August 5, 2009 3:00 am
Asixth-generation brushmaker; a seventh-generation textile specialist and a 10th-generation legal firm: when so many UK companies are going to the wall in the recession, how have these companies survived so long?
If times are tough now, imagine the challenge of surviving two or even three centuries, during which your original core sectors vanish, technology and globalisation transform entire manufacturing processes and markets, and corporate peers die or get swallowed by rivals.
Add to that the pressures special to family businesses, with vagaries of emotions and expectations, and you have a taste of the cocktail of challenges that very long-established family companies have confronted and surmounted.
Brushmaker Cottam Brush, textile specialist Hainsworth and lawyers Gibson & Co share as a distinguishing characteristic that they are among the UK's oldest family businesses, founded in 1858, 1783 and 1715 respectively. But they display other common features, too.
Foremost is that it is innovation and quality, rather than heritage, on which they place their confidence in the future. Old they may be, but they are not old-fashioned.
From Hainsworth's latest product range - wool coffins - to Cottam Brush's collaboration with Chinese scientists on pipeline inspection technology or Gibson & Co's international financial services litigation expertise, all three have put sustained effort into developing new products and markets. They have all pulled off the difficult trick of building on existing expertise by exploring niches in which they can differentiate themselves to carve out a distinctive presence. This was crucial for survival: the number of UK brushmakers, notes 83-year-old George Cottam, has shrunk to about half a dozen from 600 since he joined the business in 1949.
All three have put dynamic younger family members in charge - at Hainsworth not without considerable trauma involving a period with non-family managers who presided over rapid diversification and rising debt - while retaining the in-volvement and goodwill of older members.
Cottam Brush is a model in this regard, enjoying hands-on participation across three generations. Ben Cottam, 31, the sixth generation, is managing director; his father David is chairman; and grandfather George, the one-time fourth-generation MD who rescued the business at its most vulnerable juncture in the late 1940s, is a board member.
George and then David took the view that once the next generation is deemed ready to lead, it is vital to stand back. "Ben has had ideas I've had doubts about," says George. "And many times he has been proved right."
For his part Ben, who gained a mechanical engineering degree before joining the family business, is mindful of the onus on him to take Cottam Brush into new markets. "The big thing my grandfather did was get us into the Ministry of Defence," he says. "My father started getting us into oil and gas. It's my turn to find something new."
Continuous adaptation, keeping alive the entrepreneurial spirit and maintaining an ability to refresh the strategic vision, are key to the survival of very long-lived businesses, says Grant Gordon, director-general of the Institute for Family Business. "Business cycles are getting shorter and shorter," he says. "These businesses have had to adapt." Other key issues are planning intergenerational transition and handling conflict.
Mr Gordon, himself a former senior executive of William Grant and Sons, the Scottish drinks business now chaired by a member of the fifth generation, is co-author of Family Wars , a book full of warning examples and sound advice about handling family fights. Conflict can be good, he says, if correctly channelled: "It's about listening to and respecting other people's point of view."
Cottam Brush and Gibson & Co have maintained direct lines of suc--cession, in Gibson's case twice leaping from grandfather to grandson. This makes 72-year-old Tony Gibson, the senior partner, the 11th generation and his son Toby, joint head of litigation, the 12th. "I'm very proud and rather amazed," says Toby. Trust and flex--ibility, he adds, are key advantages of a family-run business.
Hainsworth, in contrast, en-dured a grim period in the 1990s when no one from the family stepped up to be MD. Under outside management, Hainsworth plunged into the leisure sector; complexity grew and debt rose to £3.5m. The company's bankers stuck with it - cordial long-term relationships with banks and employees are another feature of long-standing family businesses - and the younger Hainsworths, galvanised by an experienced outside chairman, rallied.
"We should have been a lot more aggressive," says Adam Hainsworth, 47, now sales co-director with his sister Rachel, 46. In a "night of the long knives" the outside managers were removed. "We learned about family unity," says Mr Hainsworth. The business was returned to profitability under the management of four family members, inc-luding Adam and his cousin Tom, 43, who later became MD. A first cousin, Roger, is woollen director.
The business regained its focus on textiles, meeting specialist markets and investing in technical research. An established ex-porter, Hainsworth will dispatch its first overseas woollen-coffin shipment to the US next month. This product line will be "absolutely enormous", says Adam.
For manufacturers, contraction in UK capacity was very evident by the late 1970s; for legal services it is the past decade that brought an acceleration of mergers and takeovers. Gibson & Co has dec-lined acquisition overtures. "They didn't have high enough standards," says Tony Gibson. The business's traditional strengths in conveyancing and private client work have been greatly strengthened by the arrival in 2003 of Toby and his wife Jane, both with City and Honk Kong experience. They now offer international financial services litigation, in competition with the London big league, but at Newcastle prices.
All three families hope their businesses will continue but the younger directors in particular are cautious about imposing expectations on their children.
This means that Francis Cottam - the first seventh-generation male and Ben's first child - has plenty of time to decide. But then he was only born on July 28. "It will all depend on circumstances," as great-grandfather George says. "You don't know what will happen in 20 years' time."
Families that change with the times
Makes brushes for pipeline maintenance, industrial, janitorial and painting use. Founded in 1858 in Sunderland by Samuel Cottam to serve local shipyards and coal mines - all now defunct. Moved two years ago to smart new factory seven miles away at Hebburn, Tyne and Wear. Employees: 32 Turnover: 2008-09 £2.4m. Exports: 23 per cent.
Founded in 1783 at Farsley, near Leeds, by Abimelech Hainsworth. Home-based handloom weavers made cloth; "Old Bim" transported it to Leeds Coloured Cloth Market. 1800: Buys land and founds own mills. 1869: Power looms introduced. 1882 "Young Bim" founds Temperance Mill, near Leeds. 1889: Starts weaving worsted fabric; expands into Spring Valley Mills, Hainsworth's site today. Survives century of wars, fires, floods, premature deaths and textile sector contraction. Becomes a vertical, fully integrated woollen textile mill, from raw wool to finished cloth. Also moves to new heat- and flame-resistant fibres. Products include the Woolsack in the House of Lords - covered in Hainsworth cloth; snooker and pool cloth, luxurious interior fabrics, protective fabrics for emergency services, wool coffins. Employees: 195 Turnover 2008-09. £15m; pre-tax profit £1m. Exports: 40 per cent.
Gibson & Co
Founded 1715 in Hexham, Northumberland by Jasper Gibson. England's oldest family-run solicitors' practice; offices in Hexham and Newcastle. Richard Gibson said to have been Master of the Tents for King Henry VIII at the Field of the Cloth of Gold. Business lines today: residential and commercial conveyancing; private client work; financial services litigation including commercial dispute resolution in complex areas. Employees: 25, including five partners (four Gibsons). Turnover not disclosed Exports are 20 per cent of turnover.
To see pictures from the three families' archives, go to www.ft.com/generations
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