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Thorntons: A tale of chocolates and conflicts

The name Thorntons is synonymous with confectionery, but the family story behind the chocolate giant is anything but sweet. Peter Thornton talks exclusively to Marc Smith about working in a chocolate dynasty where family unity has melted away.

Peter Thornton knows a thing or two about chocolate. As the third-generation, former chairman of UK-based confectionery company Thorntons, he spent 35 years working for the family business famed for its "Continental Assortment" selection boxes. However, his career was cut short when, in 1987 aged 54, he was dismissed by his own kith and kin as family loyalty and unity completely melted away following years of family disagreements. It has taken Peter 20 years to fully get over the incident that, in his own words, left him "shattered and utterly broken … wiped from the company's history book as if I had never existed."

Now he is ready to tell his side of the story. Thorntons began life in 1911 when Joseph William Thornton opened his first shop – a "high class confectionery establishment" in England's steel city of Sheffield – to cater for a growing population of affluent business and professional classes.

Ownership of the business passed to his 21-year-old son Norman, one of Joseph's four children and Peter's father, in 1919. Norman's younger brother Stanley joined two years later. Peter was born into the family in 1933 and by the time he was 15, the business had grown to include 32 shops, two factories and a reputation for quality and value.

Family relationships are key to the Thorntons story and none more so than Peter's relationship with his father Norman. Describing his father's strengths as being intelligence and a financial, analytical mind allied to artistic tendencies, it is tellingly his description of the weaknesses that are most vivid.

"He had a really serious anxiety complex that affected him all the time. I don't know for sure, but I think he was probably suffering from depression, which caused him to suffer from a conscious fear that the business would go bust. He was also very dominant and aggressive towards me which made me really scared of him," Peter exclusively tells Campden FB.

Nevertheless, Peter (pictured) says such a forceful personality did not stop him from identifying so completely with the family business that his "own identity and self respect were entirely dependent on it." Indeed, he never thought of doing anything else. "It seemed to be expected. I was never given any independent advice on what else I might have done or what other courses of higher education I might have followed apart from my father's ideas," says Peter.

Living up to his dominant nature, Norman sent his son to London to study a chocolate and sugar confectionery course. Peter formally became a member of staff at the family business in 1953 aged 20, where he joined older brother Tony. Peter began in the boiled sweet department of the company's factory in the summer of that year, but soon realised there was no formal structure in place.

"The business was extremely amateur in those days," he explains. "Apart from a few suggestions from my brother, I was left to work out my own position within the company. There was no job description, no induction and no way to measure my progress."

Peter struggled on in this vein until 1957 when he was given his first post of responsibility as head of the chocolate department. He set about making the department more efficient, upgrading the decrepit equipment and increasing production.

However, family tensions were ever present at the top of the business, which manifested themselves at a weekly meeting between Norman and his brother Stanley. "They would sit facing each other and I was sometimes called in to witness the proceedings. It could hardly be called a discussion because mostly it consisted of my father telling Stanley how wrong he was and how stupid all his ideas were," says Peter.

At this point in time there were five family members in the business: chairman and joint MD Norman, his sons Tony (retail manager) and Peter (chocolate department manager), plus Stanley (joint managing director) and his son Michael (factory manager). However, they were only in their senior positions because they were all family, not because they were, in Peter's words "trained executives".

Norman's idiosyncratic approach to business was highlighted at the end of 1958 when he told Peter he was being removed from his role in the chocolate department and being moved to quality control – a clear demotion.

This decision was taken for family reasons and not because it made business sense, as Norman explained to Peter: "You've had more than your share of the family business so somebody else has got to have a turn." The somebody else Norman was referring to was Peter's cousin Michael.

Peter says of his demotion: "It seemed my father wanted to give Michael a better opportunity but it was completely irrational and terribly upsetting and de-motivating."

Nevertheless, Peter acquiesced and in common with many other next gens of the period, says he didn't feel he had a choice. "In a disorganised, dysfunctional family business like Thorntons was at that time, you get locked into it," explains Peter.

