To quote a well-known saying, for a family business a quarter is 25 years. From the perspective of a family-owned enterprise, the business is just on loan from future generations and the current owners are responsible for developing, renewing, and growing the company for the next generation of owners.
Ahlström celebrates its 170th anniversary in 2021, which is a prime example of the family business ethos. The family's business operations are today managed by two family-owned investment companies, Ahlström Capital and Ahlström Invest.
International research shows that, on average, family-owned businesses succeed better than other firms. It therefore pays to focus on continuity. At Ahlström, succession planning plays a central role in the company's success and continuity. Engaging and inspiring new generations to active ownership is of key importance.
“Throughout our history, we have strived to instill the family business as part of the new generation's identity. We tell them about our values and the companies, foster our family culture, and give them the opportunity to become involved,” says Anne Karell, Managing Director, Antti Ahlström Perilliset Oy.
Success planning ensures continuity
It all starts with children.
The company's education program aimed at supporting succession planning is called Ahlström Academy. It includes three separate strands, the first of which, Ahlström Youth Academy, is meant for family members aged 12+. They are offered, for example, summer camp and other activities.
This is followed by the Ahlström Business Academy for young adults, and Ahlström Academy for Personal Growth, which supports, among other things, personal growth and includes, for example, a mentoring program.
It's good to give the younger generations time and space for expressing their views and ideas."
“With Ahlström Business Academy, we want to provide basic information about the family and family business ownership and to inspire the participants to seek further information. We want to support the family members in active ownership. We mull over the most pressing challenges of the time and try to figure out how to keep everyone engaged. At the heart of it all is stimulating inspiration among the family and sharing information of the company,” says Karell.
The importance of engagement and focusing on active ownership are also pivotal for Catharina Ehrnrooth, who represents the sixth generation and currently works as Business Development Manager at Antti Ahlström Perilliset Oy.
“The feeling of being listened to is crucial. It's good to give the younger generations time and space for expressing their views and ideas.”
Ehrnrooth emphasizes the importance of support and mentoring in identifying one's interests and strengths. She also brings up the need for transparent owner communication.
“The youth are the future. It's vital that they get to be involved as early as possible, to see and hear what's going on and where the family business is headed.”
Education increases motivation
Ahlström Business Academy has been running for ten years and consists of four modules, one per year. The modules are standalone entities and can be completed in any order. The cooperation with Aalto University Executive Education started two years ago, and the third, brand new module will start in October.
Participating in the Ahlström Business Academy education program is recommended for all Ahlström family members, as it provides a good foundation for an in-depth understanding of the family enterprise.
“This helps us increase the participants' motivation to further develop themselves, and we hope that they can then later on take on positions of trust in the family companies. Everyone is, of course, responsible for their own initial qualifications and career development. All our education courses are also subject to a fee," says Karell.
The program is appropriately challenging academically and of high quality, while at the same time customer-driven and tailored to our needs."
According to her, the program has proved important and achieved a strong foothold. Joining forces with Aalto EE has raised the program's profile.
“It's now on par with our expectations. It's appropriately challenging academically and of high quality, while at the same time customer-driven and tailored to our needs.”
Ehrnrooth applauds Aalto EE's instructors and the content of the program modules.
“We looked at interesting articles, studies, and theories, and applied them to practice. This resulted in useful analyses in the context of our family business.”
Family entrepreneurs have many roles
From the perspective of competence development, there are aspects to a family business that don't apply to other types of companies, Karell says. The education program focuses not only on honing skills but also on ownership and the various roles that go together with family businesses.
“In a family business, you may be an owner, a trustee, and an employee simultaneously, and somehow you must find a balance between the different roles.”
Fittingly, one of the four modules, Family Business, is directly linked to family entrepreneurship and its challenges.
“It covers everything related to family entrepreneurship. It's not just about ownership but also about employees and outsiders. It's a complex equation,” Karell says.
“The module also succeeded in highlighting the impact Finnish and global family-owned businesses have on the society,” Ehrnrooth adds.
The Entrepreneurship module looks at entrepreneurship from various perspectives, such as those of an entrepreneur, an investor, and intrapreneurship. One method used is the Aalto EE Strategy Game.
“It increased my understanding of managing a family business and how to foster a culture of experimentation, innovation, and change. The module was well-structured, well-rounded, and interactive. And we even visited [the technology and startup event] Slush,” says Ehrnrooth.
A new module starting in October is called Family Identity and Networks. It's an in-depth introduction into identity and culture as well as the importance of networks in the context of a family business. The fourth module is Finance and Governance, which focuses on financial performance indicators and teaches participants, for example, to read and interpret financial statements.
Networking creates cohesion
Normally, the education sessions are held at the Ahlström family heritage home in Noormarkku.
“There, the participants can absorb the Ahlström values and get to know the place and each other. There may be participants who have never before met each other, which is why networking is such an important part of the program. It's important for family cohesion to establish good relations with other family members as early as possible,” Karell says.
The previous module had a participant from Brazil who logged in at night. It was great to be able to offer them this opportunity also."
The Covid-19 pandemic has, naturally, changed all this. Last fall, the program was run as a hybrid event at Aalto EE premises so that some of the participants were onsite, and others participated virtually. The Ahlström family has over the years grown to include more than 420 members, and more than thirty percent of the family live abroad. Karell therefore believes that the hybrid solution has come to stay.
“The previous module had a participant from Brazil who logged in at night. It was great to be able to offer them this opportunity also.”
“The program was very interactive. Discussions with other family members led to some very interesting ideas,” Ehrnrooth adds.
Family firms must move forward, too
According to Karell, cooperation with Aalto EE has met all the objectives. The parties, for example, joined forces to redesign the modules.
“We don't wish to outsource the thought process but instead want to hold the reins ourselves, but Aalto EE has offered excellent assistance and ideas on how to develop the education program further. We collect feedback annually, reflect on how the world around us is changing, and renew the modules accordingly. Aalto EE has provided us with outstanding support in this process as well.”
Ehrnrooth, too, is happy with her learning experience.
We collect feedback annually, reflect on how the world around us is changing, and renew the modules accordingly."
“I believe that learning never ends. I wanted to delve into the challenges of the family business in particular and portfolio companies in general from an owner's perspective, and to study the governance model and generational handovers. All these expectations were met.”
A family business looks far into the future, but it must be just as willing and able to change as any other company.
“We have to keep redeeming our existence and compete in an extremely tough environment. That's why we need to be able to make big, courageous moves if we see that they support the company's business operations and ensure continuity in the long run," Karell says.
"Approximately three percent of family-owned businesses are passed on to the fourth generation. With the Ahlströms, we're already in the seventh generation. This speaks volumes about successful succession planning. We are proud of our accomplishments and see it as extremely important to uphold the family history,” says Ehrnrooth.
With 50 years' experience, Aalto EE develops world-class Customized Solutions to help our clients address current and future business challenges. Our jointly created and designed solutions are based on a combination of solid expertise, customer insight, concrete action, and an experimental approach. Read more