A lack of succession planning is the number one reason family-owned businesses fail to survive. But for those who intend to pass on the business to the next generation, assumptions about how the transition will work without clear communication and an agreed structure can have a devastating effect on the business continuity and personal relationships. In 2010, Gavin Howarth started working at his family business, Howarths, an HR and employment law firm. In 2013, Gavin became the Managing Director, following many open discussions and careful planning. His parents subsequently implemented the transition of ownership to Gavin, which saw him become the majority shareholder. As a NextGen leader, Gavin has had to find his own management and leadership style to remain authentic, feel confident, maintain a good relationship with his father, and build on the values that created the business. In this episode, Gavin shares his experience so that other businesses can thrive.
A lack of succession planning is the number one reason family-owned businesses fail to survive. But for those who intend to pass on the business to the next generation, assumptions about how the transition will work without clear communication and an agreed structure can have a devastating effect on the business continuity and personal relationships.
In 2010, Gavin Howarth started working at his family business, Howarths, an HR and employment law firm. In 2013, Gavin became the Managing Director, following many open discussions and careful planning. His parents subsequently implemented the transition of ownership to Gavin, which saw him become the majority shareholder.
As a NextGen leader, Gavin has had to find his own management and leadership style to remain authentic, feel confident, maintain a good relationship with his father, and build on the values that created the business. In this episode, Gavin shares his experience so that other businesses can thrive.
Guest
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Gavin Howarth: At the end of the day, for me personally, I feel hugely privileged to even have the opportunity. To work with my parents was already a massive bonus. I try and keep as much perspective as possible. In times when that stress is coming hard and the emotions are bubbling up and you're feeling that tension, which is bound to come in succession discussions, I sat back and thought, "Well, we're not doing bad here. We're doing all right, aren't we, between us," and that is the truth. We are.
Natalie Wright: You are listening to the Exploring Family Business podcast brought to you by Mazars. I'm your host, Natalie Wright, head of Family Business at Mazars UK. Having worked extensively with family businesses for a number of years, I'm keen to support this valuable sector of our society. At Mazars, we believe there is nothing more personal than a family business. Every family and every business is unique. We look forward to sharing knowledge, insights, and practical tips for those navigating the unique issues that arise from being in business with family.
Now on with this week's show. Hello, everyone, and welcome back to the Exploring Family Business podcast with Mazars. Succession planning or more specifically, a lack of it, is the number one reason family-owned businesses fail to survive. For some families, there is a conscious decision to bring family ownership to an end, whether that's through an external sale of the business or by engaging the widest team of employees who can ultimately become the owners.
For those who intend to pass on the business to the next generation, assumptions about how the transition will work without clear communication and an agreed structure can have a devastating effect on the continuity of the business as well as personal relationships. In 2010, Gavin Howarth started working in his family's second-generation business, Howarths, the HR and employment law firm based in West Yorkshire.
The business was founded by his parents in 2003, following his father's 30-year successful career in the police falls. In 2013, Gavin became the managing director following lots of open discussions and careful planning. His parents subsequently implemented the transition of ownership to Gavin, which saw him become the majority shareholder.
As an external leader, Gavin has had to find his own management and leadership style so that he could remain authentic and feel confident whilst allowing him to maintain a good relationship with his father and build on the values that created the business. Now, one of the most active members of the family business community on LinkedIn and in the region, Gavin is passionate about sharing his own experience and supporting other business leaders so that their businesses can thrive. Hi, Gavin, thanks for joining us today.
Gavin: Morning. No problem at all. I'm looking forward to it.
Natalie: Brilliant. Thanks for giving up your time. I think it might be useful actually if we just start as well by saying we're not going to cover the backstory to how the business got started today and that first 10 years, I guess, of the business running because you've recently done a brilliant episode for Family Business podcast that Benjamin Brain interviewed you for. I thought that gave some brilliant insights of the last 19 years.
I will include a link to that episode in the show notes, actually, but there were some key points in that episode, which you, your father, Andy, and I discussed recently as well. With the theme of our third season of the podcast, being about that transition from now gen to NextGen, I think it will be useful for the listeners if we homed in on that transition of ownership and also, your role as a leader if that's okay.
Gavin: Yes, no problem. The juicy bits.
Natalie: All the juicy bits everyone wants to hear. I understand you and Andy, your father, you always worked on the basis that you would come into the business and with a view, I'm guessing at some point, to take over, but did you expect to be the managing director at 27?