"I came into that business without having done anything else apart from going into the army – I certainly didn't have any qualifications – so it would have been very difficult for me to leave and get a job with an equable income."

Family showdowns

He stuck at the quality control job for three and a half years, but finally snapped in 1962. "I was completely frustrated and thought 'I can't take this anymore, I've got to do something about it,'" says Peter. Consequently, he went to see his father and told him he wanted to leave the family business.

However, his father's response was not the one that he had prepared for. "He said: 'Look Peter, you are now 29. Your brother was made a director when he became 29, so now we are going to make you a director as well,'" recalls Peter.

Unsurprisingly, Peter says he was taken aback and despite fighting his case a little further, he went away from this first showdown feeling "somewhat deflated but with a modest tingling of pleasure that I had been made a director."

Despite the apparent progress, serious misgivings about Peter's relationship with Norman – who he claims was always criticising and complaining – continued.

"It was an all-consuming and unresolved difficulty. It was not that we had great rows … it was more the constant suppression of one's feelings, always having to bite one's tongue, the perpetual feeling of being ignored and undervalued," says Peter.

Three years after their first showdown, Peter once again plucked up the courage to confront his father. "I'd worked out why I had this fear of him, which transferred to a fear of other older male figures," explains Peter. "I've read a lot of psychology and realised that I could get myself out of the situation by directly confronting it so I deliberately decided and planned to have a big row with him."

Peter recalls that after being told by his own son that he was "fed up of being pushed around", that he could no longer accept that "everything you say is right" and that he "demanded to be treated as an adult", his father exploded with rage.

Norman ordered his own son out of the house and told him not to come back. Peter drove away distressed but with a huge feeling of satisfaction that he had at last dealt with the situation.

It was eight weeks before Norman picked up the phone and called his son to apologise. Peter went to see him a few days later and from then on the two maintained an open relationship in which Peter was accorded much more respect and was acknowledged for his contributions to the business.

Sibling rivalry

Unfortunately, while the showdown had improved the relationship with his father, it actually made things worse with brother Tony, who Peter had viewed as a "hero figure". "I can only assume," explains Peter, "that maybe Tony never sorted out his own problems with our father and possibly resented the fact that I had."

Norman relinquished the chairmanship in 1968 meaning Stanley and Tony became joint MDs. Michael became administration director, while Peter was production director.

Norman's youngest son John, 10 years Peter's junior, also joined the company and, in keeping with family tradition, was made a director aged 29 with an explicit mandate to run the engineering department. However, the decision to make John a director was made in secret by the controlling shareholders Norman and Stanley, who held 43.5% and 42.2% of the voting shares respectively.

In addition to Norman and Stanley's 85.7%, Tony held 6.85%, Michael held 5%, while Peter held only 0.5%. With no consultation process, Peter was less than impressed that John was made a director without his knowledge. Allied to this was John's personality, which was very similar in nature to that of his father Norman. Peter suspected that John wanted to take control from the day he first joined the business.

"Emotionally you can understand the situation because he was the youngest, because we'd all been there much longer and because he was like another generation," explains Peter. "I don't blame anyone – it's a situation we all found ourselves in. There was a lack of consideration as to how we would all get on together. The mix of personalities and the power structure within the group was set up unintentionally, which meant that in a group working together we had unequal roles. Four members of my generation with different levels of emotional maturity and with separate personal agendas were never properly brought together as a team."

Concerns were brought to a head when the business hit a difficult period and profits began to slide in the 1970s. Director meetings descended into family arguments – Tony told Peter he was thinking of resigning because he didn't have the same interest anymore, but told John it was because he could no longer stand working with Peter.

It was around this time that Peter enlisted the help of an occupational psychologist. Between them they produced a diagram that, when presented to the family, enabled all the members to better understand the situation at hand.

A series of management reorganisations were suggested, something akin to rearranging the deckchairs on the Titanic. It was decided that Tony would stay on as MD with additional responsibility for marketing, while John took over production and Peter took over sales.

