Family firms come in all shapes and sizes, and one of the more unusual is JML, a British company set up by John Mills that you might call a deliberately one-generation family business. At some point in JML’s nearly 30-year history, all of John Mills’ children and their spouses have worked for the company although these days only one of his daughters, Caroline, a board member, remains involved.
Mills’ unusual career began at Unilever, where he lasted just “six or nine months” before quitting to become self-employed. His break came when he was selling a DIY product at an exhibition, and realised that if he demonstrated it he would sell a lot more. This led to a business selling products in-store via television and JML was born, in 1986.
It now also has shopping channels and employs about 350 staff. It has a turnover of “just under £100m per year”, 40% of which comes from overseas - it has joint ventures or subsidiaries in 20 countries, and sells its services and products in over 65 territories.
Mills’ interest in business came, at least in part, from his own parents. “My father was a company doctor [ie, a turnaround consultant, or troubleshooter] who worked for several big companies like Allied English Potteries, a big machine tool company, and a carpet company - a variety of different sorts of operations,” he says.
“My mother’s maiden name was Lloyd and she was a scion of the Lloyds banking and steel dynasties. I absorbed some business knowledge from them, but I think that I have just been very interested in how businesses worked from a young age, I had an entrepreneurial urge and I was never very keen at working for anybody else.”
His children have come into the business, but have evidently been under no pressure to stay. “They were all interested in coming in, and some of them were there for quite a long time, then for one reason or another they left,” he says.
“One wanted to start a business on his own - with the husband of another one, actually - it was very amicable. Another was in the political world and worked for us for two or three years and then went back to that. My eldest daughter worked with us for quite a while, but she didn’t get on terribly well with one of the people who was here.”
Was it tricky working with his family? “There is always a bit of a tension with people who are not family members, there is a slight feeling that the family will get favourable treatment and you have to be very careful about managing that,” he says. “I think that is just one of the tensions involved in running a family business. You have to be as fair and equable as you possibly can be and avoid favouritism and giving people the feeling they are being blocked.”
That is one of the cons of family businesses, but the pros are very clear, Mills says. “On the whole, family-run businesses tend to be regarded by the people who work for them as being more stable, more coherent, and more long-lasting, resilient and viable. There is an element that compensates on the other side.”
He is an advocate of family businesses, although not a cheerleader. “I do think we tend to undervalue family companies in the UK to some extent,” he says. “We run a subsidiary in Germany so we see quite a lot of the family business culture there.” He says that their long-termism is a good thing.
So should government do more to help out family companies? “Actually I think they get a pretty good deal when it comes to tax reliefs on passing on shares and that kind of thing, and I suppose that companies ought to be able to compete without getting a lot more government help than anyone else.”
One reason we are not so family business-oriented in the UK is the City’s dominance, he thinks. “City finance is part of the problem, that it has a shorter horizon than people in operating businesses. I think that people are obsessed with IPOs and selling after two or three years.” Do people try to convince him to sell? “Oh God, every day I get letters from private equity people and God knows who else.”
JML is owned by about 30 of its managers, and there are no outside shareholders. “First of all we don’t really need the money, and secondly dealing with shareholders or private equity takes a lot of time. We think that people in JML are quite significantly incentivised by the fact they own the company, but we also have complete autonomy in what we do. I think that’s the best solution.”
When he retires the business will not pass to his children, but will be taken over the management. However, the family will still have a big say in their father’s legacy. “I would like to leave a reasonable amount of money to my children and grandchildren, but that’s probably going to leave quite a lot left over, and the proposal is to turn the remainder into a trust, which will be run by Caroline and the CEO,” he says.
The shape of family firms to come?