Gavin: Good question. I suppose I hoped that might be the case. I think as a family, we had a collective ambition, vision, dream if you like, that we could achieve succession, but as you know better than anyone, there are no guarantees of that. There's a lot of water that has to go under the bridge before you get there. Yes, we talked about the business very early on when I was young and particularly in mom and dad, my life in their careers, we talked about the hope that we could achieve success and that would it work for us all and I'd step up and be managing director.
I was very ambitious when I was younger. I still am now, but I was very ambitious and wanted to push on and get to the top as quickly as possible, I suppose. I hoped that that that would happen. I suppose I always try and view it, the age is only a number, there's no barrier, if your dad has always said to be fair to him, if you're good enough, you're old enough. Mom and dad were very gracious in that respect and it just worked. Irrespective of it sounding quite young, it was the right thing for all of us, I think.
Natalie: I imagine it's a lot of responsibility, but also, quite an exciting time to be able to lead a business, I'm guessing. Take over from your father, but still have there as well to support you.
Gavin: Yes, exactly right. Like I referred to earlier, well, I'll speak for myself rather than anyone else, but in my 20s, I'm thinking I'm the king of the world and the best businessman going. I remember I was pushing and knocking at the door I think before I was 27, with all sorts of ideas and things that we could do and how I think it should be done. Dad was probably getting sick of me actually as time went on. Then I became an MD at 27. In our first year of my becoming MD, we had quite a good year, quite a good financially successful year.
I remember at the end of that year, going to mom and dad and saying, "Right, I'm ready to run the show. Pass me the business or let me buy it off you. I'm ready to go. Obviously, I'm the next island sugar here. I'm ready," which is looking back, a bit ridiculous. I'm now 36. I look back at my 27-year-old self and think what nonsense that was. Mom and dad knocked me back rightly so and I proved myself a little bit longer than just 12 months, which was absolutely right.
I suppose it gives a little picture of my ambition. I think as you get older, you realize, that the more you learn, the more you realize you don't know and become a little bit wiser. I do look back cringing a little bit [laughs] at that. Then again, it's the same. The other side of that coin is it's that ambition and self-belief that you need to be able to run a business. There's no doubt about that, so it's not all bad.
Natalie: I guess from what you've said there as well, it's creating that balance, isn't it, between giving the next generation that opportunity and allowing them to maybe fail sometimes as well. Knowing that you are there to support them, not that you're just going to swoop in and say, "Right, if things go wrong, oh, we'll make everything all right," but as you said, you had a great year.
Wanted to do everything, take it over, and lead it, but actually, having your dad there to give you some sage advice around, "Well, there will be some tough times ahead. It's not always plain sailing," I imagine that was really valuable.
Gavin: Yes, absolutely. Of course, mom and dad have got their own financial ambitions and wants and needs out of the business. It has to be right for every party involved in the transaction and the relationship. Yes, it's great for me to have that support and to have mom and dad in the background. Although now, they're not technically a part of the business, they are in lots of ways. They are the biggest stakeholders in the business and are still involved, which I'm sure we'll get them to.
I've become a father myself in the last four years to a couple of children. It is difficult, isn't it, letting them have their head and not intervening and not doing things your way and letting them fail and letting them fall over. It's all the same analogies in business are true and especially when it's the business was essentially mom and dad's baby. I come in have these ideas, some of which they may have tried themselves before or not believing, and also I'm their son, eldest son. Allowing me to have my head and sit back and see that happen, I think must be very difficult.
I appreciate only a small part of it now having my own children but must be hugely difficult, but to be fair to mom and dad, they've always been absolutely brilliant in that. Dad still says that he's a thorn in my side and that those are his words. He does have his two penneth every now and then, which is absolutely natural and absolutely fine, but in the main, brilliant.
Natalie: That transition then from, I guess, minority to the majority shareholder, it happened over a number of years, I believe. Can you talk me through how your roles changed over that time in terms of leading the business, but also maybe how your relationship has evolved with your parents as well during that period?
Gavin: I think the conversation around succession probably took the best part of five years. It was something that we would touch upon, have a little conversation, and then it had quietened down for the three, six months. Dad got cancer in between, which is a very scary time for us all. We've had COVID as well in between that. It took us many years to achieve succession.
My role has changed significantly throughout that time. I qualified as an employment loss lister, joined the business advising SMEs on employment law, and incrementally, over time, I'm in a position now where I don't do any advisory work and I just lead the business. Lots have been tricky. My role changing, becoming off the tools, if you like, and into working on the business. I've had some real moments navigating that. My relationship with my parents has always been really strong. We're a very close family.
