It’s a family affair

It’s a family affair

Family firms may account for more than 60% of all companies in Scotland but politicians need to do more to understand their dynamics, as Scottish Family Business Association chief executive Martin Stepek tells Karen Peattie.

Anyone who knows Martin Stepek will already be familiar with his story – his many and varied business activities, his deep-rooted involvement with the influential Scottish Family Business Association (SFBA) and his family history, which can be traced back to Podkarpacie in south-eastern Poland and is, at times, harrowing when he talks about his relatives who were deported to Soviet labour camps by Stalin in 1940. Today his task is to shed light on the many challenges facing Scotland’s band of family businesses.

First though, he takes pleasure in perusing the lunch menu in Gamba, Glasgow’s premier fish restaurant. As a first-time visitor and vegetarian, he’s not disappointed, opting for the barley, asparagus, garden peas, parmesan and pesto risotto. It sends him down memory lane and he can’t resist reminiscing about growing up in a household with its own vegetable garden, where the fresh peas “rarely made it to the table because we ate them out of their pods while we were picking them”.

Returning to the reality of a dreich November day, Stepek – dressed in his trademark casual attire – gets down to the business in hand. He is, of course, chief executive of the SFBA, a highly-respected trade organisation that serves a very specific market and which he co-founded in 2006 to bring global best practice to the sector. “Consider this – 63% of all businesses in Scotland, or around 60,000, are family-owned, yet the Scottish Government has no direct plan for this,” he points out.

“So the idea that you can create policy on how to help family businesses progress when you don’t understand the dynamics of how they operate or the challenges they face around the boardroom table just isn’t sustainable. Family businesses have a unique quality because you may have what on the surface is a successful business yet behind the scenes there is chaos.

“If your son or daughter doesn’t come in to work until after lunchtime because they’ve been out partying then you’re not going to sack them, so what do you do? How do you address that? If you behave like that when you’re an employee of another firm then there are clearly going to be serious consequences and strict procedures in place to deal with it, but for many family businesses that’s just not the case.”

So does the Scottish Government recognise that family businesses play such a key role in the economy? “Yes, but they just haven’t quite worked out how best to collaborate with us,” he continues. “I think the greatest problem is that no-one really fully understands the role of the family business in society and that is something we must address. The Scottish Government needs to recognise the family business sector and consider its needs when thinking about policy.”

Asked if there is sufficient help and advice out there for family businesses, Stepek’s answer is straight and to the point. “No,” he states.

“I accept that Scottish Enterprise and Business Gateway do a great job, but they don’t employ family business experts – there’s a big difference between a small and medium-enterprise (SME) expert and family business expert. The advice an SME expert can provide won’t be wrong, but it won’t be targeted at the diverse and very specific range of problems faced by a family business.”

Again, Stepek doesn’t knock the general services available to small businesses. “On the whole they’re very good,” he says. “What I’m highlighting is the lack of specialist advice. Mainstream consultancy is widely available but that doesn’t offer a specialist skill in dealing with family businesses. If you are a Scottish Enterprise-managed account then it can help you with general business issues but not necessarily family issues – and those can be the core underlying issues holding you back in business.”

Stepek stresses, however, that family businesses need to do much more to help themselves. “They can’t just sit there waiting for a knight on a white horse to gallop to the rescue,” he says. “There’s never going to be a fairytale ending for any business – and I know that myself from my own experiences. We all have to work at it and find solutions.”

Growing to become one of Scotland’s top 500 companies, Stepek was a Hamilton-based chain of 20-plus electrical appliances stores that diversified into the travel agency sector. A household name, the firm – founded by Stepek’s father Jan and Scots mum Teresa – achieved fame across central Scotland with its legendary TV adverts with fellow retailers Glens, Hutchison and Robertson.

Stepek himself eventually became co-owner. But, in 2002, it succumbed to the same afflictions that destroy many family businesses. “There are many issues that can lead to paralysis in decision-making,” he points out. “A family business is a very difficult place to be when things are not going well but what I have learned is that there are ways to resolve any problem – and that is why the SFBA exists.

“If you look at a lot of family businesses, they’re like Dallas or Dynasty, with big egos, dynamic personalities, quiet ones doing great work behind the scenes and those who want the rewards but aren’t prepared to put in the hard graft,” says Stepek. “Every family business has to decide what everyone wants from it – do you want to come into work every day, what role to do you want to play, where do your individual strengths lie?”

For Stepek, the solution for Scotland would be to have a pool of experts specialising in family business to go into individual companies and work through their issues, or help them move on to the next stage of their development if there are no significant family-related problems.

“There are only around 50 specialist family business consultants in the UK,” he points out, “and they have the skills and processes in place to go into a business and explore the underlying issues that are holding it back.

