For decades after COVID-19 finally fizzles out, scholars in many disciplines will be analyzing the lessons learned from this crisis. We don’t need the advantage of hindsight, however, to recognize one key point: The businesses that so far have been best able to withstand the economic and public health emergencies are those that could implement change quickly.
Companies threw their strategic plans out the window as scientists urged people to stay home and the economy tanked. In many cases, survival has required dramatic change: to staffing levels, to factory floor design, to deployment of capital, to organizational priorities and even to entire business models. Nationwide unrest following the killing of George Floyd by a Minneapolis police officer on May 25 added to the challenges America must confront as a nation.
Which businesses have been best equipped to make major shifts on the fly? Privately owned companies with low levels of bureaucracy and a long-term focus tend to be the most adaptable. Most family businesses fit that description. But in this instance, continuing operations while maintaining goodwill has required an additional factor: strong relationships.
In this issue, we highlight family firms that have persisted during the pandemic while prioritizing team members’ health as well as preservation of the family’s investment. Some of these enterprising families have created a new business ventures they may pursue even when the crisis has passed. Many are drawing on the “credit line” of mutual respect they established with their employees through years of fair treatment and transparency.
Also in this edition, I report on how family values and family dynamics factored in as multigenerational business families plotted their response to the spreading coronavirus and faltering economy. With so much at stake, complexities escalated quickly.
What considerations should receive top priority? Which practical steps should we take? Who should be involved in the decision making? Clarity hasn’t necessarily come easy. As several family business advisers pointed out to me, many of these questions have not had a single right answer.
It’s far too early to tell what the long-term effects of the crisis will be, in terms of both business sustainability and changes in family interactions. More tough decisions are likely on the horizon, and families will have to work to reach consensus.
On the other hand, advisers have reported that early on in the pandemic, they saw families coming together to share updates on their business and check in with each other. Agreements on donations to help community members affected by COVID-19 were arrived at quickly. Those wins might bolster families as they head further down the bumpy road ahead.
Success going forward will depend on strong relationships with family members, employees, customers and suppliers. Many family business leaders are well acquainted with the fine art of relationship building. Those CEOs are starting off on the right foot.
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