We speak very openly, which I think is really important. We did have some difficult moments in those early days. There are no two ways about that. When you're talking about finances, personal ambitions, business, all that type of stuff interlaced with personal relationships, grandparents, grandchildren, going for tea after work. All that meshed in together.
It can become complicated and what might just be a very normal business statement to someone else suddenly takes on a lot more weight when it's to a family member and with parents in my case. We had some tough times in the beginning, but I think what we did well is take our time. We were very-- I suppose, it's not a word you'd associate with business much, but very gentle with each other and with the timing and patient.
When people needed any parties to the transaction needed space to come to terms with a certain proposition, our idea emotionally get used to it. Then we'd allow that time and space, which I think was really important. If you were selling to a third party and it was a trade sale and you sat across the table and it's transactional and each party's just trying to get the best, whatever they want out of it in the best deal, whereas it's very different in our case. It was much more thinking about the other party, actually.
I think we were both very, very conscious and very, very considerate of what the other party wanted. Dad said a few times, that he never wanted to overcharge me, if you like, as a son. I never wanted to not give mom and dad their fair deals for the business, so we were always very considerate of each other's needs and took our time, which I think paid dividends in the end.
Natalie: I think that's a really valuable point actually to touch on that, and we won't talk specifically about the numbers at all, but if thinking about the financial side of the transaction, because a business doesn't usually change hands for free and clear, if there's a third-party buyer, then there's an element of competitive tension there when it comes to the value and things, but were you looking at both sides balancing their objectives?
In this case, parents to exit and support whatever they want to do next in life, but then, you need the right figure to work for you personally because you are taking on the risk then and also the business, but also be mindful that you have to sit down at the end of the day, perhaps have dinners together all around a table. How did you go about approaching those discussions then around value and that mechanism for the funding of their purchase of the shares?
Gavin: Incrementally, bit by bit. In context, neither of us has done anything like this before. Neither of us has bought a business or sold one or been in any transaction like that. I suppose we were quite green in that respect. What we actually did was involve our company accountant and the accountant my dad used when he settled the business.
We had two accountants who helped us talk about valuation, how you might do it, and what factors will be considered because we didn't know any of this. The two of them worked together. They've found a relationship as well, but we had the perfect mix, really, because we had very knowledgeable accountants and advice on the tax side and the way to do it.
With having the accountant involved who first started the business, with my dad, it was around at that point, was important because there was a huge amount of trust there and because he understood the journey we'd been on from the very beginning and had been involved in business conversations with my dad back in 2003. He understood the family and the business implicitly. As you say, when you're doing a trade negotiation, it's arm's length. You don't know the other side, or when you're doing a commercial transaction, so emotion can be cut out of it.
"We're here to do a deal, let's get it done." Not like that at all in a family business. You're here to do a deal, but the emotion is huge, absolutely huge. I think everything has to be dealt with very gently, and the accountants did that for us. Just interestingly, we did have a period where we decided to get lawyers involved almost to act on each other's side if you like, and we stopped that really quickly because it made it feel much more acrimonious than it needed to be.
It just wasn't us at all. We tried it, got lawyers involved, and then we got rid of that because it felt very much closing them when really, I and dad really wanted to do this collaboratively and together. In the end, it was essentially me, dad, and mom in the background which we might come onto, and then the two accountants. Then at the very end, we got the lawyers involved, but by then, it was a case of taking to the lawyers, "Here's the deal, we've got it on a spit and a handshake, we're all happy, we've all spent a lot of time coming to this. Let's get it written up now." We took it to the lawyers at the very last moment.
Natalie: I guess giving yourselves that time because you mentioned five years, which some people might be thinking, "Gosh, that's a long period of time." It's not you working on that entirely for five years, but I guess it's from that first seed open discussions. As the business evolves, as you evolve as people as well and start to think about your own objectives, it's giving you that plan and structure that you could start building on.
Then, as you say, when you use the two accountants, they could look at it from facts and figures perspective, I'm sure, talk about the tax and other things and all the practical stuff whilst you could talk between you, what worked for us on a personal level as well as the business.
Gavin: Yes, absolutely. Actually, now I think about it, there was probably-- I'm shooting from the hip and generalizing slightly, but there was probably a two-year period of just the family talking about it. Before then, perhaps, another two-year period of the family and some professional advisors talking about it. Before then, we eventually got it done. Because in those early days, that first two years, you're wrestling with huge emotional concepts.
