Discussing Family Business with James Burton
Mr. Burton is the President of the James A. Burton and Family Foundation and is the Founder, Executive Chair and CEO of PPI Management Limited. He is the Chair of FEX and FEX-F and a driving force behind the creation of FEX. Mr. Burton lives in Niagara on the Lake, ON and is actively working with his children to create his family legacy.
In your expert opinion, why do you believe that family-owned businesses have such a strong positive impact on Canada’s economy?
For many years we have relied on anecdotal evidence that tells us family enterprises have a deep and broad impact on Canadian economic performance. The recent research findings, based on the report from the Conference Board of Canada, confirms clearly that family enterprise has a large footprint in the Canadian economy. Family enterprises generated almost half (48.9%) of Canada’s private sector GDP and produce nearly 7 million jobs in Canada. They account for 63% of all private sector firms and approximately 65% of the output and 90% of the jobs generated by small and medium-sized businesses. Family enterprises are an integral part of the Canadian private sector.
Their footprint can be seen in all industries and provinces and they generate a large share of employment in multiple economic sectors. The strong positive impact on Canada’s economy extends beyond the facts and data, family businesses sustain a multi-generational commitment to job creation and provide significant investments and leadership in their communities. Family-owned enterprises come in all sizes and types of business and are rooted in practically every community across the country. They impact everyone!
What would you say is the biggest challenge that family-owned businesses face when it comes to reaching new heights and growing their business?
Of course, family-owned enterprises face all the same disruptive forces, competitive pressures and business-related issues as every other business today and then in addition to that, they also deal with the unique challenges and opportunities of being a family in business together.
I believe the biggest challenge today is the current lack of awareness and understanding of family firm dynamics and family-owned business in general, and of the important role they play in our economy and the well-being of our communities. It is a blind spot in Canada, particularly in the area of public policy support.
A better understanding of the dynamics in family-owned businesses and the related challenges they face will build a strong foundation for improved public policy, advanced education for business families and informed professional family-centric advice.
In what area would you say that family-owned businesses are performing better compared to other businesses?
Our recent research report tells us that family enterprises performed better than other firms in the areas of growth and longevity over the timeframe 2007 to 2013. It is well known that family-owned businesses are not saddled with quarterly reporting requirements and managing short-term expectations of stakeholders and in fact, by their nature, they are more inclined to make decisions and investments focused on the long term. It is the ability to take the long view combined with a natural inclination to balance the needs of business, family, and community that we believe contributes to the strong performance by family-owned businesses compared to other businesses.
“Family-owned businesses are generally strong and resilient and quite capable of competing on the business side. What family enterprises need is a deeper awareness and understanding of the unique challenges they face followed by real actions that support them in addressing those challenges. For example, the continuity and transitioning of leadership and ownership between generations is a unique challenge for family-owned enterprises. A greater understanding of this challenge can build a stronger foundation for improved public policy in this area.”
However, the whole area of performance is where we know there is a big gap in terms of research and understanding of family-owned enterprises. Continued research by the Family Enterprise Xchange Foundation and others is critical! The value to be derived from empirical research and better data is three-fold – it will inform business families of best practices both in Canada and globally that will assist them in navigating the challenges and opportunities they face; it will inform family enterprise advisors in the same way and enable them to provide better, more holistic advice to the business families they serve; and it will better inform public policy choices and decisions for the benefit of the family enterprise community in Canada.
What are some of the changes that need to be imputed in family-owned businesses to help them expand and increase their revenue?
Family-owned businesses are generally strong and resilient and quite capable of competing on the business side. What family enterprises need is a deeper awareness and understanding of the unique challenges they face followed by real actions that support them in addressing those challenges. For example, the continuity and transitioning of leadership and ownership between generations is a unique challenge for family-owned enterprises. A greater understanding of this challenge can build a stronger foundation for improved public policy in this area.
How do you believe improved data, informed public policies and better advisory services will help family-owned businesses reach their full economic potential?
Improved data will lead to better decision making by business families, advisors, and public policymakers. Evidence-based knowledge of the unique challenges and opportunities faced by family-owned enterprises will help policymakers at all levels of government understand the impact and consequences of public policies. It will also help advisors become better informed and as a result, develop more valuable and effective family-centric advice. Finally, business families themselves will benefit from improved data by applying that knowledge to achieve better outcomes and success in terms of continuity and well-being for both their families and their family businesses.
What are some of the resources that are available to family-owned businesses that can contribute to their success and growth?
First and foremost, business families need to realize that they are not alone and that there is a dynamic growing peer community of business families in Canada, supported by Family Enterprise Xchange (FEX). Participating in this community of like-minded peers provides the opportunity for sharing experiences, accessing knowledge and resources as well as mentoring each other. The body of knowledge for family enterprise is expanding on a global basis and we are committed to curating the best research and knowledge for the benefit of the Canadian family business community.
There are many resources, educational programs, and tools currently available to support business families on their journey. Family Enterprise Xchange provides and facilitates access to many of these resources and programs on its platform. In addition, there are other organizations such as Family Business Network International and the Business Families Foundation who are part of the broader ecosystem of family enterprise and, also have great resources for business families.
On a final note, you work actively with your own children to create your family legacy. What family legacy are you hoping to leave behind that can inspire other family-owned businesses?
This is an area that is extremely important to my wife and me. We are fortunately at the stage in our family enterprise journey where we are able to really focus on the family legacy and what it means to us. What excites me the most is that the whole family is getting engaged and participating in the legacy discussions. It is something we are co-creating together.
There are three key areas we are focused on in creating our family legacy:
• creating a platform for multi-generational family involvement;
• creating a legacy of Impact Philanthropy including both individual and family activism; and
• creating an opportunity for each member of our family to commit to a “Higher Purpose” as part of our family legacy.