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Succession

Siblings take over ice-sculpting firm Add to ...

Julian Bayley is aware that he waited too long to start the succession-planning process for the family business.

But better late than never. Three years ago, 73-year-old Mr. Bayley and his wife Ann began to hand the reigns over to three of their five children, while still making allowances for the two others who are not actively involved in the company.

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Their succession solution is as unique as the business itself: Iceculture Inc. exports decorative ice sculptures and interiors across North America and around the world. And despite the potential pitfalls of having three siblings run a company founded by their parents, it seems to be working.

In 1993, the Bayleys founded Iceculture in Hensall, Ont., an outgrowth of a hobby more than a grand plan to build a dynasty. At the time they carved ice sculptures as centrepieces for weddings and corporate events. The business started to grow along with their reputation, eventually eclipsing the efforts of the advertising agency they were operating.

Before long the Bayleys had built Iceculture into a $5-million-a-year venture, with 50 employees specializing in making crystal clear, super-hard ice blocks that were wholesaled along with the capability to machine-carve the blocks with computer-controlled lathes.

The company's calling card at the height of its success - just before the economic downturn hit two years ago - was creating entire restaurant and lounge interiors out of ice, right down to the chairs, tables, bars, curtains and glasses, and even colour portraits and note-perfect copies of busts and renderings of cartoon characters. The products were shipped in specially refrigerated containers, mostly to clients in Dubai, Singapore and South Africa.

The Iceculture team would assemble the ice units on location, like a frozen Lego set, to create a novelty destination where, as incongruous as it sounds to Canadians, patrons would pay a cover charge of up to $40 a person to don parkas, mitts and toques and enjoy the chilly ambience.

"Then the recession hit and sales dropped 50 per cent," Mr. Bayley says somberly. "We had to cut staff. It was very hard and we're down to about 26 or 27 people today. I think there are signs things are turning around but it's been hard because we're in a luxury market."

The Bayleys considered selling the business when they first pondered an exit strategy three years ago.

"We had talks with one of the largest commercial ice makers in North America," Mr. Bayley explains. "And they thought it might add a little glamour to their business, which is really a commodity because we're a creative business and we get a lot of press. But the two cultures were just so different."

It turns out the solution was sitting around the table at seasonal family get-togethers.





Daughter Heidi Bayley, 40, joined the business in 2000, sister Christine Rose, 38, came on board two years later, followed another year later by brother Sam Bayley, now 39. All three were still mulling their options when Ann's health issues brought succession needs into sharper focus.

The plan has been structured so that all five children - three from Mr. Bayley's first marriage and two from his wife's first - have an interest in the business. Two daughters live in the United States and Britain, and they are not involved in the company's operations.

"I had travelled after university and then worked in the financial sector for a few years, in Toronto," Christine Rose recalls. "Then I came back (to Hensall near London, Ont.) to work at the (family) advertising agency as an account executive. Then I just shifted to Iceculture because the business was growing so fast at the time, they needed someone and I stepped in - it's my nature. I started responding to customers and dealing with sales. I drifted in really, it wasn't planned."

Sam's story is similar. Trained as an accountant, he had been director of marketing at a southwestern Ontario lawn and garden care manufacturer and experienced a couple of buyouts before striking out on his own as a consultant. He later went back to university to study computer science, with a specific interest in database and online sales.

He stepped into his role at Iceculture when Christine went on maternity leave, beginning with a side project with a California partner and then gravitating to production, where his IT background proved invaluable with the computer-guided lathes. "We were seeing big number growth, it was just taking off," he says.

Heidi began her tenure as general manager and now acts as president, though her partner siblings and her parents are members of the board and assist with major decisions.

Heidi travelled extensively after university before returning to Canada to work at her aunt's event company. At Iceculture, her skills as a designer have seamlessly meshed with Christine Rose's sales and marketing background and Sam's role in production, though as they all note, everyone pitches in one the sales side.

"I have customers I deal with because I sold them the equipment and support them," Sam says, adding that working with family adds an immediate layer of trust. "We're trying to make it a little more structured moving forward now."

Working cheek-by-jowl with siblings and parents isn't for everyone, the Bayleys admit, and they're well aware that second-generation businesses are more at risk of failure often due to the stress of working with family.

"There's definitely a lot of good and lot of bad, though the bad is never worse than the good," Heidi says.

To keep focused, they have drawn on the resources of the Canadian Association of Family Enterprises (CAFÉ), where they share experiences and learn from others who work for and managing family businesses. Family gatherings have become business meetings in the past, to the chagrin of their spouses - though all three say they are now better at parking issues at the door.

In the end the succession plan was an easy decision, Mr. Bayley says, and though he and his wife waited a while, Ann's health and the economy accelerated the process.

"It was a baptism by fire," he says. "Was it too late? There's no ideal time really. We had to evaluate (the children's) business experience and establish exactly what they might bring to the table.

"We had to know they could all get along in a business environment and find out how they interacted with company staff - especially in tough business situations."

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