As I write this — from home, since our team is now working remotely — the United States is in the midst of a public health crisis. The coronavirus has disrupted business operations, wreaking havoc on supply chains and even entire industries, such as restaurants.
Adding to the stress, on March 16 the Dow recorded its worst one-day point drop in history and its worst performance since Oct. 19, 1987.
This spring has been a time of challenge for most businesses. Multigenerational family businesses, however, have a leg up. They’ve endured rough times before, and have survived.
World War I, the Great Depression, World War II, the recessions of 1973-75 and 1981-82, the 9/11 terrorist attacks, the Great Recession of 2008-10 — if your family enterprise emerged intact after these historic events, you have a history of resilience to learn from.
Perhaps your family has also endured other crises — a fire that destroyed a headquarters or plant, a hurricane or tornado, an untimely death of a business leader. What strengths enabled you to keep your business going?
As COVID-19 began to make its way across the country, I spoke with Kristi Daeda, president of the Family Business Consulting Group. She told me it’s helpful in tough times for families to review their history and think about the values that enabled them to stay unified and resolute during stressful times in the past. How can you apply those lessons to today’s situation?
These discussions can help unite shareholders behind difficult financial decisions that might be required in a downturn. Today’s sacrifices might be easier to endure if viewed in the context of past family support for the business.
Family firms are known for their strong partnerships with their customers, suppliers and communities. These partnerships will likely work to family businesses’ advantage as they take steps to recover.
In a Family Business webinar on April 14 entitled “Accessing Your Resilience,” Debbie Bing and Nancy Drozdow of CFAR suggested this response strategy: Take action, assess how your response is working, and adapt accordingly.
They also noted that short-term survival strategies in a crisis can lead to long-term opportunities. A wholesale restaurant supplier that began delivering groceries to individuals may have discovered a new business opportunity. A NextGen who steps up could emerge as a future leader. Families’ video calls to check in with each other and get business updates could become the glue that unites a far-flung cousin consortium.
In hard times, it’s important to make clearheaded decisions. If you have a board with independent members, you have an advantage: a group of objective, experienced individuals who can examine your recovery strategy and ensure it’s sound (or help you shore it up).
Fortunately, today’s technology makes it easier to convene meetings of families, staff and boards even when everyone is sheltered in place. Creativity and positivity will help us all get through these challenging times. Hunker down, communicate often and please remember: safety first.