power to the people - Swinburne University of Technology

usiness
Keeping it
in the family
Succession planning in family
businesses can be fraught with
difficulty but a new study could
make the process easier.
By carolyn boyd
Family businesses form the backbone
of the Australian economy – around
70 per cent of the nation’s companies
are family owned and operated.
However, when the time comes to hand
over the reins to the next generation,
things do not always go smoothly.
“Often there is a fair degree of secrecy and nontransparency
around succession planning,” says
Michael Gilding, Executive Dean of the Faculty
of Business and Enterprise at Swinburne. “It is
something that family businesses consistently
struggle to deal with. The more they put it off, the
more difficult it becomes.”
Gilding is one of five researchers conducting a
two-year study into how families decide who to pass
their businesses to and when to make the transition.
Working with national accounting firm Pitcher
Partners, the team has interviewed 43 Australian
family businesses, ranging in age from less than two
decades to more than 160 years of family operation.
The researchers haven’t just spoken with CEOs, who
are typically male, but have also interviewed their
spouses and other family members to get a more
in-depth understanding of succession planning.
The influence of wives
“Wives of family business CEOs are often deeply
overlooked and we think that they are very
underestimated,” says Gilding. “Wives have a unique
outlook on the whole succession planning process
and they often have a huge influence on whether
the planning process works or it doesn’t work.
Unless you have an understanding of all the different
players in the process, you haven’t got a very
good model.”
PhD candidate Barbara Cosson conducted the
spouse interviews and says the hardest part was
hearing the stories of families who were “completely
riven by trying to sort their relationships out”. “I have
spoken to numerous families where they don’t speak
to different arms of the family, and actually haven’t for
many years,” she says.
Despite the difficulties involved in handing family
businesses to the next generation, postdoctoral
research fellow Dr Sheree Gregory says continuity is
vital to many families. “Having a family continue on
in the business is quite important, so is keeping the
bloodline going and keeping a legacy,” she says.
Often there is a fair
degree of secrecy and
non-transparency
around succession
planning. It is something
that family businesses
consistently struggle
to deal with. The more
they put it off, the more
difficult it becomes.
Michael Gilding,
Executive Dean of the Faculty of Business
and Enterprise at Swinburne
The research goes global
The researchers are now conducting a global survey, in
conjunction with Pitcher Partners, to compare the way
families approach succession planning in 40 countries.
The Family Business Succession Survey is being run
in several languages, including Spanish, Korean and
Mandarin. In Australia, the team is hoping to garner
at least 1000 responses.
“When you do a survey in Australia it is interesting
but it is not as deeply insightful as comparisons with
survey data from other countries. Once you have
that data, you can then say what’s unique about us,”
says Gilding.
The research team recently had a paper based on
their research accepted by one of the world’s top
entrepreneurship journals, Entrepreneurship:
Theory and Practice. l
research.net/s/FamilyBusinessSuccessionSurvey
illustrATIOn: gregory balDWIn
18 | swinburne | venture | issue ONE 2013