It’s often said that when a storm comes, some people build windmills – and others build walls. The idea is that when people and businesses plan ahead in tough times, and harness the power of a crisis or disruption, they emerge stronger than when the crisis hit.
I think this is something that we should all bear in mind as we face up to the impacts of COVID-19. And it’s particularly relevant for family business owners for a number of reasons.
This is also the time to turn to your next generation for leadership
Most companies are facing major business continuity challenges. Cashflows may be faltering, sources of funding are likely to be uncertain and operations and supply chains could be facing discontinuity and dislocation. On top of this, the workforce may be depleted and fearful. For owners of family businesses, though, the coronavirus crisis also raises issues around ownership. Ownership issues are just as critical as the business challenges, and potentially even harder to manage.
PwC’s Owner’s Agenda framework focuses on four aspects of ownership that are distinct but equally important to business-owning families: values and purpose, governance, continuity and family wealth.
With these in mind here’s some advice for based on what we have been experiencing as we mobilize to support our family business clients globally:
Values and purpose
Family owners need to stand united, define their commitment to their business and speak with one voice. They should try to send a very strong message to their employees, business partners and public that they are backing the business.
This is important because it will reinforce their values and help build trust and confidence. They will need the support of their workers and their customers when the situation begins to return to normal.
This is also the time to turn to your next generation for leadership. The younger generation plays a huge role both in the business and in the family. With remote working and digital solutions front of mind, now is the time to leverage the digital savvy of the younger family members as this can make the difference between falling behind and staying ahead. It also gives the next generation an opportunity to prove themselves.
As digital natives, they can be involved in digital transformations and in activating social media effectively because it is critically important to have a clear and confident voice in the market. This crisis can be an opportunity to accelerate the bridging of the generational gap and fast track generational transitions.
Think of your family council as the beating heart of your organisation. Assess if there is anyone else who should join from the family who could bring unique skills and experience to help in the current situation. It may also be time to look to your board of directors: are members fully prepared to manage the current crisis or do you need to as someone with more expertise to step in. Think about the role that everyone can play to add support but also think about how to proactively manage risk.
It is, of course, key for you to assess thoroughly the impact of Covid-19 on your personal finances, estate and investments. However, an area many of our clients have been asking about is philanthropy. What can they do to redirect their giving where it is needed most.
There is no rulebook for this crisis, so our advice is to start with your immediate community. Talk to your employees, ask them what they see as the most pressing need right now. For those who can, this is a great way to put your money where your values are.
I hope these recommendations will resonate with you as a family business owner. If I can offer a closing word, it is that holding to your values and purpose is the most powerful thing you can do right now. These are what give family businesses their competitive advantage.
The owners that are acting on their values are building windmills that draw power from the storm and will enable their businesses to emerge stronger. Now’s the time – and opportunity – for everyone to do the same.
Peter Englisch is global family business leader for PwC
In my next Viewpoint, I’ll discuss why the Coronavirus crisis presents business-owning families with a great opportunity to bridge the generation gap.