In 1987, Allen Taylor left law school to assume operations of his family’s third-generation business. His father’s business partner had just been diagnosed with Alzheimer’s, and Taylor was brought in to assume his executive position. And to complicate matters, Taylor’s new rank was senior to that of his elder brother and sister, who were also working at the firm at that time.
Within 18 months, Taylor’s father was diagnosed with advanced colon cancer, and he passed away in 1993, leaving behind a last will and testament that shook the family’s dynamics. “He had set up the conditions of the sale of our family operations—and it was to be either to outside buyers or to me,” Taylor says. “There had been no consultation with the family. My brother and sister were absolutely certain that I had something to do with it.”
The unexpected news severed the relationship between the siblings, creating a slew of problems that linger today, with no reconciliation in sight. Taylor was 24 and found himself feeling disoriented, “out there, alone in the business community,” he says. That’s when a colleague invited him to join a peer advisory group (PAG) through his local chapter of the Canadian Association of Family Enterprise (CAFE), an organization that connects family businesses with peers and resources to help them better understand themselves in order to make better decisions. Taylor found CAFE so helpful that he has since become its current chair, helping the organization advocate for greater communication and understanding between family members as it seeks out new ways to facilitate such dialogue.
By The Numbers
Percentage of the world’s businesses that are family-owned
Percentage of the global GDP generated by family businesses
Percentage of family businesses anticipating an ownership or management transition in the next five years
Percentage of family businesses with a formal succession plan in place
Number of years that CAFE has been connecting business families for success
PAGs serve as brain trusts for CAFE members. Family business leaders join the groups to share their challenges, goals, and outcomes in an intimate setting, and the structured agenda of each meeting helps boost member confidence. Using this safety net, Taylor found the support he needed to navigate his firm’s tumultuous transition, ultimately deciding to remain active on his family company’s board rather than be involved in daily operations.
“There is no such thing as a perfect transition,” Taylor says. “There is always going to be a misstep or something not handled absolutely to perfection.” The hardest part of transitions is not only finding the right answers but asking the right questions. Through CAFE, Taylor advocates that family businesses focus not just on technical transition issues but also on softer issues such as family relationships and collective goals in order to come to a common vision. He says that if he and his family had engaged in a facilitated conversation about their company’s transition, the ensuing crisis could have been averted.
In Taylor’s experience, such situations are all too common. “In Canada, family enterprises represent most of the GDP, employment, and innovation in the economy—and a substantial proportion of philanthropic support for our institutions,” he says, adding that roughly 50 percent of these businesses will, in the short term, face a transition of some kind—a passing of ownership or management to someone new, either inside or outside of the family.
Through its intensive work with family businesses, CAFE has identified some common, effective strategies for ameliorating conflict. “We found that when families got together to talk about the real challenges and concerns, it wasn’t about if they had an effective lawyer or a good accountant,” Taylor says. “It was about whether there was an environment of trust, good communication between generations, and allowing enough runway for a family to get aligned on goals and objectives.”
CAFE uses its expertise to bring families together in confidential environments where they can discuss how to navigate the dynamics of their businesses. One of the organization’s most successful programs is the Business Family Forum, started by its Ontario chapter. In a series similar to the famous TED Talks, guest speakers share their stories and lessons learned from the trenches of family business. These forums are often eye-opening for attendees and have become major drivers of new membership.
Over time, CAFE has influenced families in myriad industries. One of its businesses, a prominent bank that’s now a CAFE sponsor, has actually evolved through knowledge directly gained from the organization’s members, shifting its approach to succession planning from transactional to holistic and, in the process, becoming more sensitive to family issues and better equipped to navigate them.
“We hope to change the playing field over the next one to three years to ensure our family enterprises are well armed and well assisted to make these transitions as well as possible,” Taylor says. “Strong businesses do not make strong families, but strong families do make strong businesses.”