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Family Values are the Foundation: Ingrid Faber interview

02 Nov, 2020 | published at 12:42 CET

Family businesses capture the imagination because of the deep-seated responsibility to continue the family legacy. Despite that touch of romance, family businesses are also faced with difficulties. What do insiders see as the advantages and disadvantages of this business form and what do they perceive as the main differences with non-family businesses?

This article was first published in Management Scope – October 2020

In corporate Netherlands and beyond, the popularity of family businesses is growing. They are often a beacon of calm, hardly bothered by panting shareholders who want to see results in the short term, and are strongly committed to values ​​and stewardship. Family businesses are not based on quarters or years, but on generations. The stories of family businesses are often extremely compelling, with a hint of romance. That certainly also applies to the companies featured in this story.

Ingrid Faber heads the Faber Halbertsma Group, a family business that rents out pallets. Her grandfather started out with the production of butter barrels and later switched to the production of pallets under the direction of her father. Now Faber's pallets go all over Europe; with 500 employees, the company has an annual turnover of 300 million euros.

A focus on the long term, stewardship and a value-driven way of working are often cited as essential characteristics of family businesses. Is that your experience too?

Ingrid: “I can illustrate that involvement with an example: when we started renting out pallets to retail suppliers more than 20 years ago, things did not go well at first. We assumed short-term start-up losses. But after three years, we still did not write black numbers. Still, as a family, we firmly believed in our market opportunities and decided to give it another chance. It wasn't until two years later that we finally turned a profit. Now this activity is the cornerstone of our company. If we had been a listed company at the time, we would never have been given that time.”

The companies you manage or supervise have all made necessary acquisitions. How do you integrate those acquisitions into the value system of your own family business?

Ingrid: “That becomes more difficult as the size of the company increases. We recently acquired a German company. I now visit there every month and we have consultations in the meantime. This close contact stimulates and facilitates the transfer of our values, without mentioning it explicitly.

“We also hire new employees based on those values. For example, we think entrepreneurship is very important, and the drive to always put our customer first. I learned that from an early age. When I was 13, I went to clean toilets in our production halls during the school holidays. As a student, I could come home on Friday evening, go to the factory at 10pm to finish an order, and then work until 6am.

“We all did it, we thought it was quite normal. After all, you are always ready for the customer, day and night. Employees see that we as a family find this very important. By taking the lead themselves, everyone gets our values. But as our company continues to grow, it is more difficult to do so and it is important that we communicate more clearly about our values.”

What do you think of the view that family businesses are not always agile, lack decisiveness or have difficulty finding suitable successors?

Ingrid: “I don't believe family businesses are anxiously sticking to old business models. If something like this happens, it is because management has too little eye for innovation, and that can of course just as well happen with a listed company. The point is that in a listed company a supervisory board can intervene if the management does not implement enough innovation. In a family business there is not always a supervisory board present to monitor this.”

“When it comes to those roles, I always think of the following image: I see the family business as a house. There is one chamber for the board of directors, one for the supervisory board, one for the family and one for the shareholders. When you are talking about family matters, it is not possible in the room of the supervisory board or of the shareholders. If you visualise it in this way, it quickly becomes clear which problem you should discuss with whom and especially who you shouldn’t. In general, as soon as the roles are mixed, there is a great risk of conflict.”

In family businesses it is sometimes difficult to find the right successor and transfer the shares without conflict. What are your experiences with this?

Ingrid: “I remember a successor in a family business where there was a lot of trouble with his father. His mother had to be involved to take on the role of mediator. He explained to me that there were actually two CEOs within his company: a chief executive officer and a chief emotional officer. The second was thus responsible for the emotional side of the company. I think that's a great find.”