Gordon & MacPhail’s FD Norman Ross CA

This article first appeared in the July/August issue of CA magazine: https://www.camagazine.co.uk/july2020#!cover

How does an ‘outsider’ contribute to thoughtful succession planning for a family business with generations of experience? Nick Scott asks Gordon & MacPhail’s Finance Director Norman Ross CA

A decade ago, at a launch party in Edinburgh Castle, a teardrop-shaped bottle containing the oldest malt whisky ever produced was chaperoned, into a zone packed with revellers, by pipers and a military escort.

The hallowed liquid in question – “a delicate, fresh, vital, fruity whisky, with unusual attributes of waxiness and smokiness”, as noted connoisseur Charles MacLean put it at the time – had been poured into its cask on 15 October 1938 by the grandfather of the company’s then MDs, David and Michael Urquhart.

When your product is loaded with such generation-spanning heritage, succession planning takes on its own nuances – as Gordon & MacPhail’s Finance Director Norman Ross CA, who joined the Elgin-based company in 2013 after a nine-year spell as Financial Controller and Company Secretary at Highlands and Islands Airports, asserts. “Scotch whisky is a great fi t for a family business because it matures for a long time,” says Ross, who was recruited to succeed the last working member of the family’s third generation, the aforementioned Michael Urquhart, who was himself a CA and had spent 30-plus years studiously steering the business financially.

“A spirit we create today may not come to the market in a bottle for decades to come. That forces you to retain a long-term outlook to keep things alive. We’ve clearly got some challenges going on with the global pandemic at the moment, but the business remains focused on the long term – sustaining it to ensure that, when it comes to future generations becoming involved, there’s still a sustainable business in place for them to join.”

An example of this before Ross’s tenure would be the family’s decision, in 1993, to acquire the Benromach distillery in Speyside, bringing it back into productivity in 1998. More recently, Gordon & MacPhail is in the pre-construction phase of its second whisky distillery on the outskirts of Grantown-on-Spey – “another significant long-term investment decision that will sustain this family business well into the future”, as Ross puts it.

As we embark upon the third decade of the millennium, explains Ross, a business which turned 125 years old the week before our conversation “is managed on behalf of the shareholders by both family and non-family directors. Each time the business transitioned from one generation to the next, the company took a long-term view on succession, driven by the desire for the business to remain independent and family-owned.

As the business has grown, though, it’s become necessary to recruit people – both family and non-family – with the requisite skills and experience while always respecting both the heritage and the traditions of the brand.”

As such, Ross’s appointment was, he says, an example of a focus on longevity that is as prevalent in the company’s structure as it is in the skilfully coopered casks containing its commodity. “I think they acknowledged that investments in key skills at board level were a prerequisite to continuing that good

work,” he says. “I did joke at the time of my job interview that if there’d been a chartered accountant in the fourth generation of the family, I might not have got this opportunity.”

Scotch whisky is a powerful symbol of heritage, as maturing casks can remain untouched for generations – but the business remains outward-facing, continually reviewing market trends and consumer behaviours

His quip hints at the somewhat dynastic culture at Gordon & MacPhail, a company at which several members of the Urquhart family’s fourth generation are currently employed in key roles, while many who don’t have an official title within the business still take an active interest. “We really feel that it’s important to ensure that we’re communicating regularly with the entire family to ensure that everybody is up to speed on developments,” he says.

“Obviously, as a non-family member of the organisation, it’s incumbent upon me to ensure that everybody is experiencing the right flavour of communication, and that it advances in a way that recognises the heritage, and the company plans for the long term accordingly.

“I’m always thinking ahead to ensure we’re suitably resourced in the areas of the business that I look after. We’ve restructured recently, investing in a new layer of leadership to support the executive, ensuring that the business can confidently look forwards. But there’s clearly a balance to be achieved, in that we’re still a relatively small organisation. I’ve also recently taken human resources into my portfolio, and we’re focused on ensuring that the business is well equipped to navigate any resourcing challenges that may exist now or in the future.”

