Sir Michael Bibby heads up one of the UK’s most successful family businesses called the Bibby Line Group. It’s success is probably best measured in the fact that Bibby is still prospering today more than 200 years after its establishment. Michael is the sixth generation of the family to run the company, which is famous for shipping, but has since diversified into a whole host of other sectors, including finance and supermarkets.
The family have been big on stewardship and community, but Michael also takes a slightly less conventional approach to running the Bibby Group and how he interprets what’s behind successful family businesses. Here’s five things family businesses can learn – or at least observe – from his approach.
Debt is good
Family businesses are often admired for being frugal. Many of them don’t like debt and avoid it as much as possible. But Michael says that debt saved the family business. In an interview on BBC radio a few years ago he said: “The only reason we survived the really bad recession in the early 1980s was because my father had borrowed quite a lot…” He also said in the same interview that gearing up the business has helped Bibby to grow and he would continue to follow this approach.
Family businesses sometimes get sentimental about their past. That may suit them and help them to prosper, but Michael doesn’t have much time for this type of sentiment. He said in an interview for the EY Family Business Yearbook last year after Bibby Group won an award for excellence that: “You can’t get too bogged down with talk about stewardship from one generation to the next. That’s not going to sustain the business.”
Family office structure
The business is run as a mini-conglomerate, or more precisely as a family office, as Michael has said in the past. “We take a portfolio approach so we have lots of different investments,” he told the BBC. Bibby managers risk by having a diverse portfolio, so if one business goes bust, it doesn’t bring down the whole company.
Family ownership is forever
Rarely do family business owners say the business will be family owned for ever, but Michael did. In the EY Yearbook interview he was asked about how long he sees the family controlling the business. He responded by saying: “forever”.
The Bibby family are anything but mad, but Michael referred to a remark his father made in the EY Yearbook interview about Bibby’s commitment to shipping. “Perhaps my family has an inherited streak of madness…The ship owning type of madness is an advantage as it helps understand traders and brokers who are equally mad, but in a different sort of way.”