SCANDINAVIAN BUILDING SERVICES: PRESERVING THE PAST AND
ENSURING THE FUTURE CASE STUDY SOLUTION
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pl
SYNOPSIS
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Sa
The case delves into the Hay family’s journey during a sudden and challenging turn of events. On October
31, 2017, patriarch Terry Hay was diagnosed with stage four pancreatic cancer and given three weeks to
live. This grim prognosis placed the Hay family on an unexpected trajectory, as they had to not only
n
confront Terry’s health crisis but also grapple with the impending transition of their family business,
Scandinavian Building Services Ltd. (SBS).
tio
The Hay family’s connection with SBS, a janitorial company established in 1956, spanned generations.
Terry, his wife Wilda, and their children, Candace, Melanie, and Russell, were entwined in both familial
lu
and business ties. The Hays had diligently prepared for the transition from Terry’s role as the company
founder to a new era of leadership, but the speed at which Terry’s illness progressed prompted an
So
accelerated and unforeseen course of action. Terry’s cancer treatment necessitated immediate decisions on
The Case Solution Starts From page 6
,ASSIGNMENT QUESTIONS
1. How should the Hay family transition SBS’s leadership?
2. What strategic direction should SBS pursue?
3. How should SBS honour and preserve Terry’s legacy?
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m
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ANALYSIS
1. How should the Hay family transition SBS’s leadership?
explain that family businesses operate
n
as dynamic systems that include three primary circles: family, business, and ownership (see Exhibit -1).
Thus, when thinking through a succession plan for a family firm, it is important that each of thes e
tio
systems is attended to.
lu
share Exhibits -2 and -3 to help
students further organize their thoughts. These exhibits use selections from Baron and Lachenauer and
So
from Tagiuri and Davis (see Relevant Readings) to create a succession-planning framework that accounts
for the potentially significant impact succession events can have on family, ownership, and business
dynamics within family enterprises. Exhibit -2 offers a more detailed framework that could be presented to
students to think through succession in a consulting or organizational context, and Exhibit -3 offers a less
detailed framework that could leverage within the time bounds of a class session.
“mix and match” aspects of these frameworks and integrate them into course elements so
students can develop a more holistic understanding of the dynamics of a succession event within a family
enterprise. Students should be encouraged to use these frameworks as guides rather than as checklists, and
then they can use the remaining time to formulate their recommendations as either individuals or groups.
An example of a succession plan for SBS is shown below:
Family
• Family Communication
o Objective: Ensure all family members are informed about and engaged in the succession process.
o Action Steps:
The Case Solution Starts From page 6
, – Hold regular family meetings, both formal and informal, to discuss the status and details of the
transition.
– Use a neutral mediator or family business consultant to address any potential conflicts or
disagreements.
– Develop a communication charter that outlines how and when information about the succession
will be shared with family members.
• Roles and Boundaries
o Objective: Clearly define the roles of family members during and after transition.
o Action Steps:
– Map out the expected roles for each family member, whether they are directly involved in the
business or not.
– Create a transition timeline that highlights significant milestones and events.
– Establish boundaries between family and business matters, ensuring that conflicts in one domain
do not spill over into the other.
• Family Support
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o Objective: Support the emotional and psychological needs of family members during the transition.
o Action Steps:
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– Establish a family council or similar structure to address concerns and support family members.
– Provide resources such as counselling or coaching for family members struggling with the
m
transition.
– Organize family-bonding activities to reinforce unity and shared goals.
Sa
Business
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tio
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So
The Case Solution Starts From page 6
, EXHIBIT -1: THREE CIRCLES MODEL
Family shareholders not
involved in the business
FAMILY
OWNERSHIP BUSINESS
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pl
m
Owner executives with
Sa
no family connection
n
tio
lu
So
The Case Solution Starts From page 6
, EXHIBIT -5: ANALYSIS OF THE JANITORIAL INDUSTRY IN CANADA
Threat of new entrants: Moderate
• Low capital requirement: The initial investment needed for a janitorial business is relatively low,
making it easier for new entrants.
• Local market dynamics: Local knowledge and relationships can serve as barriers to new entrants.
• Regulatory hurdles: Varying provincial regulations can make it difficult for new companies to enter
the market at scale.
Bargaining power of suppliers: Moderate
• Specialized supplies: While many products are commoditized, exclusive or eco-friendly cleaning
solutions provide some suppliers with increased leverage.
•
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pl
m
Bargaining power of buyers: Moderate to strong
• Cost sensitivity: Clients are often very price sensitive.
Sa
•
n
tio
Threat of substitute products or services: Low
• DIY cleaning: Some small businesses may opt to do their own cleaning, but this option is not likely
for larger contracts, and even smaller organizations may be reticent to take on cleaning tasks in a
lu
post-COVID context.