“It’s not rocket science. Every family business is unique. You might have mum and dad and three children – the parents want to slow down in their later years but are concerned their kids aren’t up to the job. You might have a business where there are three or four branches of the family involved with varying abilities – that’s a real challenge.

Over half of family businesses in Scotland are still controlled by the founding generation so they need to be looking at succession planning, too.

Martin Stepek 02

“Not one family business possesses the same dynamics because there are different generations and therefore different views on life. A twenty-something will likely be a technical whizz-kid yet the managing director may still be struggling with the TV remote control, then there could be a branch of the family that doesn’t speak to another because of something Auntie Jessie said back in 1963. And when you bring in-laws and spouses into the equation…”

Stepek believes that some of the most successful family businesses are those in which the up-and-coming directors have gone out into the workplace and learned other skills then returned to the fold armed with new ideas and a very different perspective on life and business. But getting to that stage can be a challenge in itself, he says, with an individual often resenting the suggestion that he or she needs to gain broader experience in order to help them be better at their job.

For Stepek, the solution is often to go back to basics. “Sometimes all you need to do is talk to each other,” he says. “You might have found yourself in a marketing role and absolutely hate it yet have you told anyone this? Have you admitted to yourself and your family that you’re a useless sales person? They might know that you lack the skills but haven’t been brave enough to tell you. It’s all about honesty and relationships and looking after each other.

“With the right advice and guidance you can quickly focus on the issues and move your business to a better place. It’s about reconnecting with what is most important.”

Stepek quickly moves on to how it can be “almost a revolution” for a family business when someone with specialist experience goes in as a consultant. “It’s a brave thing for a business to do because they aren’t necessarily going to like what they hear,” he says.

“It can be hard for the consultant too when they have to tell the owner’s son or daughter that they’re not fit for the job or not of adequate calibre to take over the running of the company. But there are ways round it if the individual is prepared to get out there and experience life outside the business for a spell.”

Happily, Stepek is in a position to report on many incidences in which he and his colleagues at the SFBA persuaded members to do just that. “When your parents have built up a very successful business, there is obviously pressure on you to meet their achievements and expectations,” he points out. “But that pressure can be a millstone around your neck and it takes a very special and committed individual to rise to that challenge.

“Some family businesses just don’t know who to turn to and that’s a problem for our sector.

They might go to their bank or accountant for advice and there’s nothing wrong with that approach because they have a trusted relationship with them but they are not family business specialists.”

While Stepek’s own business philosophy dictates that he would only work with someone who shares the same business and moral values as himself, he appreciates that not every business is in that position.

“There are a lot of egos in family business, a lot of people who don’t or won’t accept that they have failings – even small ones,” he says. “That’s one of the reasons I only want to work with people who share the same values as me.”

He points to Wright, Johnston & Mackenzie. In another string to his bow, Stepek joined the Glasgow-based law firm in 2014 as director of culture and communications with responsibility for overseeing a sustained, agile and holistic approach to the company’s culture, people and priorities.

Stepek is an acknowledged expert on “mindfulness” and a qualified practitioner of the ancient Buddhist practice, which focuses on ways to clear the mind and help us go about our daily lives without feeling so stressed or tired. “It’s not always easy to explain what mindfulness is but it’s easy to stop noticing the world around us,” he says.

“It’s easy to lose touch with the simple things like enjoying a nice lunch like this – if you’re constantly checking your mobile phone or your watch, you’re not going to appreciate the food and the company.”

On that note, this fascinating and inspirational University of Strathclyde law graduate who never stops learning and writes every day – he is a published author and poet – moves on to the next appointment in what is surely one of the most packed diaries in Scottish business.

Gamba

Gamba

In 1998, chef Derek Marshall had a concept for a restaurant that would let produce speak for itself. So he co-founded Gamba. Fast-forward almost 17 years and he is now the sole owner of what is one of Glasgow’s most popular fine-dining restaurants. Gamba, hiding away in a basement in West George Street, is one of those restaurants where the service is friendly and attentive but not overbearing. Simple décor with tables that allow plenty of privacy are always welcome but it’s the food that does the talking here. Elegant yet unpretentious, the award-winning fish soup is legendary and Marshall’s passion for sourcing and delivering the best produce – with his fish sourced direct from sustainable stocks and then cooked using the freshest, seasonal ingredients – keeps people coming back again and again. Menus are updated every six weeks or so, yet staples such as Isle of Gigha halibut, lemon sole, monkfish and Marrbury Scottish smoked salmon can always be found on the a la carte menu, along with a good choice of vegetarian options. The lunch menu is priced, at £19 for two courses and £22 for three. Gamba was the first Glasgow member of the Sustainable Restaurant Association and supports charities including The Fishermen’s Mission, Cancer Support Scotland and the Marine Conservation Society.

Gamba, 225A West George Street, Glasgow G2 2ND, 0141 572 0899,
www.gamba.co.uk