The move certainly helped the relationship between John and Peter as their previously separate fiefdoms were now both looked after by John while Peter had a new project to get his teeth into. Unfortunately, business was not improving as prices were not keeping up with costs and discussions soon returned to whether Tony was up to the job of managing director.

John and Peter decided they should become joint managing directors, although Peter remained unhappy with the amount of power he was giving to his younger sibling. In such a scenario, Peter was to have responsibility for retail and marketing – about which he knew little – while John would look after manufacturing and management services.

The two brothers put their idea to the rest of the family directors and it was accepted. Stanley retired and Tony moved to become chairman feeling, understandably, a certain sense of rejection.

Encouraged by the apparent success of getting an occupational psychologist on board, Peter continued to look outside of the business for help and got Peter Doyle, a professor of retail marketing, to give his views on how to improve the company's fortunes. He also signed himself onto a course of the same name.

As a result of the work with Peter Doyle, business began to pick up at the beginning of the 1980s and with a large cash surplus, thoughts turned to expansion in the US. Peter spent a lot of time over in America checking out possible acquisitions with Tony, but this only served to cause further tensions with John back in the UK, who began to take unilateral decisions without Peter's knowledge.

Things came to a head during a board meeting in 1982, when John declared the joint MD arrangement wasn't working and either he or Peter had to go. If it was he who had to go, John demanded that he was still paid his salary despite not working. Tony diffused the situation by stating that Peter had been doing a good job looking to expand the business and perhaps the best solution was for Peter to take up a position of group development director with the express aim of opening Thornton's first non-UK retail operation.

This solution was agreed, but it wasn't long before once again discussion arose about the tenability of Tony's position as chairman. John and Peter both agreed that there were too many family members in the business and that Tony should be the one to go. Deliberations led to the decision that Tony would retire at the end of 1983.

As part of the agreement, the family said it would take the company public. In the meantime, Peter would become acting chairman, Michael acting vice chairman and John would remain as MD.

The passing of Norman in 1984 led to further complications due to the potential imbalance of power created by the redistribution of his shares in which Tony became the biggest beneficiary. Crucially, however, the biggest hurdle to going public was also removed as Norman was adamant that the company would remain in family hands while he was alive.

Although Peter began to think strategically about the possibility of an IPO, it soon became evident that a decision to go public would be based, in part at least, not on what made sense for the business, but on how best to solve the mounting conflict between Peter and John. Specifically this manifested itself in Peter's belief that John was too busy to discuss any differences of opinion, alternative viewpoints were never considered and unilateral action usually lead to conflict.

Going public solved several problems in Peter's mind, but at a specially convened board meeting to discuss the personality clashes between John and Peter, the consensus was for a trade sale. Critically, low morale was also seeping into the workforce and pressure was mounting for a lasting solution to be found.

Talk of an IPO did not go away and after a successful financial year in 1986, pressure increased from Tony who, having no executive input, was keen for a cash settlement. John was again threatening to resign and saw a listing as a way out. All these reasons severely weakened Peter's position who was arguing for an improvement in governance procedures that would help to end the conflict.

If it came to a vote, Tony said he would have to back John given the recent upturn in company performance while Michael remained non-committal. Peter's hands were tied so he agreed to put forward proposals for how he saw an IPO being arranged.

Any thoughts that a decision to go public would end the disagreements proved short-lived. The investment bank brought in to advise on the IPO process was also dragged into the family conflict. Whilst Peter was away at a family wedding, he claims a meeting took place between other directors and the investment bank at which it was decided that Peter would be told that he had to resign. Michael also confirmed that he would back John to end the conflict.

With little room for manoeuvre, Peter was completely desperate and says he felt "like a cornered animal when all the hunters' rifles are trained its direction." The die was cast.

The denouement came on 2 June 1987 at a board meeting when Peter was asked, as "an obligation" to the family and the business, to tender his resignation subject to reasonable terms and a legal promise to take Thorntons public.

"They threw me out within a week, which was particularly devastating and galling because I felt I had contributed so much. Ultimately the public listing was a business decision made to solve a family problem," he says.

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