people's external projections don't become your internal story, because your story is the most powerful thing that you can give yourself" - [Nike]

Key Takeaways:

Nike is a 2nd generation family business owner, and she narrates how her father started the family business initially as a side-hustle.
Describing events around her entry into the business, she shares the plan was to only stay for a few months in Nigeria, gain exposure to business in general, and move back to the UK eventually. However, she was drawn to the spirit of entrepreneurship there and felt more liberated as a young black female.
Nike explains that while her father had expressed general support for her in any field she was planning to go into, she had never expected she would work in the family business.
A glaring disparity in the decision-making process between her former place of work and the family business was the time taken which could be much shorter or longer in different scenarios, leaving her befuddled about family business as a whole. This encouraged her to get professional education at the Family Firm Institute in Boston.
Employing her knowledge in her family business, Nike started the process of "Governance" which involved her siblings more, intending to avert the typical dissolution that plagued most Nigerian family businesses after the founding generation.
Another strategy adopted involved starting the conversation by creating a community called "African Family Firms" for African families facing similar challenges to meet and navigate through these issues.
Nike highlights various peculiarities of African families, noting how these have to be put into consideration when trying to find solutions to the survival of family businesses in Africa.
You won't know what you want until you come together as a family, have open conversations, and plan for different scenarios. Get clear as a family on who you are, what your values are, the goals of the family, and the purpose of the family business.
Emphasizing the importance of continuous learning, Nike embraces the process as a part of being the best version of herself.
A significant failure that set her up for success took place in school, where the result she got at some point would not be good enough for the jobs she wanted, and this motivated her to push herself harder than ever before to achieve her desired goal.
Nike’s parents impressed upon her certain values described as 4Hs and 2Ps. The 4Hs are Honesty, Hard work, Humility, and Harmony while the 2Ps are People and Places. All of these were included in the family constitutional value system when the formal family enterprise was set up.
It is important to understand that while people can project their weaknesses onto you and vilify you, their external projections should not become your internal story because your story is the most powerful thing you can give yourself, and you have to hold on to that story.

Episode Timeline:

[00:50] Meet Today's guest, 'Nike Anani'.
[01:56] Nike's personal and professional background.
[08:30] How did the family make the jump from medical consumables to construction and building hospitals?
[16:55] How were you inspired to learn more about the Business of Family?
[23:00] Since the wake-up call that you received, what did you do about it for your own family or your friends' families?
[29:50] Do people document entitlements for kin or rather more of a bloodline lineage?
[32:53] Challenges surrounding Real Estate planning in Africa.
[39:18] An overview of Nike's different roles in family business generally.
[50:15] Has there been a specific failure that you've learned a great deal from?
[56:00] Apart from education, what else came through as fundamentally important from your parents?
[59:40] Nike's letter to her kids.

For more episodes go to
BusinessOfFamily.net

Follow Mike on Twitter @MikeBoyd

If you feel it's appropriate, I'd so appreciate you taking 30 seconds to Leave a Review on iTunes, I receive a notification of each review. Thank you!

Special Guest: Nike Anani.