The impact of the pandemic came as an immediate shock to most businesses. Family and non-family businesses alike had to act quickly to protect their companies from a sudden drop in sales and supply chain disruptions
For many family businesses, an unexpected and positive outcome of the pandemic was the gift of time.
With a slowdown in their business operations, several family business leaders found they had the time and agility to diversify, to explore ideas for new products, new markets and extensions of their businesses that had been simmering in the background for years.
Because business families have been so committed to sustaining entrepreneurship across the generations, a deeply resilient instinct has been embedded in their DNA.
With the sudden arrival of COVID-19, those instincts triggered immediate financial actions, such as carefully managing their cash flow and liquidity requirements during a period of decreased customer demand and supply chain disruptions.
Family businesses have identified three core strategies to respond to the impact that COVID-19 has had on their business and family legacies:
Social responsibility: addressing the impact of the pandemic on the welfare of society as a whole and the needs of all their stakeholders including employees, customers, suppliers and local communities.
Business transformation: pivoting their businesses reactively to address the immediate impact of COVID-19, and proactively to ensure, that new business models are using resources responsibly, while also supporting the growth and adaptability of their business in a rapidly changing external environment.
Exercising patience: leveraging their patient capital to understand the full impact of COVID-19 on their businesses and others in their industry, and observing the immediate actions that many of their competitors were required to take.
Regarding the skill of sustaining and protecting family business, Mr. Vangelis Apostolakis Deputy Senior Partner, Head of KPMG Private Enterprise, KPMG in Greece noted:
"As far as family relationships are concerned, COVID-19 has been an amplifier. If relationships were bad, they became worse. But if they were good, they’ve become even better and more constructive, and we are seeing many families coming closer together as they share a common focus to protect their business and their legacy. Discussions about succession have been amplified as well. It was a shock to some older generation family leaders who realized that they didn’t have a plan for the skills that were required to respond quickly to an unanticipated event. As a result, I have seen an increase in the delegation of responsibilities to younger family members, and although that may be helping to make them better-prepared to take on further roles in the business, the risk of delegating poorly or to the wrong person due to haste, should not be neglected."
