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Entrepreneur: Bruce Donelly, Chairman
Company: Donelly Group
Business type: Manufacture & supply of food machinery & testing equipment, food products & plastic packaging
Founded: 1983
Turnover: $10M - $50M
Head office: Tullamarine and Reservoir, Victoria; Launceston, Tasmania
Contact details: +61 3 9338 9011
The Donelly Group Story
The Donelly Group’s antecedents go back to 1983. It has been built up through organic growth and some acquisitions to include: Edlyn Food Services Pty Ltd, Donelly Machinery Pty Ltd, Testex, Food Plastics Company, Fogg Properties, Tamar Valley Diary, Fogg Filler Co. Australia Pty Ltd.
The Group evolved relatively late in life for chairman Bruce Donelly into a family business which includes each of his four sons.
Postcript: Edlyn Food Services was ranked 65 in the BRW Fast 100 - Australia's fastest-growing small and medium-size companies - published in December 2000.
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Key learning points:
- Expectations of family as employees - Don’t expect that family members must come into the family business. Many are not interested, or not capable, or have problems with the way their parents - especially their fathers - run a business. Bruce Donelly says: “My attitude was always lead from the front but in family business, you’ve got to butt out sometimes.”
- Experience counts - Don’t bring someone straight from school or university into the family business - the expectations on them are too high. Donelly says: “They’re not the same as Dad, they don’t know the culture, and they are put under pressure by other employees immediately. When they’re more mature and have seen more of the world and how other businesses run, they’ve got something extra and practical to contribute.”
- Family employee performance - Be tougher, if you’re stricter about setting budgets than about performance against budgets. If you had a family member not pulling their weight, that’s a serious problem. Compatibility between family members is very important.
- Management and communication - Keep in communication with regular family meetings - talk to each other daily. When a family member or an employee is in a tight corner, you want them to know you’re there for them. Managers who don’t know how to look after people and who don’t know what’s going on “down the back” - such as their employees’ names or that an employee’s mother died - are stupid. You have to treat people fairly. Donelly says: “Give them a rev if they’re doing the wrong thing and pick them up and praise them when they’re right. The hardest things to instil in family are the skills of managing people.”
- Managing family members - Put family first, business second. If the business gets in the way of the family, the business is gone. Donelly says: “A negative in family business is you can’t push things as hard as you would with other managers. You really have to take into account the family’s domestic situation when you know it first hand. You tend to waive a few things, put up with things because you’re family. You’re a bit inclined to let deadlines go whereas with a paid manager you might not.”
- Succession management - Donelly says: “If you’re handing down the business to the next generation without ensuring that the person who runs it has the capability and not just a birthright, there will be a very large chance of [it] going down. Insurance policies provide the spouses with a substantial income for the rest of their lives in the case of death, serious injury or health problems; [they] also provide the company with sufficient funds to pay a fair price for her shares if she wants out. Have a formula for selling shares and an arbitrator listed as the person who will decide on their market value.”
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