'Stewards' of a blueberry empire

Founded as a humble farm harvesting blueberries, the Bragg Group of Cos. now includes not only the biggest slice of the world's wild blueberry market, but also Canada's largest producer of frozen carrots, a building-supply chain, a company that recycles aircraft de-icing fluid from airports around North America, and the country's largest privately owned cable-TV company.

But like many family businesses, the Nova Scotia-based conglomerate's biggest achievement will be to successfully pass control of the group to the next generation after founder John Bragg, 69, decides to retire.

The knock on family businesses, which by some estimates comprise 90% of all Canadian businesses, is that they are so hard to pass on. Most families are dysfunctional enough without complicating the picture by having to divide up millions of dollars worth of business assets, hammer out consensus around the business's future, and decide which next-generation siblings should do what jobs as they labour toward the top of the business's hierarchy.

One rule of thumb says only 30% of family businesses make the transition to the next generation, and just 10% to 15% survive into the third generation.

To highlight companies that successfully overcome the twin challenges of growth and family involvement, the Canadian Association of Family Enterprise runs an annual awards program to identify Canada's Family Enterprise of the Year. This year the winner of the award, sponsored by Royal Bank and KPMG Enterprise, was the Bragg Group, which has successfully incorporated the four children of John and Judy Bragg into the conglomerate -- although the success of its succession planning remains to be tested.

As the founder and chairman says, there is no succession plan at Bragg Group, because he doesn't know when he will retire, or whether he will be handing the management reins to a family member or an outsider. What he hopes is he has instilled in his family an attitude that that decision isn't really important.

"Our objective is to be good owners -- good stewards of the company," Bragg says. If his four children, and eventually their grandchildren, understand that their first responsibility is to all stakeholders -- customers, employees, partners and management -- then he says the group will always be in good hands.

"If you want to be in [senior] management, being family should open the door for you," he says. But it shouldn't guarantee you a corner office or a big salary.

Bragg made sure his children -- Lee, Matthew, Carolyn and Trish -- got their start with real "rubber boot" jobs, picking blueberries as children and working shifts in the plant that produces frozen onion rings or helping out with cable installations. "You have to understand the operations and the people who make the business tick," he insists.

Today, three of them work in senior management. Lee is leading Bragg Communications' expansion from cable into wireless and Internet services, Matthew directs sales for Oxford Frozen Foods, and Carolyn oversees the sale of cable-TV ads. (Younger daughter Trish had twins late last year and is on leave.)

None of them enjoyed special status for being a Bragg. "One senior person reporting to me once said, 'I told a family member that I might be working for them one day, but for now they're working for me, and here's the rule of the game,'" Bragg says. "And I told him 'that's exactly right.'"

Parents and children (including spouses) have all taken part in week-long family-business training through Business Families Foundation launched by Philippe and Nan-b de Gaspe Beaubien, the founders of Telemedia Communications.

The Braggs learned to use tools such as family meetings, shareholder agreements, a code of ethics, and dispute-resolution processes to build consensus and ensure all issues and expectations within the family are properly discussed. "Sometimes it's hard work to make an effort to work on family issues as opposed to business issues, but we've had the discipline to do it," Bragg says.

"It's a fallacy to say that families always get along. Not very many of them do, especially if there's money on the table."

The most valuable tool, he says, has been the use of an outside board of experienced business professionals to advise the company. All four of his children sit on the board, which acts like a formal board of directors, except in the end, only the chairman, as majority shareholder, decides what to do. The board ensures the family makes the right business decisions for the company, Bragg says. While he wields the big stick, he says he's kept in check knowing that no capable advisor would stay long on the board if they felt their opinions were being ignored. Bragg knows he can't control the future of the company, but says he would prefer to see the group stay together under family control. He hopes that rather than compete for the top position, his children will be influenced by the objective, stewardship role of the board members they work with. "I want them to think of themselves as trustees, rather than inheritors," he says. "If it's an inheritance, you think it's for you. If you're a trustee, you know it's for the next generation."

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