James Donaldson & Sons (JDS) is a family of businesses specialising in the processing, manufacturing, merchanting and distribution of timber and associated building products. The business was founded in 1860 and celebrated its 160th Anniversary in 2020.
The JDS Group comprises a range of companies including timber importer and distributor James Donaldson Timber Ltd, engineered wood product manufacturer Donaldson Timber Engineering Ltd, timber merchant MGM Timber (Scotland) Ltd, insulation specialist James Donaldson Insulation Ltd, and Nu-Style Products Ltd, a fabrication specialist. In 2020, the Group also acquired Rowan Manufacturing Ltd, and Smith & Frater Ltd. Paul Andrews spoke to Michael Donaldson, Executive Chairman and the sixth generation of the family firm to find out more.
JDS has grown to become one of the UK’s leading independent processors, manufacturers, merchant and distributor of timber and related products. From one small branch originally in Fife, today JDS has over 1000 employees across 33 sites.
Since 1860 JDS has grown and strengthened through acquisition, diversification and an unfaltering focus on quality and service. At present we have a portfolio of eight specialist businesses within the group which are operated by the best people in the industry.
Like many who grew up in an already established multi-generational family firm, Michael has fond memories of the business. As he explains, “My first memories of the family business are driving to one of our sites with my grandfather on a Saturday morning. He would always go in to make sure everybody was OK and that operations were running smoothly. This ethos has continued too as I think there is something to be said for the senior leaders in the business to be seen on site during the tougher shifts, and to be known throughout the business, something that really came to the fore for many family firms during the past year or so too.”
He is joined in the business by his brother, Andrew Donaldson who is currently CEO and their father, Neil Donaldson retired in July 2020.
As Michael explains, “I am sure that like most family business owners the business formed a huge part of our lives. There were always conversations on business topics when Andrew and I were younger, and I remember my father and grandfather having their scheduled weekly catch up meetings.”
“My first job was even working in the business, on the back of a saw, when I was probably too young to have been there in the first place” he adds.
When it comes to joining JDS, Michael joined the family business in 2002 straight after qualifying with his honour’s degree from University. As he continues, “I took on a variety of roles across the group whilst gradually learning and developing my skills and knowledge in the areas which were most likely to be advantageous to me going forward.“
“In 2007, I had the honour of being the first ever student to graduate with a Timber Industry Management degree from Edinburgh Napier University. Shortly after graduating, I joined Donaldson Timber Engineering as General Manager of our Scottish Division, a role which I did until 2011. I then moved internally within the Group to join the leadership team at James Donaldson Timber from 2011 to 2015. I moved again in 2015 and joined MGM Timber as Commercial Manager, and shortly after Commercial Director in 2017,” continues Michael.
“Since 2018, I have been working for JDS at Group level, firstly as Deputy Chairman, and most recently Executive Chairman, after my father retired in July last year and handed over the reins. My role as Executive Chairman involves leading our board of directors and acting as the main point of contact for all of our shareholders, both family and colleagues.”
JDS dates back to 1860 and has stood the test of time when other businesses have not so what has helped them survive and thrive? “JDS has benefitted over the years from strong leadership, being guided by our values and being prepared to invest in the future by recruiting the most talented people in the industry,” explains Michael. “This has clearly helped, together with our core values that are integrated into the culture of who we are as a business. Our core values are People, Family, Customer, Integrity & Sustainability and every person working for the JDS group, no matter which business they are part of, understands the importance of our values. We test and measure ourselves against them regularly, to ensure they guide our approach and behaviour,” he adds.
As Michael continues, “Family is one of our core values. Our core values genuinely are at the heart of the way we operate and guide our decision making daily. The fact that our business is still within the Donaldson family six generations later proves that family ownership is part of our brand narrative to this day. Furthermore, as a family business, we pride ourselves on using these values to behave ethically, morally and responsibly at all times. Our people, customers and suppliers recognise this and see that this adds value to their business and differentiates us from competitors.”
Family business are unique in so many ways and the contribution of family firms continues to be celebrated as Scottish family firms like JDS are the engine room of the Scottish economy. In fact, the Top 100 Scottish family firms collectively generate more than £22 billion annually and employ over 111,000 people.
As Michael adds, “Family firms are unique and even if you aren’t part of the Donaldson family, we try to make every employee across our businesses feel like they are part of something bigger than themselves, as one big family. We don’t just set our goals for the next quarter or year, we think in years, and even decades ahead. This gives our employees a sense of stability and they tend to stay working with us for many years.”
Running a family business is a balance and for some, as well as the positives there may be downsides too. As Michael continues, “Anybody can find negatives in any business they work for, so our role as leaders of this business is to make sure that there are far more positives than there are negatives. If I had to pick one potential frustration, rather than disadvantage, of working in a family business it would be, it could be argued, that family businesses tend to err on the side of caution and as a result sometimes grow at a slower rate than other businesses might. It is debatable however whether slower more sustainable growth is better or worse than quick expansion.”
Family businesses that have evolved over longer periods of time tend to add more structures and governance frameworks to help prepare and protect the business for the future. JDS is now exception and in many ways leads the way in their long term view. As Michael explains, “For many years now we have used the phrase ‘a family business, held to PLC standards’ and this has helped with the governance of the business for the last 20+ years. We have 4 non-executive and three executive directors who sit on our main board and three subcommittee’s (remuneration, audit, nominations) below the main board which all have terms of reference to work too.”
“I believe that the governance structures we have in place are suitable and appropriate for a business of our scale to ensure the long-term sustainability of the group,” he adds.
For long standing family firms like JDS the succession planning process is always on the mind. As Michael explains, “For us the future depends on the next generation and on their career aspirations. Andrew and I are custodians of this family business for the next 20 years or so, and of course it would be great to see our children come into the business when they are of age, but it will be up to them. G7 are all still at school, or even too young to be at school yet, so there is plenty of time before any decisions need to be made on their future aspirations.”
As the sixth generation leader of the business Michael has obviously been through a journey with the family business, moving from the next generation to the now generation and leading from the front. He is a great advocate for next generation members to follow their dreams, adding that “For next gens thinking about joining their family businesses, they should not be afraid to challenge the norm and be curious. Just because things have been done a certain way in the past, does not mean it’s the best way. If you have an idea, share it. Always be learning and always be curious as there is a lot to learn outside of your family business bubble.”
For Michael, it is clear that family business is all about continual learning and improvement but when looking back to the start of the journey, what advice would he give to his younger self before embarking on the journey?
“Don’t be so hard on yourself, trust your instincts more and just be yourself,” he concludes.
Clearly, this is a family business that has come a long way since it was founded way back in 1860. Clearly this business has a solid past and it is clear to see that a promising future lies ahead.