COVID-19: Family Businesses - Protection and Resumption
20th May 2020
Highlights from working with families in business during the pandemic.
These two key areas continued to grow in significance as we work through the current challenges with family and owner managed businesses.
Capturing both the unique challenges and potential of family and owner managed business is vital to both protection and resumption.
Some testing issues emerge in the sense of surviving and coping, but also in getting into position where resumption is hopefully easier, simpler and potentially quicker.
With a proper focus, this is where family businesses can take advantage of their often more flexible structures and dynamics to respond and adapt.
There is a need for leadership to step up, and in some cases step out from the shadows. Alongside this, the same responsibility falls to advisors, of whatever discipline, to engage perhaps more strategically in expediting business protection or resumption priorities.
In some cases, whole families are both involved in and dependant on the business. This of course can include several individual households and incomes, highlighting the need to rally around a clear family and business need.
It is certainly a time for sticking to your vision and where need or opportunity call, meeting around a revised and shared mission to meet the collective need.
Outside of family of course there are three key groups essential to the business – customers, employees, and suppliers. The effective stewardship and management of these three groups constitutes the most important factor next to cash flow in terms of protection and resumption of the business. A key question to address is what strategies and standards are in place to ensure the relationships and readiness of all three for timely and effective business resumption.
There is a real benefit to combining both strategic and operational planning and actions, where the big picture options of putting things on hold, adapting, innovation and opportunity for change, are considered alongside the frontline management of finance, communication and practices.
Emotions play a big part in family business but it's important to appreciate that while these can impact negatively, they can also drive positively. Understanding these and making them serve a need and mission is important. Emotions and emotional assets are best measured alongside the key needs of planning, protection, and provision.
In practical terms therefore, what key points should be considered, and what steps can be taken to support these priorities?
Not in any way to diminish the terrible human cost, the personal and economic impact of the current pandemic from lockdown and isolation is profound. We recognise the concerns of business clients that many businesses cannot be fully switched off or easily turned back on. They vary considerably in their capacity to adapt and so need both vision and strategy for timely and effective recovery and growth.
In response to client needs during this time we are currently engaged in short projects to support family business in both crisis management and business resumption planning.
To keep a focus on this, a 6-point approach can be taken:
1 Strategy review for short, medium and longer-term.
2 Managing different situations from prospering through adapting or indeed re-structuring.
3 Managing critical resources and customer relations, employee relations and supplier relations, and terms and conditions.
4 Management planning to support a business-critical mission.
5 Focused direction and management strategies and structures.
6 Implementing priorities and planning protection and provision, when necessary signposting in any or all of legal, accounting, banking, and management.
Joining up with clients online, we are focusing on identifying critical needs and setting standards and processes while working on implementation in terms of direction and management planning and reporting.