Liz McBeth had already been working for more than two decades and completed her MBA when her father, Ian Braff, asked her to oversee a project at the family business, Armour Valve in Scarborough, Ont.
“He said, ‘I’ve got a challenge for you, and I’m not sure you’re up to it,’” Ms. McBeth recalls. “I had to say yes,” she says, admitting her dad “knows how to push my buttons.”
She led the specialty valve and piping equipment sales and service company through an enterprise resource planning software transition. “The company had been around for decades without much change; then I arrive on the scene as a harbinger of change,” says Ms. McBeth of the project, which began in 2008.
Ms. McBeth and her three brothers worked at the company, which their parents founded in 1971, during school vacations as teens. But none of them ever spoke about taking over.
Instead, while her brothers were busy with their own business careers in other sectors, Ms. McBeth realized that her short-term sojourn at the company might become permanent.
“At a certain point, I just knew that I needed to stick around. I felt compelled,” says Ms. McBeth, who became the marketing manager and then took over as president in 2019. Her dad shelved his plans to sell the business, and while he is currently CEO, he has moved away from day-to-day operations.
Gender and succession-planning dynamics
Many family businesses don’t have carefully plotted out succession plans, says Bill Brushett, president and CEO of Family Enterprise Canada, a national group that represents family businesses and family enterprise advisors.
“It’s probably the biggest challenge that families face,” Mr. Brushett says. “When you change leadership or ownership to the next generation, it’s a big deal.”
It can be a bigger challenge still when the best successor is a daughter – or perhaps a niece – particularly for well-established companies, including those passed down through one or more generations or operating in a male-dominated field.
“Gender can be at the heart of succession-planning dynamics,” says Christina Constantinidis, professor of entrepreneurship at the Université du Québec à Montréal. “Implicit expectations are very strong. Some families automatically or naturally see the son as more fit to take over.”
The family and its business may operate with a patriarchal slant, while investors, suppliers and employees may expect the eldest son to step in and run things just as his father did.
“We are seeing many family businesses, including multigenerational family business, where a daughter for the first time has taken over,” say Dr. Constantinidis. There’s limited research on the topic, but women owners are more likely to pass things on to their daughter, she says. Also, women often take the job at a family company when there’s no male progeny to do so or there’s a sudden illness or death.
Dr. Constantinidis says she’s also seen succession fall to sibling teams. However, a brother often takes over operations or the CEO role while a sister might tackle marketing or human resources.
“You’ll find that gender bias plays out in family businesses, just the way it plays out in society,” says Mr. Brushett.
An equal shot at leadership
Meanwhile, more women than ever are ready to become leaders. Women in Canada are more likely to have a university degree than men, while they’re nearing parity in MBA programs, according to U.S. data.
And with the ownership of more than 60 per cent of family enterprises set to change hands in the next decade, Mr. Brushett thinks that will give more women an equal shot at leadership than they might get in the wider business community.
“[The parents] will see the pros and cons and assess in a more fair way who has got the skills to take over,” he says.
However, when women take the reins, they can be met with resistance.
A female leader in a male-dominated industry, Ms. McBeth says some suppliers and customers seemed wary at first.
“I felt a need as a non-technical expert to prove my worth to the business,” she says. “I’m never going to develop 40 years of industry experience the way my father has. Rather than become a carbon copy of my father, I leaned into my marketing background and really started to understand the industries we sell into and the shifts that are happening with them.”
‘A sink or swim situation’
When Marissa Freed took over the leadership of Freed & Freed, the Winnipeg garment manufacturer her great-grandfather started in 1921, she says that she similarly had to pay her dues, particularly with employees.
Ms. Freed recalls when a long-time office staff member, Mona, came into her office and said: “I just want you to know that respect is something you have to earn, it’s not given.”
Neither Ms. Freed nor her two brothers had ever been asked to take over the company, but she stepped in to help her dad for a few months starting in 2009 as she waited to start a new job teaching fashion at a college in the U.S. She had just turned 30 and had both business experience and an MBA.
A few months in, she found herself inspired by the potential at the company, which her dad was contemplating winding down.
“I [began] wondering if there was something I could do with this,” Ms. Freed says.
Her father, Stephen Freed, said to her at the time, “It’s a sink or swim situation.” Indeed, some office staff quit. Mona, however, stayed and became a trusted ally.
Ms. Freed says she faced sexism in the garment industry, but responded with knowledge. “You have to walk in the room knowing more than them,” she says.
Over the last 13 years, Ms. Freed has doubled the size of Freed & Freed, landing both ambitious contracts and launching the company’s outerwear line in 2014. When the pandemic hit in spring 2020, she pivoted quickly to making masks and other personal protective equipment.
Less tied to the status quo
Dr. Constantinidis says that when women take over a family business, they tend to have innovative ways of doing things.
“That’s not because it’s natural for women to be more innovative,” she notes. “But she already had to fight for her position and had to convince everyone she’s capable, so when she brings in new ideas, daughters can be more assertive. They’re used to fighting against the system.”
While sons may try to duplicate their father’s leadership style, women taking over may feel less tied to the status quo, Dr. Constantinidis says.
For her part, Ms. McBeth is bringing in new products at Armour Valve to support customers transitioning to green energy. And she has begun the process of becoming a more responsible business by measuring and planning new initiatives around diversity.
She also prioritizes work-life balance at Armour Valve. It’s a key part of the company culture that Ms. McBeth’s mother – who worked in finance and HR at Armour Valve and has since passed away – worked hard to establish.
“Preserving that is one of the most important things,” says Ms. McBeth.
While there is a shift happening in trends for family business succession-planning, many will likely still pass over able daughters for leadership roles, Dr. Constantinidis says. She’s hopeful that will change in time.
“These daughters contribute to change,” she says. “They change the system for the next generation. They challenge the norms.”
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