In Profile: Gerry Robinson

Melanie Stern is Section Editor of Families in Business magazine.

"I believe that an objective outsider really can get things addressed. The presence of a camera, oddly enough, also helps"

Corporate celebrity Gerry Robinson, chairman of British spirits giant Allied Domecq PLC and until recently of the Arts Council of England, last year turned his hand to advising troubled family-run businesses in the BBC series 'I'll Show Them Who's Boss'. The second series of the show – sometimes controversial to the family business field and often cringe-worthy viewing – will air this summer on BBC2.

Gerry started his professional career with accountancy posts at then family-run UK companies, Lesney Products – manufacturer of Matchbox toy cars – and Volvo dealership, Lex. He later progressed to become finance director of Grand Metropolitan's UK Coca Cola business and later spent time as chairman and non-executive chairman of UK TV networks ITN and Granada, respectively.

He is a past chairman of News Corp's satellite TV arm BSkyB, a role recently and controversially filled by Rupert Murdoch's 31-year old son, James.

Gerry has answered a series of questions on the shows and family business in general, put to him by leaders of UK family businesses and their close advisers.

Danny Jatania, second family generation and financial director at personal care product manufacturer Lornamead, asks:
What are common conflicts in most family businesses between family members?
There are many conflicts, very few of which are really to do with the business; they are mostly about 'positioning' jealousy within the family.

Can you suggest the right recipe to create harmony and good relationships between those family members running the business, and those who are not?
I'd suggest providing a quarterly forum when non-active members can ask the management anything they like, and the management promises to try to answer honestly. I think this is the only time that questions can really be asked.

What are the root problems faced by family business to create a successful business?
Quality of leadership and the lack of freedom to take unpleasant people decisions, when they are necessary for the business.

How do you integrate the next generation in the family business?
Don't try. Have a system where family members have to apply like any outsider. You will be surprised how this gives freedom to the next generation and encourages the best talent to come forward.

Do you think a non-executive director would play a positive role on the board of a family business?
Yes – provided they are genuinely objective, and not just a friend of Dad's.

Tony Bogod, chairman of BDO Centre for Family Business, asks:
Traditional family business advisory wisdom says that the adviser is just the facilitator and the family takes responsibility for choosing the leader. It seemed as though in your work with family businesses, you took those decisions as well as facilitated them. What's your view – do you think the family should be the ones choosing or do you think the advisor is better placed to have the final say?
The companies I became involved with were largely in trouble because they couldn't make the (right) decisions. I believe that in many businesses the adviser is the facilitator.

The fourth family generation of a food manufacturing company in Scotland asks:
What overriding trends did you notice among family companies, good and bad?
The companies I examined were all either in financial difficulty or had reached a point at which some difficult decision had to be taken – so they were not a representative sample of family companies. I'm sure there are many family companies that are thriving where some of the positives would be easy to see. The overriding issues that I saw were a huge problem in choosing the right person when it was time for change, family issues getting in the way of business decisions and extreme difficulty for non-family employees to make it to the top.

What would you say from your experience is the growing family companies' greatest challenge in the 21st century business landscape?
Attracting managerial talent.

Some family business people who saw your show found your hard-line approach to the finer points of family business issues – in-fighting, egos, lack of formal structure etc – hard to swallow. Why do you think that is?
These are of course sensitive issues. The real value of having someone come in from outside is that he/she can often see what the real issues are. In my experience the issues holding back most family companies were the ones you list.

Tony Dunn, Corporate Finance partner at Grant Thornton's family business advisory, asks:
What are the main lessons that large family companies can learn from corporates, and vice versa?
Family businesses can learn about objectivity, in particular when choosing people for senior roles. They can learn to distinguish ownership from managership. Corporates can learn the real value of caring for those that you work with and the commitment that often applies in family businesses.

What is the best way for a large family business to achieve critical mass in its management team?
Be genuinely willing to appoint the best people at all levels, irrespective of whether they are family or not.

What role do you think that advisers should play in the development of a family business: how can the advisory community be more helpful?
I'm not a great believer in using advisers unless a family has a specific brief that it can't answer within the company itself. This applies to all companies. My strong advice would be to think very carefully before consulting outside the company; however, when the company is in trouble or simply cannot take a key decision a strong, objective outside adviser is a godsend.

