IN SUPPORT OF FAMILY ENTERPRISE
As a sponsor of The Canadian Association of Family Enterprise (CAFE), our firm recently participated in CAFE’s annual Family Business Symposium held in Calgary. Over the course of three days, members of several prominent Canadian business families shared their experiences and approach to running a family enterprise. A particularly engaging and often poignant presentation was delivered by Peter Bermingham of Bermingham Foundation Specialists (BFS). The company traces its roots back to the construction of the CPR railway in the Crows Nest Pass with Peter representing a rare fourth generation leader of the family owned business. Recounting a string of bold business successes and potentially fatal challenges, Peter Bermingham laid out a series of lessons that all family businesses can learn from.
Reputation Means Everything – BFS has been involved in many of the major infrastructure projects in Canada since the turn of the century (including the war years). The company is particularly known for creating unique solutions to handle complex marine engineering tasks. Its association with a project in 1946 helped BFS secure a major contract in Holland in 2006. It’s also important to note, when the company ran into financial problems in the 90’s, Patrick Bermingham was able to buy time with suppliers because of the longstanding reputation of the company. Using the patent on its recognized engineering technology as collateral, he was able to secure financing which restored BFS to financial stability.
Find Innovation In Unexpected Places – As a boy, Peter regularly accompanied his family to job-sites. His grandfather’s adage was that you can learn more from a day at a jobsite than you can learn in a day at school – consequently Peter is ambivalent about school. Nevertheless, he ompleted his education, but not in engineering, he attended design school to obtain a Bachelor of Fine Arts. Peter actually trained as a sculptor, but within BFS his practical on the job experience, combined with his ability to visualize and design unique equipment has enabled BFS to produce solutions to unforeseen problems that often arise on construction projects. Peter once drew upon his family’s military heritage, recalling a scissor bridge design from WWII, which they modified for use on a job in the US.
Vision Needs A Plan – Patrick describes himself as a “Firestarter” in that he likes to take on difficult engineering problems and use his vision to solve them. However, firestarters eventually need someone to stoke the fire, and often require a firefighter to douse the flames. His analogy captures a sentiment echoed by other family business leaders, that entrepreneurs eventually have to step out of the business and turn the day to day operations over to a professional manager.The manager’s job is to understand the founder’s vision and in turn harness the right people and necessary resources to turn that vision into reality.
Make Your Own Definition of Succession – As a young man Peter somewhat resented that he was destined to work in the family business. However, he took over the company from his father, at a time when it was essentially insolvent, with only a handshake. He did so because he realized his elderly father did not have the fervour to save the company. When he eventually stabilised the business, he sold shares to his employees to tie their fortunes to BFS. Later, as the company returned to profitability, he sold a stake to a private equity firm to finance growth. In a surprising twist, the private equity investor itself went bankrupt and Patrick ended up buying back their stake. While he has always left open the option for his children to join the business, he views the chances of transferring a family business to a fifth generation as “one in a thousand.” As a result, after the company’s 100th anniversary his goal became to position Bermingham to last another 100 years and the best way to achieve this he felt was a sale to a division of Vinci, (the largest construction company in the world). He would have been content to walk away with an equity stake that allowed him and his family to pursue their personal ambitions, but today Peter continues on as chairman of BFS.
Ultimately, Patrick Bermingham refers back to his design roots to describe success in building a family business. He compares building a business to building a medieval cathedral. The process can take decades and the goal of any founder in the lengthy building process should be to ensure that they never see the last stones laid.