Ensuring the continued success of Canada’s family enterprises

Two years ago, John Abell, president and CEO of Toronto-based Abell Pest Control, travelled across Canada and the U.S. to meet and talk to every one of the over 500 employees in each of the company’s locations.

One of the topics of discussion was the leadership transition of his daughter Elizabeth Abell, a fourth-generation member of this family enterprise founded 95 years ago by Mr. Abell’s grandfather.

“I didn’t just announce that Elizabeth was going to be this company’s leader one day, and the fact is, the succession process might be another five to 10 years and will occur when Elizabeth has achieved leadership skills,” says Mr. Abell, whose four other children are pursuing very successful careers outside of the family business. “But I made a point of taking the time to articulate that when the transition to the new leadership does happen, it will be comfortable and safe for our employees, in large part because we are doing the work today to make sure that Elizabeth is fully prepared to lead the company.

“That has taken a lot of the concern about job security out, and there’s positive reaction from our employees seeing that there is continuity in the family business.”

As Canada’s current generation of family business owners continues to age, many are thinking – and worrying – about how to ensure continuity in the company that either they or their forebears founded years ago.

The challenges are numerous and complex, ranging from a lack of suitable or willing successors among the next generation to sibling rivalry, to the potential unwillingness of non-family managers to recognize the incoming leader’s authority.

“There’s a significant amount of planning and preparation needed to successfully transfer ownership and leadership in family-owned businesses,” says Bill Brushett, president and CEO of Family Enterprise Xchange (FEX). “There’s a lot of wealth tied up in these businesses, so it’s important that these transfers are done right. But it’s not just about money; legacy, continuity and well-being of the family, the non-family employees and the community itself are also very important.”

What can help ensure a smooth transition from one generation of business owners to the next? Wendy Sage-Hayward, a Family Enterprise Advisor at the Family Business Consulting Group in Vancouver and member of the FEX Leadership Council, says creating a road map that sets out a vision and goals based on where the family wants to take the family enterprise is a valuable exercise.

“This road map creates alignment so that everyone is rowing in the same direction around what you’re trying to build in the future,” she says. “It’s profoundly important to have this discussion because it also helps you understand each family member’s motivations and aspirations.”

Family dynamics may make such discussions touchy, says Ms. Sage-Hayward. It’s one of the key reasons family businesses bring her in: to provide knowledgeable and objective guidance, and to help create a formal structure around the family’s processes for planning, discussing and preparing for critical events.

“An external adviser can provide perspective and direct families towards appropriate resources as they work to develop the next generation of leaders,” says Ms. Sage-Hayward. “We can help them strengthen communication and decision-making capability within the family, build their network and even help them understand the importance of educating spouses about the business, because regardless of whether spouses are part of it or not, they’re raising the next generation.”

For the father-daughter team at Abell Pest Control, having access to FEX experts, members and resources has made all the difference, especially for Elizabeth Abell. Through FEX and LinkedIn, Ms. Abell has forged deep connections with other family business members who share similar experiences and concerns.

With her father’s support, she recently took on the role of central Ontario board of advisors co-chair for the FEX Next Gen Committee.

“We are strong advocates of FEX,” says Ms. Abell, who is currently in an apprenticeship program that sees her working in virtually every facet of the business. “They are a really great resource, and they’ve helped me get the support I need, and will continue to need, as I move forward with my development program at Abell.”

For more information about the Family Enterprise Xchange, visit family-enterprise-xchange.com.

Advertising feature produced by Randall Anthony Communications. The Globe’s editorial department was not involved.