Now, we didn't get any outsiders to help us out on that, but I can imagine, that some people might need help and assistance on that. Even thoughts of-- For mom and dad, I imagine thoughts of not owning the business which they started, just to sit down and think about, "Right. What does that look like? What do I do after? I'm definitely ready to do with that." If I was, how would it look? "Is Gav definitely ready? Will it work?"
In all these, that takes time. You can't rush those thoughts because as well, the last thing we wanted to do, and we said this quite a few times throughout, is do any deal, get it all signed off, and then anyone is left with any inkling of regret or, "Oh, I wish I'd done that that way," or, "We should have thought that way," or, "Do I feel comfortable really?"
I think if you go at a certain pace and you maybe try and rush the conversation slightly, then I think you're at risk of that. That's all right on a trade sale maybe because it's a commercial transaction. You enter it. As you enter, eyes open, but you don't want that with your family because what we wanted to do is go to the lawyers' offices, have a glass of champagne, and sign off the deal on Wednesday. Then Wednesday night, I'll go around to mom and dad's with my kids and we'll have a meal and I'll laugh and talk about Legion United and the rest of it.
That's what we were trying to achieve is, "Let's do this commercial transaction, but make sure at the end of it, ultimately, we love each other to bits and we've still got a relationship that's as strong as ever."
Natalie: I'm guessing then, the main part of all of this was just that really clear and honest communication between all of you.
Gavin: Yes, absolutely. Yes, that's it. It's been open, honest, clear, and transparent. I said a few times throughout the deal that I would walk away from the business before I fell out with mom and dad and amend now because I back myself to qualify as this solicitor. I back myself to go and get another job somewhere and build a half-decent life for me and my family. I'd do that before I fell out with mom and dad about business because it's not worth it in the long run.
We never needed to in the end, but we did all start from that premise. I think that's important, the values of where we start from as a family was, We're not going to fall about this, fall out about it. No way. If it doesn't happen, it doesn't happen. If it's not meant to be, it's not meant to be, but let's explore it. Let's see if it can work. Let's see if we can all achieve our ambitions and aims." Thankfully, we got there in the end.
Natalie: The other side of the succession planning then, and you alluded to it before, I guess there's an immersive side around the planning where I've seen it with a lot of clients and we've supported them through this in the past of getting to that mindset of what does life look like after the business? What comes next?
That's a big part of the planning, particularly for the generation who are exiting, but from a business planning perspective and thinking about the soft skills that you might have needed to incorporate for the team and for you really moving into that full leadership position, did you get any support for yourself that the wider senior team in terms of being able to allow that transition to happen in a way that gave you the responsibility and leadership role and everyone else to buy into it as well?
Gavin: I suppose yes, incrementally. I think the thing about our journey was I'd been managing director of the business for eight or nine years before we did the actual shareholding sale. I had already been running the business for a period of time and had already been on a journey of learning what it means to be an MD and the skills required and bringing the team on board.
Don't get me wrong. Throughout that journey, I've had plenty of mentoring, and training to try and transition into the role and become the leader that the business needs. I did have the advantage of it not being just to line in the sand, "You are now the owner, good luck." It wasn't really like that because I'd already had quite a few years doing it before we actually made the official ownership transition.
When the ownership transition came and I went to be an 80% shareholder, the majority shareholder, it felt-- There was a change in my thinking, don't get me wrong because you then, "Whoa, wow. It really is on me now because I own the business, the personal guarantee changes," and all that stuff, but it wasn't a huge, huge thing because I'd already taken that leadership position for a number of years before. That did help the transition.
Natalie: You'd talked to me previously about some personality profiling that you and your dad had undertaken, and I'm assuming some other members of the widest team also got involved in it. Could you just talk me through that because I thought that really interesting insight came out of that?
Gavin: Well, that was quite funny, actually. We didn't get the personality profile done to help us achieve succession. We were just doing it anyway, but in fact, looking back, it definitely did, which is interesting. We got these insights, and personality profiling is done, which some of your audience may have heard of. There are plenty of different ones, DISC, and Myers-Briggs, et cetera. The one we did was insights. Me, dad, and Tracey, our finance director, got it done.
Long story short, I came out at, say, a strong blue and my dad came out, it was a strong yellow. Now, on a circle of personality profiles, that puts us at the exact opposite of each other, the exact opposite. The way this model works is the further aware that you are pitched from the center of the circle towards the outside that the more strong you are in those characteristics, let's say. I and dad were both at the far end of each color.
