My Business: Troubleshooting family transitions

Mairi Mickel is a fourth-generation member of the family behind 93-year-old Scottish construction company Mactaggart and Mickel Group. When she left her family business in 2011, after 10 years in the fold, she was pulled by the idea of using her own experience to help other business families resolve their transition-related tensions. Today, Mickel remains an “active shareholder” of her family firm, while running her consultancy, Mairi Mickel’s Business Families. A Family Firm Institute-accredited advanced practitioner, Mickel spoke to Alexandra Newlove about why letting go does not have to be painful

What makes your advisory unique?

Family business advising is an emerging field and it is just as important as the technical and financial advice that is sought during family business transitions. I sit in the space between what the family expects, and what their business needs to grow, as it is often a place of tension. I look at succession planning over four strands: Leadership; ownership; assets/wealth; and legacy/values. That last one is a really good glue to cement the bigger conversation and all those strands together, especially where conflict exists within the family.

It is part behavioural dynamics, part management consultancy. I often collaborate with other advisers to support a family transition across disciplines.

Rather than looking at the inheritance plan, or the business plan in isolation I look at the whole thing as a system of needs and try to act as a resource for the family to evolve and to create harmony through those systems.

How did your experience within your own family business shape your advisory?

For anyone exiting a family business, it can be difficult and bruising. When I left [Mactaggart and Mickel] my personal circumstances were also changing. We had started that journey of the third generation to fourth generation succession, and it was painful and complex. I realised there was a need for other families to have an impartial adviser to say, ‘I have lived this and continue to live this, so I have deep empathy and can help you in your own transition’.

When I left, I had taken on a couple of non-executive director roles elsewhere to inform my ability in our own boardroom. I realised this was leading to a mindset change, and a realisation that I had experience that might be valuable to other business families during their transitions. It was more a case of being pulled, rather than pushed from my leadership role within my own family business.

In your consultancy work, what are some of the most common issues family business leaders are contending with?

Half my clients present wanting to make good plans for the future, because things have gone wrong in the past and they have reflected and thought, how can we better our next transition of ownership and leadership? The other half present in crisis, their level of discomfort is very high. Something has erupted and they need help.

Overall, the issues depend on the generational stage of transition. If it’s a first generation to second generation business it’s about modernising and professionalising the business as it grows and scales. So director training, better governance, proper boards, and business plans are my focus. In businesses that are getting older—the third and fourth generation—you are coming into thinking more about responsible ownership and wealth planning. Often, the gap between the owners and the leaders widens as you come down through the generations. So the need focuses on setting up ownership forums, improving family communication, and setting up committees for a family office, and family fun.

Irrespective of the age and stage and size of the business, developing the relationships between family members, as co-owners and co-leaders, is very important.

What did you learn from the succession process at Mactaggart and Mickel?

I think it is that push-pull point on succession, and how can you create meaningful roles for older generations, so if they feel they are being pushed by the incoming younger generation, they are equally focused on creating something significant to pull them as they exit.

My father was the first Mickel director to ever leave our business alive and I watched him plan his own succession amazingly well. He back-filled his executive roles, set out his vision for the board, and thought about what was next.

As he exited the chairman role of our business, he took on the chairmanship of the family trust which has been going since 1970—the Mickel Fund. He is 73 and is now off doing a boat building course. He managed his exit really well, and I’m so proud of him.

Supporting an exiting founder or older generation member —typically dad—in finding out what he is really passionate about in his life, is an area requiring massive focus. How do they define themselves beyond the business? That requires a lot of empathy, and probably about 5 to 10 years of support.

All these things that get [leaders] into business—entrepreneurialism, resilience to change, innovativeness, a risk appetite—can also be the things that hold them back when it is time to transition.

What can older generations do when younger family members have no interest in joining the family business?

When the older generation have thought about what makes the business attractive to the next generation and have clarified what roles might be available to them, or any opportunities for entrepreneurship, there tends to be much more engagement. I like this new concept of reverse mentoring: The idea that the next generation can mentor the older generation.