There are few firms that have survived three generations of family ownership unscathed. Engineering firm A E Harris has done so and also battled through ten recessions. How did it do that?
The evidence suggests that the added value from family ownership diminishes in impact after two at most generations from founder to son or grandchild. Few firms survive into the fifth or sixth generation of family ownership, although European examples are perhaps more common than American, where market dynamics have tended to increase the proportion of firms succumbing to takeover or worse.
A powerful example from England is that of relatively small manufacturing firm A E Harris. Its survival for over a hundred years has seen it outface ten recessions, according to its current chairman Russell Luckock. He should know, he has been its leader for over fifty of them, taking over as a young man of 21.
He told The BBC about his experiences
“The company was founded 128 years ago by my great-grandfather just near the same central Birmingham site that we occupy today. The firm started out making hand made jewellery and tool making equipment and has gradually expanded to the company I run today. I started out at the firm as a favour, helping out for a few weeks, but I stayed on a bit longer and have now been here 53 years. It’s important to realize that you get a recession about every 10 years and each and every one you go through will be different …”
The seventy four year old leader sees a recession as a time requiring drastic and painful cost-management but also a time of seeking new kinds of business. He has recently been forced to cut back and close down unsuccessful sites, but the company survives.
I don’t think Mr Luckock would see himself as an example of servant leadership, but he captures some of its characteristics, such as a strong sense of duty and responsibility to his employees. He talks of fighting tooth and nail to save jobs, but has made the adjustments if needed for survival of the rest of the company. For example, in the last decade the business shrunk from nearly 200 employees to around forty, against competition from the Far East.
There are some parallels with Warburtons, another example of a UK family firm, and one that has survived into its fifth generation of the family.
This kind of firm is, arguably, an extended family, with strong family values. Survival through a tenth recession can not be guaranteed, but A E Harris has as much chance as any as it takes on its tenth battle against such tough economic conditions.
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