We got this back and reviewed it. It was just so interesting because, in my profile, it would talk about how to speak to someone who is at the opposite end of the circle from you, which would be my dad. Bring it to real life. My dad is yellow. A yellow would be an inspirational storyteller, perhaps, that moves from one subject to another quite quickly and quite exuberant and all that type of stuff.
Blue, quite boring, actually probably, but very methodical, detail process, that type of stuff. A lot of lawyers tend to be blue for that reason. You can see there, that there are two opposite ends of the spectrum. When I would have a conversation with dad, I'd go into the conversation and into his office and be ready to talk in a way which was very ordered, methodical, I want to do the detail, et cetera. Dad's coming probably from the opposite. I'd go in and sit down, "Oh, dad, I just want to talk through this issue," and start talking about it in order.
Dad would be like, he'd listen to me a bit first point, and then say, "Anyway, Gav, you want a cup of tea while we're halfway through this? Let's get some and did you-- Legion United at weekend? Let me just quickly talk to you about another subject that we're talking about," and whatever it is. "Very inspirational, very storytelling." Then he'd go and tell me a story, which is really funny and I enjoyed, we want anything to do with what I'd come in for.
That personality profiling raised our awareness of that's just the type of people we are and vice versa. If dad comes and speaks to me, he might apply that model and I'd be like, "Oh dad, just tell me the detail, what exactly in this order and so I can get it in my mind and be very methodical about it." Once you understand that and appreciate it, then it makes the way you communicate with each other much easier because if I'm going to go speak to dad, I know that's going to be the case and I can be relaxed about it.
I can find other ways of having the conversation the right way and he knows as well. We've now found a rhythm with each other where it works perfectly despite us being on opposite ends of a personality spectrum. I think in hindsight, whilst we didn't do it deliberately, that helped us on the journey to succession. It really did because we had that awareness and openness with each other.
Natalie: Just what you've said there about the awareness, thinking about succession planning discussions and how emoted they are, if you have that awareness to think about how the other person might interpret information, whether you're talking about a decision on a day-to-day basis or those bigger decisions about who will earn the business, who's making decisions about where we're going in the future, it must have been incredibly valuable now when you look back.
Gavin: Definitely. There were moments when dad would know, for example, if he said something to me about the deal. I'd need 24 hours to think about it. I won't react, I won't do anything. I need to go home, sleep on it, and in fact, dad's quite similar in that respect. Well, again, if you know that, you're aware of it and you cater for it and you work around each other and you understand that like you said, people think in certain ways and need certain things to be able to process the information.
I think the more self-awareness you can get, for one, and then the more awareness of the other people that you're working with, for two, it's just bound to help the whole transition go smoother.
Natalie: What you've said as well about the differences in personalities that I often do hear that when we're talking with the second generation of family businesses as well, particularly when the thinking about founding generation, they started the business, usually, that entrepreneurial spirit that they see it, they live it, they breathe it, and what you often find is then second-generation thinking, "Do I have the right skillset? Am I going to be entrepreneurial?" because obviously, to get it off the ground, that had to be there at the start though there was some inherent risk.
Have you ever found yourself in that position where you've looked and you found obviously quite different personality types in the way you go about things? Did that make you question how you might lead moving forward?
Gavin: No, probably didn't have worries about that per se. One thing I've said a lot and I'm very aware of is that dad, I would regard, and mom as well as very entrepreneurial. Dad's had a couple of businesses since and there are some entrepreneurial spirits. For dad, I joke about it, but the harder and more impossible something seems, the more excited he gets and the more he wants to do it, prove people wrong and launch things. He almost needs it to be difficult to get out of bed and engage him.
I've got so much respect for mom and dad and any other entrepreneurs who can go out and against all odds, the financial backing, the risk, the worry, all that. I've said to dad a few times, "I'm not sure I could have done that." I just don't know if I'd have had the gumption to go and risk it all and take those risks.
I've learned a lot from watching dad do that and do it with Howarths, but then do it with other businesses as well. By the same token, growing a business from a small business into a more medium size, and then hopefully touch wood, a bigger one, that requires a different skill set again as more strategic and processes, systems, people, and all that type of stuff. I think that I'm certainly more suited to that, I think than entrepreneurial. In a way, I think we're lucky. We're lucky that we have those traits.
