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An insider reviews...

John Stepek is the son of a retired second generation family business owner. He lives in Glasgow and works as a freelance journalist and scriptwriter.

Don't Leave it to the Children, by Alan Crosbie (2000)
Marino Books; ISBN 1 86023 115 2; €14.95

Like all good newsmen, Alan Crosbie knows how to hook a reader from the start. Don't Leave it to the Children opens with the story of how, in the early 1850s, his great grandfather Thomas Crosbie, a journalist for tiny Irish newspaper, the Cork Examiner, would take a rowing boat out of Cork to greet the ocean liners coming in from the States and pick up the latest news from America. He'd not only scoop every other journalist in Europe for his own employer, but would then telegraph the stories to The Times. The Times eventually decided to call their foreign correspondent, still in his teens, to London for an interview. Things seemed to be going well until they realised that Thomas was a Catholic. In those days, The Times ­didn't employ Catholics as senior journalists, so the job offer was politely withdrawn.

"It's a little piece of bigotry that I've been thanking God for all my life!" laughs Alan, current chairman of Thomas Crosbie Holdings Ltd, the holding company for Examiner Publications Ltd. Alan is the fifth generation to run the Crosbie family business since Thomas bought The Cork Examiner in 1856, and the paper has remained in family hands ever since. Alan was CEO of the paper until 2001, during which time it was renamed The Examiner as part of a move to capture market share outside of Cork. The family also publishes several other papers, including evening newspaper, The Echo.

As a member of a successful family business, Alan knows the problems that must be overcome to survive as long as the Crosbies have, and his book covers a wide range of family business concerns with examples drawn from several companies, as well as his own experiences at The Examiner.

Written in a chatty, down-to-earth style, this is the work of someone who has experienced the sharp end of a family business, rather than an academic or consultant. This has both good points and bad points. The upside is that the book is easy and enjoyable to read, with a series of interesting anecdotes and human observations, such as Alan's friend whose need to treat all his sons equally found him poring over architectural plans with a tape measure to ensure all of their offices were identically proportioned. The downside is that the wide range of subjects covered means that none are dealt with in sufficient depth to be of strong practical application. It's certainly not a textbook on how to establish and run a family business, or even on how to pass it to your children, but it will make readers aware of the problems that others have faced, and give them food for thought.

While most of the issues in the book may be common knowledge to family members and family business practitioners, this overview approach will be useful for those who are less familiar with the problems facing such businesses, such as the staff who work for them. According to Alan: "There are thousands of people out there working for family businesses who don't have a clue what the pluses and minuses are. They can actually wind up without a job or being taken over simply because a brother and sister don't get on."

The main concern for most family businesses is, of course, succession – hence the title of the book. Most of the issues touched on, such as inheritance tax, managing the expectations of potential heirs, and corporate governance, are concerned with making the passing on of a family business a smoother process. Alan talks to various companies, from locals such as Moffett Engineering, sold by the second generation after they had turned it into a highly ­successful export business; to Barcelona-based winemakers, Codorníu, who have made it to their eighteenth generation with a carefully designed corporate governance structure which involves a family council and limited tenures for board members.

As the book makes clear, among such diverse companies, "you can't have any rules of thumb." Alan suggests that the general principle of "communication, communication, communication" lies at the heart of those businesses that do make it.

Discussing his own feelings about the important traits of a successful family business, he says: "There are two attributes that people with family businesses should spend a lot of time working on. One is communication – it has to be good between the generations. We talk as a family with my father and his cousin. We talk quite openly about the death of the older generation. My father went even farther. When he made out his will, he sat down with me and we did it together. That's the ultimate in communication as far as I'm concerned."

However, as some of the families in the book illustrate, notably the notorious Gucci case, where Maurizio Gucci was assassinated on the orders of his wife, Patrizia, a trusting relationship is not always easy to achieve, particularly when money comes into the emotional mix. Alan believes that if family relationships cannot sustain good communication, the key is to admit this.

"The first task is to recognise it's not there, and then to bring in someone to do it. Communication can be generated by bringing in outside advisors, and certainly for the changeover that we did in the early 1990s, between fourth and fifth generations, we did have a very valuable advisor for about six months - somebody who had built up a great level of trust with everyone involved."

His other recommended attribute however, isn't mentioned in the book.

