Despite their reputation for resilience, optimism and agility, most family businesses have been under significant pressure to respond to the general health, safety, and welfare challenges introduced by the COVID-19 pandemic, along with the operational disruptions to their business. This series explores how the same traits that set family businesses apart are creating authentic opportunities for resilience, growth, and recovery.
The introductory article in the Resilient Family Enterprise series examines how COVID-19 brings new focus to family business issues like succession planning, values and purpose, and legacy.
Upcoming articles will include the following topics:
• Purpose and trust
• Power and performance: The role of governance
• Beyond business: Philanthropy and strategic investing
• The post-COVID workplace
• Your family business: Planning with a 100-year horizon
• Well-being and health: The enterprise, the family and the individual
• What’s next for family businesses?
In recent years, companies across the economic spectrum have increasingly been engaged in a rethink about what drives them beyond making a profit. Many family businesses had a head-start on this. At one point in time or another, every family business founder had to come to grips with this question of purpose.
The global pandemic has shaken businesses to their core, impacting relationships with employees, customers, suppliers, communities, and other key stakeholders. Amidst this upheaval, family business leaders are looking for ways to reconnect with these constituents and even extend their reach. And that search has them thinking anew about the intersection of purpose and trust.
Even during the most stable of times, family enterprises are challenged to balance two simultaneous priorities - the natural progression of the enterprise itself and the evolution of the family. These sometimes competing priorities can become accentuated when a crisis like the COVID-19 pandemic comes along and adds fresh urgency to the ever-expanding complexities and challenges involved in running a family enterprise.
COVID-19 is teaching family businesses many lessons about preparedness, agility, and adaptation. It is also underscoring the need for critical self-assessment—a hard look at what’s working, what isn’t, and what’s not even being discussed that probably should be. That’s what good governance is all about today—building resilience.
While family businesses play a vital role in the giving ecosystem, a cascade of developments have prompted a seismic shift in philanthropy and strategic investing this year, accelerating the need to think more carefully and strategically about giving.
As family businesses assess the ways they can help combat the humanitarian crisis COVID-19 has unleashed, the severity of the pandemic has changed the tenor of philanthropic pursuits and investing decisions.
A natural starting point for family businesses in determining purpose beyond profit is defining the causes they support – and ensuring there are mechanisms for accountability built into philanthropic and strategic investing efforts.
Before 2020, the term “workplace” generally meant a dedicated office space for people to work together. And while there was a growing trend toward more remote work, COVID-19 has accelerated that movement, forcing businesses to rely on distributed networks of employees connected only by the strength of their internet connections. Now comes the question of what the workplace looks like once the crisis subsides.
Is it too early to start thinking about the year 2030? Or even 2040? Not if you’re a family enterprise looking to stay relevant. As companies work to recover from the COVID-19 pandemic, attention will begin to move from an “interim normal” to a “better normal” that capitalizes on their resilience and agility.
Going public can be a significant departure for family business leaders used to running their own show, and enjoying the benefits of being private. But against the backdrop of the pandemic, sales of shares to the public are gaining fresh attention from many family enterprises. They increasingly see an IPO as a lever they can pull to maintain some control over the business while keeping their options open for their future involvement.
Weighing the potential pros and cons takes careful deliberation, but the sooner a family can agree on direction, the sooner they can start planning for the future they deserve.
For many family business owners, COVID-19 has been a clarifying experience. They have used the crisis to make transformative investments, accelerate change, and rethink their future. For private family enterprises that want to stay that way, the current liquidity landscape offers many financing options, including banks, public debt markets, private debt funds, and private equity firms. There may not be a better time for family enterprises to access the capital they need to realize their biggest ambitions.
More than a year ago, Deloitte Private launched the Resilient Family Enterprise series to explore issues impacting family businesses as they navigated the COVID-19 pandemic, identifying shared challenges and opportunities for growth. Now, emboldened by innovation and a long term-perspective, companies are moving beyond respond and recover to thrive, creating a more resilient future.