That is what I would call the entrepreneur. I've since come on and maybe helped with the leadership part of it. Well, we were lucky, I think, to have those two contrasting skill sets, I suppose. I think we've probably both learned from each other a lot, but certainly, we have a dad.
Natalie: Thinking about people who aren't necessarily at the forefront of the business on a day-to-day basis, at least from other people's eyes, I'm thinking more about your mom here because obviously, a lot of people will say, "Have you learned this from your dad? How did you and your dad work together?" What role did your mom play then as you move through that transition and also supporting your dad as he had to learn to take a step back on the day-to-day?
Gavin: Left the business, the substantive role, soon after I joined, I don't know if that would deliberate actually in hindsight, well, actually, I have a huge crossover between us.
Natalie: Was that in 2010? Sorry, then was that.
Gavin: Yes, not long after that. Mom would come out of the business, the substantive role and then I'll say why I keep referring to it like that because she came away from a substantive role as FD supporting dad with the numbers, took a big step back, and did her own things away from the business, but she remained heavily emotionally connected to the business. During the succession and the transition, I think it's fair to say that mom probably found it more difficult than a dad with the family element.
I think me and mom, maybe between us, found it quite difficult to talk about business, whereas me and dad, maybe more naturally. Dad was still in the business. We'd got into a rhythm of young bull and old bull, and we'd find ways of talking about business and separating the two. We managed to do that quite well. It was more difficult when mom because I don't know, maybe a mother-son relationship. Mom would often find it difficult to talk business, and I would as well.
He often came through dad, which put dad in a difficult position sometimes. Mom was very-- As you'd imagine, it was her baby as much as it was dad. She was very emotionally connected to the business. To answer your question, I'm sure she did support dad a lot in the transition and what it might look like going forward, but she also had her own views and her own wants and aspirations and wants from the deal and all that type of- stuff, and mom is.
Talk about that mom is ultra savvy, nothing passes mom. In fact, she only WhatsApp me at the weekend, telling me there was a spelling mistake on our website, on the Howarths website, which didn't surprise me whatsoever. I Fairplay we'll get on it. She said, "Do you want me to review it for you and have a look?" I said, "Yes, go on, please." Because she's got that eye for detail and nothing passes her, really savvy. Mom's still a massive stakeholder in the business as dad. In fact, she works for the Howarth Foundation, which my dad runs, which is our charity.
That's convinced her to do a little bit more time in the Howarth Foundation. CRM till we get on working together, it's been a while [laughs].
Natalie: It's interesting. You've talked about-- Dave obviously got quite different personality traits as well of your mom and dad before talking about yourself and your dad. How did you manage that dynamic as you got into some of those difficult conversations? Because you've done the profiling with yourself and you'd think about how you deal with that. A lot of that is in the context of you're probably their day-to-day in the office together whereas, from your mom's perspective, she's not their day-to-day. How did you deal with those conversations?
Gavin: It was trickier. I think what was important when speaking about business with mom is to try to make it feel relaxed. When I and dad were having business conversations, it'd be in the office, often in the boardroom, suited and booted, with a big bookshelf or law books behind us. As a business, you might envisage a business conversation going on. What tends to happen with mom is I might be dropping Grace off on a Tuesday morning for her to babysit, and we'd be swapping car seats.
We might just have a little snippet of a conversation relaxed outside as we're swapping the car seats. "Oh, you know about these emails that I just sent about the business deal? This is what I meant on AR, and this is what we're aiming for." Oh, yes, no, I understand that. It's just this." We'd have a little, very relaxed, different environment, a little conversation, a big hug afterward and before, and just very careful to make sure that it didn't become in any way acrimonious or difficult.
Again, that goes back to the values piece that we were all in it for the right reasons, loved each other to bit, cared for each other, and just did it very gently and respectfully and patiently until everyone will-- We'd almost do it in stages where we'd be talking about a certain thing, whether it might be attacked pouring or, I don't know, company cars, or what's going to happen with this.
We just talked about one issue, resolve that way until everyone's totally comfortable with what's been resolved, and when we got to that, we then moved on to another issue. We didn't plan to do it that way. I think that's how it panned out where we just took our time and waited until everyone was fully comfortable with it.
That very much included mom whereas I and dad might do it in the business more formally. I suppose I say more formally, but in the business, mom speaks through dad under-- We've managed to have little conversations, just more relaxed outside of work, almost incidentally to what we were there to do in any event. It just didn't feel like a business.
Natalie: Sounds like you worked hard to really make it an inclusive process, really.