How would you advise large family businesses to develop their succession or exit strategy?
Distinguish between ownership and management. Use an 'outsider' (trusted family friend, head-hunter) to give objective advice on who should follow the existing leader. It is the lack of objectivity that gives family businesses the biggest problems in this area. If you are actively seeking an exit, then a good merchant banker is essential. They will advise on potential buyers or other forms of exit such as flotation or introducing private shareholders.

Geoffrey Dovey, third generation chairman of family-owned food distribution company, Dovey Premium Products Limited, asks:
You have a reputation for being an excellent corporate businessman with quoted companies, so what made you want to help family businesses?
I have always believed that what matters most in business is the people who run them and how they inter-relate. It is often more difficult for family members to see what these issues are because they have lived with their colleagues all of their lives. An outsider who is objective can often get to the real issues remarkably quickly.

After you finished working with the families in the first series of I'll Show Them Who's Boss, what do you think happened within their businesses and the families themselves?
The Browns (George Brown & Sons – greengrocers) are happier than they ever were and the business is booming. This is also true for the Duff-Penningtons at Muncaster Castle. I don't know about the 'Coffee Brothers' but I suspect they will have chosen a leader by now (probably Alastair) but will still be arguing. The Dyeing business – having failed to take any advice – has folded.

Do you see yourself as a catalyst for change?
Yes. I believe that an objective outsider really can get things addressed. The presence of a camera, oddly enough, also helps.

How do you deal with the 'feelings' involved with the families you're working with?
The 'feelings' are really always the main issue. I believe strongly that feelings that are brought out into the open are then, more often than not, dealt with. There are few things more harmful than emotions that are left bubbling under the surface and not acknowledged.

Is it possible to transfer business solutions from large corporates to family businesses?
It is my experience that the issues are nearly always the same, irrespective of the size of the business, and they are really always to do with people. The solutions work for both.

The fourth-generation chairman of a leading family business in Scotland, who declined to be named, asks:
What type of person or organisation do you think is best placed to consult a family business, as opposed to a corporate?
Someone who has good people skills and is intellectually honest. It is amazing how often, when you have to tell someone unpleasant news, they manage it far better than you imagine.

What drew you to want to troubleshoot family businesses?
The people issues, and I guess my own background coming from a large, loving but often troublesome, family.

What have you gained or learned personally from working with family businesses?
That there is a remarkable similarity in the way that all families operate together.

With one period of family business consulting under your belt, how might you change your approach for the forthcoming series?
The approach changes with each business. There are some very interesting new angles in the second series.

Alex Scott, chairman of family owned private equity company SandAire, asks:
Academic evidence over the past 30 years concludes that a basket of shares in family-controlled companies perform better as investments than a basket of publicly-controlled companies – why do you think that is?
I'm surprised by it in some ways. It must also be very difficult to evaluate as there is no easy way to value a share in a non-quoted company. Having said that, if you have an excellent leader in a family business – the sheer commitment of people to the business give it an additional success factor.

Would you invest your personal cash in family companies?
Not with my own family and only very selectively with others.

John Tucker, Head of Family Business Services at Grant Thornton, asks:
If a business adviser concentrates on 'what is best for the business', how do they also maintain a focus on the needs of the individuals and the family?
This is the heart of the issue. In dealing with family businesses, it is wise to establish up front who you are advising – is it the company or the family? If this isn't clear then the value of an adviser is extremely limited. It is really impossible to do both.

In a family business, boundaries are often blurred and role definition unclear. How does a business adviser ensure that family issues that may be impacting on the efficiency and sustainability of the business are dealt with sensitively?
It is vital to separate the right advice from how difficult it is to deliver! I have found that if you deal with finding out what the issues really are first – completely ignoring what the 'family' consequences are – then you get to the best answer. Then you can deal with how best to tackle the family consequences that follow from the advice.

How does a family business clarify who is the client in the family – the business, the shareholders or the people calling in the business adviser?
A good question. Be very clear and upfront who you are being asked to work for. As I said earlier, their interests are often not parallel.

How does a business adviser deal with the non-active shareholders often present in the family business?
Try not to unless it is in the original brief. If they are not active in the business then their views, while often interesting, can also be completely wrong or out of date. It's easy to snipe from the sidelines!

Do you believe enough is being done to encourage family members joining the business to gain business education?
No. It should be obligatory for family members to work outside the family business for at least five years, because it is the best education they will get. It is also good to encourage them to gain professional qualifications in the areas that interest them most.