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Business management in the family business

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Business management in any industry is an important factor in growth. However, in family business, where tantrums and politics can become personal, strong business management is absolutely critical. Kennards Hire, the founder of self-storage and equipment hire in Australia, is, underneath all of its success, simply a family business that got it right.

Starting out

Now with over 100 Kennards stores nationwide, the business started 62 years ago when Walter Kennard was inundated with requests to borrow his concrete mixer.

“He was a true entrepreneur,” says Andy Kennard, the company’s owner and Walter’s son. “He would see opportunity, gaps and needs and would just fill them.”

Andy, with his brother Neville, began actively working in the business in the early 60s and were partners for 27 years in the two different business areas – storage and traditional hire.

Unforeseen growth

While Kennards experienced growth throughout the 70s and 80s, it wasn’t until 1995, when they hired their first external CEO Peter Lancken, that the business gained massive market share.

“In the 70s and 80s, when we grew it, it was very structured and slow and we didn’t like debt and we kept it within our capabilities and then when Peter came on board he saw the opportunities,” he says. “He saw the opportunity to consolidate the industry nationally and so we did a lot of acquisitions in the 15 years that he was there. We grew probably five times in that 15 years.”

A strong mentor

The strength of the business has been founded on strong principles and systems, says Andy. These were due, in part, to an unexpected mentor in Sam Greenberg, the “grandfather of rental in America” and founder of U-Rent.

“He befriended us and we learnt so much. It was he who really gave us the vision. We were running a pretty backyard sort of business at the time. We saw the way that he did it and immediately just adopted it and that’s when we really took off with the systems and the standards,” says Andy. “We decided at that time we want to be the best, not necessarily the biggest, and quality in every aspect that we can.”

And, while there has been the option to grow through franchising, Kennards has remained consolidated under the family name

“For us it’s about controlling the brand,” says Angus Kennard, company director. “Why would you want to franchise when you can do it yourself and get the returns?”

The family plan

A business management approach to succession allows for the business and family to remain two separate entities. Succession is two things, says Andy – management of the business and company ownership within the family.

“Management succession has gone very smoothly starting with Peter Lancken,” he says.

In terms of the family, Angus says clearly defining its role within the business is important.

“We’ve done a lot of work as a family in … defining and understanding what our values are and that led us to getting appropriate structures in place,” says Angus. “We have a DOFA (Deed of Family Arrangement) which sets out all the structures.

“We also have a Kennard Family Charter and that sets out all the history of the company, the rules of engagement with the family in the business.”

The purpose of this, he says, is as important to the future as it is to the present.

“With the younger generation coming through, to educate them on why we’re here and how we got here and where we want to move forward as far as behaviour as a family in the business,” says Angus.

Angus credits setting immutable structures as the means to effective family business management.

So, if you’re looking to work on your business rather than being stuck in it, book in for a complimentary business assessment today with Switzer Business Coaching

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Friday, September 24, 2010

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