Liquid life

It’s impossible to overestimate the cultural cache whisky has in Scotland. Its first recorded mention was in the Exchequer Rolls of Scotland, in 1494, a period when it was referred to as aqua vitae (water of life).

This emotional resonance, according to Ross, along with Gordon & MacPhail being a smaller business, has the effect of making a brand culturally homogenous. “I was a little surprised when I joined the business from a slightly larger organisation as I did,” he says.

“Moving from aviation to scotch whisky is a bit of a jump, and because it’s a smaller organisation everybody is tied to the core purpose. There’s a sense of pride felt by everyone in our business – whether it’s those who fill the cask, expertly mature it, bottle it, label it, or indeed ship it to a customer. When you’re dealing with award-winning products, it’s hard not to feel that degree of pride. It crosses over all functions and roles in the business.”

The notion of being welcomed into a family enterprise, Ross says, is also a wind in his sails from a vocational perspective. “There’s a certain level of comfort that can be drawn from a business being prepared to invest for the long term, through good times and bad, and stick to its values – which are being exceptional, taking responsibility, promoting a sense of community and being respectful,” he says.

Of course, there’s more to future-proofing than collective morale: even when your product is one which is impervious to the ravages of trend and fashion, you still have to move with the times. “Scotch whisky is a powerful symbol of heritage, as maturing casks can remain untouched for generations – but the business remains outward-facing, continually reviewing market trends and consumer behaviours,” says Ross.

“These trends often lead to changes in packaging, marketing communications and sales channels. Despite these changes, one thing that won’t change is the company’s drive to produce high-quality products, underpinned by 125 years of experience, knowledge and heritage.”

While a brand of any size and nature is subject to such commercial rips and tides, Ross’s role is a niche career phase for him – and one for which his CA qualification prepared him extremely well.

“When it comes to the CA qualification, technical skills are a given, I suppose, but it also has the ethical honesty and accountability elements which have served me well in a sector that’s all about authenticity and heritage,” he says. “They’ve definitely assisted me in guiding the business through the immediate short-term challenges that we face and, more importantly, keeping focused on the long-term goal.

We’ve clearly got some challenges going on with the global pandemic at the moment, but the business remains focused on the long-term future – sustaining it to ensure that when it comes to the fifth, sixth and seventh generations to become involved, there’s still a sustainable business in place for them to join.”

So, would Ross recommend that other business leaders in family firms expand the gene pool when it comes to succession planning? “Doing right for the business is the number one priority,” he says.

“The family plays a strong role, and who better to talk about the authenticity of our heritage than those family members who are working in the business? That said, we also acknowledge that from time to time we’ll need to bolster the business with broad skills from the wider market. A balanced view on that is imperative.”

Clearly, Gordon & MacPhail is doing something – lots of things – right. Figures up to February last year show its overseas sales climbing 32%, to £14.2m, more than compensating for the fact that UK sales fell by 7% to £26.7m. Ross puts the latter down in part to a “strategic decision to exit the UK wholesale operation from wine and beer categories to focus on the growing premium spirits sector, including single malt whisky and gin”.

Meanwhile, when it comes to that “oldest whisky ever bottled” accolade, there’s a new kid on the block. A bottle of the company’s Generations Mortlach 75-Year-Old – dubbed the “Ingrid Bergman of single malts”  by renowned whisky pundit Charlie MacLean – which was launched at London’s Royal Opera House in 2015, sold in Hong Kong for approximately £18,000 in May. Elsewhere, whisky sales have shot up by 110% in the first four months of 2020. Perhaps, when it comes to succession planning, a lot can be learned from the small, heritage-focused businesses that dot these storied isles.

Norman Ross’ career:

• Education Accounting, Edinburgh Napier University and Abertay University
• 1995: Joins Frame Kennedy & Forrest and starts ICAS training
• 1999: Qualifies as a CA
• 2000: Joins Wylie Frame as Audit Senior
• 2001: Joins the Kelvin Partnership as Audit Manager
• 2003: Joins Highlands and Islands Airports, promoted to Company Accountant, 2005, and Financial Controller, 2009
• 2013: Appointed Finance Director at Gordon & MacPhail