Ross Mickel, director of building group Mactaggart and Mickel belongs to an elite group of just four percent of family businesses in the UK to make it into fourth generation ownership, giving him a rare and valuable perspective on what it takes for a family business to survive the best part of a century.

Ross, who heads the Timber Systems division of Mactaggart and Mickel, hosted a lively ‘Meet The Owner’event at the company’s Bellshill operation for FBUS members. He led a tour of the timber systems operation which, thanks to research and development investment, has honed a technique which enables it to erect a fully wind and watertight timber frame structure in a single day and even to drop in a bathroom ‘pod’complete with tiles and mirrors. It also takes sustainability and environmental issues seriously and plants three trees for every tree that is felled.

Quality and efficiency fuel growth

Mactaggart and Mickel’s reputation for quality and efficiency has helped the timber systems division which was established in 2009 as part of a group diversification strategy, reach a sales landmark where it now provides more timber systems to external clients including other house builders and commercial clients such as hotel group Premier Inn, than it does for the group’s own building projects.

Ross provided astute insights on how Mactaggart and Mickel has survived and prospered through 90 eventful years which featured two World Wars and several recessions that decimated many long established builders. “We build houses the same way we build the business – we build them to last,” he said.

He attributed the company’s survival to a blend of firm leadership, timely diversification, a strong balance sheet, and an ability to take a long-term perspective – underpinned by a robust governance structure, a  talented executive team and aided by high-quality professional advice from Craig Corporate’s Tom Craig and Neil Grimmond. Being family-owned is also key to long-term survival, he said.

Diversification began in earnest in 2009 following a sharp downturn in the construction sector that presaged the creation of the group’s existing structure of four divisions: commercial property, land, contracts and timber systems. There are strong synergies between the divisions and they help the group to weather cyclical downturns.

FBUS can help family firms learn from each other

Ross believes family firms need support to continue to prosper and welcomed the initiatives announced by FBUS.“Family business in Scotland is huge but there’s no single voice for it. FBUS is important because family businesses tend to exist in silos, either within their sector, their locality or by size. There is a real benefit to having a forum which enables you to get out of your silo and learn from different family firms at different stages and in different industries,” Ross said.

Building on a proud legacy

Ross, his first cousin and fellow director Andrew Mickel and uncle and Group Chairman Bruce Mickel are the only three family members on the board of the business founded by the Mactaggarts and Mickels in 1925. However ownership of the company spans 25 Mickel family shareholders. “The ownership gets more widespread through each new generation and that brings its own challenges,” Ross said.

Both the Mactaggarts and Mickels enjoyed success in their own right in the early 1900s, completing major works including construction of tenements in Glasgow West End and they drew on their joint strengths from 1925 until 1943 when the Mactaggarts exited the business, leaving the Mickels in control. Flagship projects completed by the group in the 21st Century include the athletes village for the 2014 Commonwealth Games.

Ringing the changes for future generations

Colonel Andrew Mickel, Ross’ great-grandfather, ran the business in a distinctly autocratic manner. Ross says the leadership style is now much differerent, especially since the appointment of Ed Monaghan, a non-family member as Chief Executive. “Ed started at 16 as an apprentice painter and worked his way to CEO. That would only happen in a family business. It’s that relationship between the family and executive team that family businesses need to get right,” Ross said.

Mickel descendants retain a deep-rooted sense of responsibility for safeguarding the business and  family wealth for the next generation. ‘Generation Five’ so far comprises nine children, the youngest of whom is just days old. “We’re keen that they understand the business but no-one will be forced to join it, although we hope they might,” Ross says.

Ross was the first of the Mickel clan to join the family company under new protocols set up to ensure that new entrants brought relevant skills, education and experience. “You can’t come with nothing to this company,” he said.

Strong balance sheet supports longevity

Figures for 2015 show the Mickels have done a good job in protecting and growing the group’s assets for future generations. In the latest financial year group turnover was £68 million, profits reached £9.8 million and net assets were valued at £138 million. The group also employs 234 people, including several ‘father and son’generations of tradesmen.

Ross says family ownership and financial strength have enabled the business to take a long-term perspective and account in large part for its longevity. “When you measure the success of family business, longevity should be included…Our approach means we won’t climb as fast as some but we won’t fall nearly as far. Our name is on the flag, we take that responsibility seriously,”he said.

Escaping the operational bubble

Ross said Tom Craig and Neil Grimmond have played key roles in helping Mactaggart and Mickel to address generational change and governance as well as focusing on financial yardsticks such as monitoring Return on Capital Employed (ROCE) which the group had not measured previously. Adopting this measure enabled the group to assess how well it leveraged its asset base.

“Craig Corporate helped us to explore ideas beyond our comfort zone. They acted as consulting mentors, helping us look at strategic direction and to join all the dots so we could really see the bigger picture…sometimes even timber systems experts can’t see the wood for the trees,”Ross joked.

Overall, he concluded that Craig Corporate provides very high level strategic input. “They really helped us to feed into the creation of our governance structure to get the best for the company and for shareholders. They also helped us take a step back from the operational bubble and to look hard both internally and externally at what was happening. You have to do that if you want to stay ahead.”