•
So
Competitive rivalry: Medium
•
Summary
The Case Solution Starts From page 6
ENSURING THE FUTURE CASE STUDY SOLUTION
e
pl
SYNOPSIS
m
Sa
The case delves into the Hay family’s journey during a sudden and challenging turn of events. On October
31, 2017, patriarch Terry Hay was diagnosed with stage four pancreatic cancer and given three weeks to
live. This grim prognosis placed the Hay family on an unexpected trajectory, as they had to not only
n
confront Terry’s health crisis but also grapple with the impending transition of their family business,
Scandinavian Building Services Ltd. (SBS).
tio
The Hay family’s connection with SBS, a janitorial company established in 1956, spanned generations.
Terry, his wife Wilda, and their children, Candace, Melanie, and Russell, were entwined in both familial
lu
and business ties. The Hays had diligently prepared for the transition from Terry’s role as the company
founder to a new era of leadership, but the speed at which Terry’s illness progressed prompted an
So
accelerated and unforeseen course of action. Terry’s cancer treatment necessitated immediate decisions on
The Case Solution Starts From page 6
,ASSIGNMENT QUESTIONS
1. How should the Hay family transition SBS’s leadership?
2. What strategic direction should SBS pursue?
3. How should SBS honour and preserve Terry’s legacy?
e
pl
m
Sa
ANALYSIS
1. How should the Hay family transition SBS’s leadership?
explain that family businesses operate
n
as dynamic systems that include three primary circles: family, business, and ownership (see Exhibit -1).
Thus, when thinking through a succession plan for a family firm, it is important that each of thes e
tio
systems is attended to.
lu
share Exhibits -2 and -3 to help
students further organize their thoughts. These exhibits use selections from Baron and Lachenauer and
So
from Tagiuri and Davis (see Relevant Readings) to create a succession-planning framework that accounts
for the potentially significant impact succession events can have on family, ownership, and business
dynamics within family enterprises. Exhibit -2 offers a more detailed framework that could be presented to
students to think through succession in a consulting or organizational context, and Exhibit -3 offers a less
detailed framework that could leverage within the time bounds of a class session.
“mix and match” aspects of these frameworks and integrate them into course elements so
students can develop a more holistic understanding of the dynamics of a succession event within a family
enterprise. Students should be encouraged to use these frameworks as guides rather than as checklists, and
then they can use the remaining time to formulate their recommendations as either individuals or groups.
An example of a succession plan for SBS is shown below:
Family
• Family Communication
o Objective: Ensure all family members are informed about and engaged in the succession process.
o Action Steps:
The Case Solution Starts From page 6
, – Hold regular family meetings, both formal and informal, to discuss the status and details of the
transition.
– Use a neutral mediator or family business consultant to address any potential conflicts or
disagreements.
– Develop a communication charter that outlines how and when information about the succession
will be shared with family members.
• Roles and Boundaries
o Objective: Clearly define the roles of family members during and after transition.
o Action Steps:
– Map out the expected roles for each family member, whether they are directly involved in the
business or not.
– Create a transition timeline that highlights significant milestones and events.
– Establish boundaries between family and business matters, ensuring that conflicts in one domain
do not spill over into the other.
• Family Support
e
o Objective: Support the emotional and psychological needs of family members during the transition.
o Action Steps:
pl
– Establish a family council or similar structure to address concerns and support family members.
– Provide resources such as counselling or coaching for family members struggling with the
m
transition.
– Organize family-bonding activities to reinforce unity and shared goals.
Sa
Business
n
tio
lu
So
The Case Solution Starts From page 6
, EXHIBIT -1: THREE CIRCLES MODEL
Family shareholders not
involved in the business
FAMILY
OWNERSHIP BUSINESS
e
pl
m
Owner executives with
Sa
no family connection
n
tio
lu
So
The Case Solution Starts From page 6
, EXHIBIT -5: ANALYSIS OF THE JANITORIAL INDUSTRY IN CANADA
Threat of new entrants: Moderate
• Low capital requirement: The initial investment needed for a janitorial business is relatively low,
making it easier for new entrants.
• Local market dynamics: Local knowledge and relationships can serve as barriers to new entrants.
• Regulatory hurdles: Varying provincial regulations can make it difficult for new companies to enter
the market at scale.
Bargaining power of suppliers: Moderate
• Specialized supplies: While many products are commoditized, exclusive or eco-friendly cleaning
solutions provide some suppliers with increased leverage.
•
e
pl
m
Bargaining power of buyers: Moderate to strong
• Cost sensitivity: Clients are often very price sensitive.
Sa
•
n
tio
Threat of substitute products or services: Low
• DIY cleaning: Some small businesses may opt to do their own cleaning, but this option is not likely
for larger contracts, and even smaller organizations may be reticent to take on cleaning tasks in a
lu
post-COVID context.
•
So
Competitive rivalry: Medium
•
Summary
The Case Solution Starts From page 6