"People laugh at me when I say the next one – you need a sense of humour. I spoke at a conference in Jeddah about it, and people were coming up to me afterwards and agreeing. A sense of humour has got all kinds of families out of trouble in the board room. If you were looking at it from outer space you would say we have to bottle it and give it to every board on Earth. At times even potentially disastrous situations can be lightened where you have the ability to switch into laugh mode. The amount of times we have been able to defuse crises by turning situations into a good old belly laugh – it's one of the vital attributes."

From the opening anecdote about his great-grandfather, to Alan's account of turning the business around during his stint as CEO, his enthusiasm and understanding of the issues comes across best when he's talking about his own experience, and the book would actually be better had it been a straightforward telling of the Crosbie family story, from which many useful lessons can be learnt – how many other family business CEOs can claim to be the fifth generation running the business?

The family was surprisingly forward-thinking in their attitude towards the business education their children received. "I left school in 1972. It probably sounds like heresay now, but it was felt at the time that it would be better for me to gain practical experience with other companies than go to university. I was paid by the paper and worked for these companies for free. It was the old merchant prince way of doing it!"

It was still expected that the children would slot into the jobs their fathers had done, rather than find their own aptitudes. Alan's father was in the advertising side of the paper, while his cousin Bob followed his own father into editorial. It wasn't until much later that Alan realised his own interest lay more in the editorial side.

"It was just assumed that I would go into the business, and once you went into the business, you followed in your father's footsteps. Now looking back I suppose I may have swapped areas of responsibility."

Alan's description of the insecurities of being an heir is a particularly good section of the book that will resonate with anyone who has been in his position, from his memories of the local school children's taunts of "the Crosbies are millionaires", to his feelings of inevitability regarding his entering the business. Many family business heirs will identify with the satisfaction he recalls feeling when a company in Australia offered him a paid job good enough to justify leaving the family business.

"It was very important to feel I had proved myself. The problem was that I was paid by The Examiner all of the time, so I never really knew how good I was – I wasn't costing these companies anything, so it wasn't in their interests to tell me whether I was doing a good job or not. The name Crosbie means a lot here, but in Australia it means nothing, so it meant a hell of a lot to me to be offered the job. I suspect that there are many family business members who will never know if they're there on merit or not."

Between taking over as CEO of Examiner publications in 1993, and moving on to become chairman of Thomas Crosbie Holdings in 2001, he successfully achieved his goals for the company. "I had two missions. One was to put The Examiner into a healthier financial position than it was. In 1991, it lost £1m. In 2000 it made £6m – a reasonable turnaround in a short period of time. Secondly, to separate the ownership function of the family from the management function."

This separation of ownership from management was achieved when, for the first time since his great-grandfather bought the paper, the CEO position was handed to a non-family member when Alan resigned the post in 2001. This period is not covered in the book, published in 2000, but is a logical extension of Alan's feelings regarding the importance of ensuring family members are capable of, and want to do the job, rather than assuming there is no choice.

"I wanted to create the situation whereby a non-family member was taking over as CEO. Traditionally it had always been assumed that the CEO was going to be a Crosbie. If we wanted to remain as owners of the paper, we would have to break that mould. It's not to say that a Crosbie will never be CEO again but I had to do it when another was not available, so that family members who didn't necessarily agree with me couldn't point to a family candidate and say they should fill the post.

"So far it's been quite successful. You could argue that my timing was either pretty good or pretty bad. Things started to go wrong with the Irish economy in May 2001. So the guys I handed over to didn't have the expanding market that I enjoyed in the late '90s. In some ways that was good for me. I am not the best manager in a curtailing situation – I am better when it's expanding. It hasn't been easy for the CEOs who have came in but overall, through tough times, the people who are non-family members are in a better position."

So as far as the sixth generation of Crosbies goes, what are his feelings? Don't leave it to the children?

"My oldest is only 14. What we are doing now is we are setting up a structure whereby the sixth generation is to be mentored by a group of us, the fifth generation – if they want to. The point of mentoring is to either get them into careers inside the organisation, if that's where their aptitude lies, or outside if the aptitude is elsewhere.

"We are trying to lay some ground rules while our kids are still quite young. We are working hard on differentiating between good owners and good managers. Somebody who would be a good editor won't necessarily be a good owner, and vice versa.

"I am concerned that they have happy lives. If having a business like ours can ease the burden then that's all very good, but it's better that people do things they enjoy doing. Having a business like this can be as much a burden as a blessing."

The next generation of Crosbies may rely on the internet more than rowing boats, but with a continuing tradition of strong, forward-thinking leaders at the helm, the company should last for another five generations. Perhaps the most interesting chapter of the Crosbie saga is yet to come.

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