Gavin: I suppose we did really in hindsight. Yes, when you talk about it, I suppose we did try and do that. Maybe not as deliberate as it sounds now, but it worked.
Natalie: You're not the only shareholder of the business now. I understand there are two nonfamily shareholders who were really key members of this team. I don't know if you find this when you speak with other family businesses, but I know lots of families struggle with the idea of ownership being outside the family. It'd be good to get your perspective on the positive impact that's had on the business and for the wider team. How do you go about those conversations? Was it to incentivize, to grow the business? What was the strategy around that?
Gavin: I'm an 80% shareholder. Then we have Tracey, our finance director who owns 15%, and Charlotte, our legal director who owns 5%. Tracey has been with the business longer than I have for maybe 17 years now. 17, 16, 17 years, not the very first member of staff, but not far off, joined from school. Tracey is almost regarded as family, to be honest. Charlotte is not too dissimilar. Charlotte joined the business the year after me, so 11 years ago.
Both have been on the journey of seeing us go from a smaller business to where we are now, and all the trials and tribulations that come with that business growth and journey. We didn't have any hesitation as a family to include Tracey and Charlotte in the ownership because they almost feel like family, and this feeling of family isn't exclusive to those with the name Howarth. It's almost all the team, all the team that has continued to work at Howarths very much feels like a big extended family.
We're never been off the mindset of each, just about those with the name and no one else can come in. It's never been that, really. It's just those who have contributed to the success of the business in demand, put it simply. Tracey and Charlotte have been massive in that respect. I've been rewarded as a result. Of course, there's the commercial side of it of incentivizing and keeping the guys motivated and tied in and tied into the success of the entire operation. There's all that stuff as well, but there's no hesitation about those guys being in the fold if you like.
Natalie: I'm coming back again to that point about inclusivity. I get that in everything that I've seen you put out on social media, on your website, even when I've seen many members of this team person, anything, it's just that family connection that ties you all together that you just live and breathe it.
Gavin: We were just talking about it this morning, actually. We've got our interview due on Friday. We'll get to celebrate another good year and all of it together. We love these events and moments. It's all from our family to yours, in a way, because all the guys here obviously have their own families and a lot have grown their families whilst they've been here. We've all gone on that journey together with new children. We keep joking about the next thing, the business idea will be a crash at Howarths for all the new arrivals that have come.
Well, it is a big family thing. I hesitate to say it in a way because it sounds very cheesy and a lot of people will say it, and a lot of companies will say it. Well, it does seem to apply here, I think.
Natalie: It definitely comes through. I don't think that's by accident either. Clearly, there's been lots of effort on both sides to make that transition that you've gone through over the last 10 years successful. It's not happened by accident. I imagine there are a lot of people listening who can completely resonate with the position that you were in back in 2013, coming into that managing director role, and then thinking ahead about where you want to be in the business.
I think it's a tricky one. If you could distill it, is the one piece of advice that you gave to the now-gen and the next-gen who were starting to embark on their own succession plan?
Gavin: That's a good one. I suppose I've said it a few times in different ways. The first thing that comes to mind, is patience, for one, I think everyone needs that in the process. The old adage is patience is a virtue in today's world, which is also instantaneous. You're at a bit of a juxtaposition, I think, in 2022 and beyond of this concept of patience when we used to get everything with a click of our fingers. I think patience is important. Being in control of your emotions I think is really important.
I said in a previous conversation, allowing 24 hours between conversations because it's so emotionally charged when you talk in business with a family that you can feel these emotions, and rise opinions. I think you have to give time and space because often, how you feel about something at a given moment is not how you feel about it 24 hours later. You've often softened your position, found some perspective, and can empathize more. Patience, that 24-hour gap, I think, is really important.
I think fundamentally, it comes down to it not being worth it falling out with your family. I posted on LinkedIn about our transition and about that statement I said which was, "I'd leave the business before I fell out with mom and dad." I got probably around five or seven messages from people who said, "Lovely post, really nice to read it." Unfortunately, it didn't happen like that in our business. It's better now, but we went through a few years of difficult times.
You felt that sense of regret almost that you let money, business, status, and perceived success get in the way of love between your brother, sister, and parents. It's hard, it's hard in this society to do that, but it isn't worth it in the end because your family relationships just go much further than the business.
