How big can a family business get?

The client
Our client on this assignment was a leading family retail chain that had made impressive progress in the value for money market, which its competitors had somewhat ignored for as long as over twenty years.  This caused the middleclass market to immediately connect with our client's brand, which connection quite quickly translated to very strong brand loyalty.
Like many family businesses, this client was faced with a real test when their growth demands outstripped their family resources.  Not only was the business struggling to self-finance, mainly through family assets-secured credit, the business had also got to a level where it could no longer remain the closely-knit family operation it always was.  Non-family employees were by far now the majority in the business and were presenting many challenges relating to the management of labour.
With operations in over ten locations across the country, each unit was faced with different challenges relating to the management of its local circumstances, as well as the efficiency with which it was relating with head office, where the family-led leadership was based.
Above all, the client needed to enhance technical competence in various key leadership roles across the business.  This was a tough call for the family, and the business, since it was clear, in most cases, that the family members in those roles were not the ideal fit and the family would need to give up the business to adequately competent and experienced persons at the height of its growth.
Client requirements
The client needed to establish a suitable operating model that would effectively support  the company’s growth through the transition it envisaged and beyond.  The client's specific needs were varied, ranging from governance, management, compliance, to technology and operational efficiency.  Thankfully, one of the things that the client, had enough of, was cash and so the business was very secure financially.
This situation that the client was in is a common and almost predictable stage for small to medium size businesses SMEs, and how it is resolved frequently determines whether the business survives or dies.
Our approach
We worked with the client to develop an overall strategy within which all other dimensions of the business were integrated, with specific performance targets set in the following areas:
1.  Governance
2.  Operational management
3.  Compliance
4.  People management
5.  Supply chain management
6.  Risk management
Significant outcomes
The client was able to achieve 85% of set targets over a three-year period, and successfully averted the failure that would otherwise have beset the company.  The client subsequently maintained its growth trajectory as well as consolidated its hold of the value-for-money market within its sector for ten years straight.
ARTEMIS Transition Partners

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