As custodians of a family of businesses, the company’s aim is to build and improve them for the future.
Vestey Holdings is a fourth-generation family business, involved primarily in the global food industry. CEO George Vestey tells a compelling story of the resilience and ingenuity of his family and how the family business has survived many world crises over the past 125 years, from wars to revolutions, political uprisings and hostile competitive environments and the current uncertainty created by COVID-19.
2020 marks the 125th anniversary of the Vestey family business when brothers William and Edmund Vestey established the Union Cold Storage Company in Liverpool. Among the first to exploit the potential use of refrigeration, the company developed cold storage facilities across the UK and throughout Russia, the Baltics, and Western Europe. This made it possible to supply large quantities of quality affordable meat, poultry, eggs and fish to the growing UK population during the Industrial Revolution.
As George Vestey describes, “Ours is a brilliant story of pioneering people who lived tough lives. What they and succeeding generations have done has defined us as a family. We would be remiss in letting the flame of our family identity go out.”
This family legacy of reinvention is what the current generation wants to continue through the immediate and future family succession processes.
The family ownership structure is critical for Vestey Holding’s success, and a great deal of thought has been given to the subject of ownership succession. There are 11 children in the fifth generation of the family and it is not yet known whether any members of the cousin generation will be interested in, or capable of, taking on management or leadership roles.
With the assistance of an external facilitator, a family council is being created as a vehicle for the succession process. The first priority will be to address the inter-generational transfer of ownership to the 11 cousins. Management succession will become a focus further down the road when these NextGen family members have become more attuned to the business.
Vestey Holdings had several non-family CEOs in the past and found that much of the family culture was lost in the process. The imperative now is to rebuild and maintain the resilient, entrepreneurial culture at the heart of the Vestey family business through successive generations.
As part of the ownership structure, the family council will be the mechanism to bring together all 11 of the NextGen family members to learn about the business, and to create greater engagement between the family and the business. This next generation of future entrepreneurs is not there to receive lessons on how to manage the business.They are there to begin building their own opinions and to understand what’s happening in the business, just as George Vestey himself did when he joined the family business in the late 1980s as a trainee butcher.
The current generation’s role is to reinforce the foundation of the family values, expected behaviors and identity and to help the next generation explore new ways to become involved in the business to determine whether they want to be a part of it going forward.
If the current leaders fail to engage with the next generation successfully, or are unable to find the right successor or if the family council is unable to get itself organized, a pragmatic decision will likely be made to recruit the best non-family executive possible, while retaining the deeply rooted sense of ‘familiness’. This might involve strengthening the capability and participation of the ownership group to reflect the familiness components of the business alongside a non-family executive who shares their values.
George Vestey exhibits a strong understanding of the nature of succession and the role of independence in the process. In his view, the frameworks and processes are as important as the output.
There is agreement that the current fourth generation of the family should not assess or select potential successors due to the inevitable possibility of bias. This, and the potential for successors to be ‘hurt’ by their family members’ decisions, makes neutrality essential. Therefore, the family council will play a role in measuring the benchmarks for succession, while using non-family advisors to guide the process.
An external advisor has been retained to facilitate the succession planning process and has assisted in the formulation of the family council. He will also be instrumental in guiding the conversations with other family members who have ownership interests and the 11 members of the next generation who will be invited into the family council. The external facilitator is expected to ease potential tensions and conflicts among the family members and to guide discussions on potentially sensitive and difficult-to-discuss issues.
The succession model for the Vestey family has evolved between the generations with an appreciation of the unique characteristics of each new generation as they join the business. The model has changed over time as the result of a liquidity event, a desire to change the role of cousins, the implications on future leaders and the evolution of a stronger relationship between family members and the business.
However, while the model may have evolved, the standard criteria for selection continues to be based on meritocracy – on technical competency, ability, willingness and the business need. Equally important to Vestey Holdings, it is also based on the potential successor’s passion for the business, energy and commitment to ‘do good’ for society, the environment, and all the company’s stakeholders. This mindset is considered to be essential for continuously reinventing the business as new challenges arise while remaining true to the family’s core values.
“We’re here to do good,” states George Vestey, “and we will expect the next generation to take a lead on societal impact and sustainability issues. We need to be able to have conversations with them about those issues and their responsibility so that they have a clear vision of how they can make a contribution to the family business and to society in general. I believe the generation coming behind us already has these issues on their radar, and they will be able to have tremendous impact if we set them free to do it.”
George refers to his earlier military training, where the motto was ‘To Serve. To Lead’ and believes that ‘We Serve, We Lead’ is an appropriate way to define the vision and values of the Vestey family business.
The enduring entrepreneurial spirit of the Vestey family continues to influence the way its business is led today. Vestey Holding’s aim is to sustain its business through long-term thinking and careful succession planning. Maintaining a profitable business is an essential pre-requisite. Without profit, the company cannot be sustainable or able to do good. “But we stand for a greater sense of purpose than profit alone,” states George Vestey, “as we have a responsibility – both collectively and individually in the business – to enhance our local communities by making them a better place to live and work now and in the future. By being a good owner, that’s good for business and good for everyone.”