Natalie: Absolutely. Actually, everything that you've said there, just been writing it down as you're talking, it all comes about to the patience point, doesn't it? Give yourself that time to think about it for 24 hours. We're used to making decisions so quickly. Just have some patience to absorb it. Think about it. Patience to take the time to plan succession so you are both comfortable with it. It doesn't have to happen overnight. Actually, if you force it, you probably, as you said, those five, six, seven people who messaged you, you're probably going to go down that path of the rise?
Gavin: Exactly. I think the other thing is it is perspective. At the end of the day, for me personally, I feel hugely privileged to even have the opportunity. To work with my parents was already a massive bonus and it's a huge privilege. Then to become managing director and put my stamp on things, it is a massive privilege and I try and keep as much perspective as possible.
In times when that stress is coming hard and the emotions are bubbling up and you're feeling that tension, which is bound to come in succession discussions, I sat back and thought, "Well, I'm not doing bad, am I?" We're not doing bad here. None of us are doing bad. To me, dad had often said that, and this is all a bit of a bonus conversation, really, because we're doing all right, aren't we, between us, and that is the truth. We are.
I do a lot of self-development, reading books, and podcasts and I read something quite recently that if you-- Something like £25,000 a year in the UK, you're in the top 1% of earnings in the world. All right, we talk about the 1% in the UK being the ultra-reach billionaires, but from zoom out further and from a world perspective, you're already in the top 1% so it's keeping perspective.
I think trying to treat that whole succession piece is a privilege, really, and a bit of a bonus. If you don't work, it doesn't work. What you said as well about The Push, I listened to a song recently, it's got a lyric, "Less push, more flow." I love that because I do think without sounding too cheesy, that life is a bit of a dance. There are rhythms to it and sometimes, you push certain things that weren't meant to be.
I think if you let things flow a little bit more naturally, they'll often turn out exactly how they were supposed to be. We tried to adopt a little bit of that in the succession. Let it flow and let people have the time and we got there.
Natalie: Brilliant. That brings me to the final two quick-fire questions if that's okay. Can you tell me your favorite well-known family-run business and the reason why?
Gavin: Well, yes. I've thought about this. It is very interesting. I'm going to fly the flag for SMEs here because there are many big brands that I could talk about, but the one I've always been so impressed with from an SME, sorry, it might not be quite well-known as such or maybe it will be, but he's a company called Thomas Fattorini Limited. Head office in Birmingham now, far office, but they're a six-generation family business, also on Skipton Castle. The family split off and they were jewelers originally in the Bradford area where we're based.
Another side of the business is medals and trophies. They've made the FA cup. They've made loads of brilliant things for loads of brilliant organizations and they've been doing it for years, six generations. We've got to know them a little bit over the years and I think they're a brilliant example of a family business.
I can't imagine getting to six generations. There are so many tricky conversations across so many generations for that to happen, but they still have such brilliant values. For example, based in Birmingham, they've got bigger and more commercially successful. They still use professional advisors, likewise thankfully, one of them, but in Bradford, because that's where the roots were. I love things and just staying true to certain roots and certain values. That's the one I'm going to go for today.
Natalie: Great choice. I love your reasons why as well. As you say, it's usually the big, well-known brands, which do great things, but I like that. That's brilliant. Then the final question, and I know you are a real keen self-learner, you do lots of reading, and listen to podcasts, but if you could share with us just one podcast or what recommendation that you would recommend for any rising family business leader.
Gavin: This is so difficult because I've got a list as long as my arm of things and I have changed my mind from what I've previously thought based on our conversation. This isn't a business book at all, but the one that I really enjoy is something called The Book of Joy, which is a transcript, really, of a conversation between the Dalai Lama and Archbishop Desmond Tutu about life, the journey of life, about peace, about living in such a supercharged technology environment that we live in now.
It's called The Book of Joy. It's just fun. It's deep. There's lots of wisdom, and I think it's brilliant. All along the conversation, we've talked about approaching certain things in life and certain big situations and other people, I think it's a good one. It's not for everyone, but for all that type of stuff. I'll go for that.
Natalie: It's a new one to me so definitely, one for me to check out as well. Thank you so much for that, Gavin. Thanks for your time and openness, really. It's been massively appreciated. Thank you again.
Gavin: Not at all. Really enjoyed it. Thanks very much.
Natalie: That brings the third season of the Exploring Family Business podcast with Mazars to a close. If you enjoyed today's show, please subscribe to the series and leave a review on the Apple podcast. It will help us to extend our reach to the family business community. Thank you for supporting the third season of Exploring Family Business. I hope you've enjoyed listening as much as I've enjoyed recording the episodes. We look forward to sharing more with you in the next season.
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