Covid-19 crisis : A golden opportunity for family businesses

I have been asked by business families to help out answer the question, what can business families do at a time like this when there is social distancing and self-isolation and most business families find themselves completely locked in with their families. We answered the question from a business aspect earlier, now let us turn to the family aspect:

Family roles, present and future:

It is important to use this time to consider the roles that the family members would play in the future. Given the suddenness of the impact of the current crisis, this would probably have served as a very good testing ground to evaluate the abilities of all the family members and top management personnel. Their ability to respond to the crisis, and whether they could provide the leadership needed. I have seen families where the leadership has just frozen whereas there have been leaders emerging in the lower ranks of the organisations.

I have seen in a multi-location, mid-sized business where the top management in a meeting was clueless, and had to invite a mid-tier manager to handle a supply chain issue. Similarly, in another service organisation, another junior employee in IT department, managed the IT network and got the entire top management online. (Most of the top management in this organisation were IT challenged, to a large extent.) In another case, an factory maintenance employee self-quarantined himself at the factory, protecting the factory during the lockdown, along with the security personnel during the lockdown, since the continuous manufacturing process had to be shut down over a period of time, for safety reasons.

In all such cases, it is important for organisations to understand the strengths and capabilities of people in the organisation. It is important to identify the gaps and build up those gaps. It is equally important to recognise and rewarding all such superlative efforts within organisations, so that this encourages future performance, and motivates the others to perform beyond the call of duty.

This also shows potential leadership amongst the lower ranks. Alternately, business leaders should also use the opportunity to examine the role played by all the top management personnel. A question, “Am I confident to have these people with me to tackle the next crisis?” Or “Whom would I absolutely need to have on my side, should something like this occur in the future?”, is a good question to ask, to narrow the choices down. And then act accordingly. The last thing an organisation needs is someone who is slowing the others down or preventing any actions being taken. In case one still has doubts, another question which helps get clarity is, “How comfortable would I feel, if this person was working with my competitor during a crisis like this?”. The role of the leaders in identifying and encouraging talent is important and this crisis provides a golden opportunity for doing that.

Pending issues: There are always issues which had been swept under the carpet earlier, due to lack of time or inclination or perhaps both. This is a good time to revisit those and clear them up. This could include unmentionables, or topics which were too sensitive to be addressed. The family could venture to address these. I know a family which has chosen to do so, (with my intervention on a video call) and has chosen to address some long pending issues. This is a tough choice, given the fact that no one can walk away from the meeting, since they all live in the same house, but slow progress has been made.

Wills: This also a good time for planning for the future of all the family members. The Covid-19 virus has forced some family members to address their mortality, front and center, either out of fear of an unknown unseen virus, or for some other reasons. Whatever the reason, family members are increasingly choosing to write their wills and plan for the future. This was earlier a topic which was taboo, but I am seeing increasingly, family elders become more cognizant of the need to do so. Maybe the fact that the virus had mortally affected the senior citizens for various reasons in Italy, had something to do with this. Which may have played a role in their own realisation for having to do something on this issue.

Future planning: While on the subject, the family could also do well to figure out the succession plan, should anyone be affected by the virus. This is an emotional subject, not addressed due to respect for the elders, but at the same time, a very critical subject to be left unaddressed. The Covid-19 virus has shown that anyone can be affected and it could be sometime before the symptoms manifest, so everyone is at risk, regardless of age or position. The fact that some of the best known politicians, actors and even royalty were affected, just proved the fact that no one was immune from this. This could be used as a basis to plan the family business, in a logical and not an emotional manner, as to how the business should be run, should anyone in the top management team was available to run the family business. It is only by addressing such tough questions, can families plan for their survival. This is not a time to be shy but a time to be realistic. This is even more critical if the family’s livelihoods and expenses are derived from businesses. The question that needs to be asked is,” how do we ensure that the family’s living, educational and medical needs are maintained, should something happen to member X?”. This needs to be secured.

Strategy for all the family members: The current crisis would have, as discussed earlier here, thrown up a fantastic opportunity to evaluate the role of the various family members, and hopefully their strengths and weaknesses. I worked with a patriarch heading a large-sized family business, to re-work the roles of the various family members, based on how they were handling their roles during this crisis. We also evaluated each one’s responsibilities and also worked with each member to reassign different areas, based on their strengths. While this drew a mixed response, it did help make the business stronger, with more competent leaders heading the various functions.

The extreme nature of the working from home situation has made a lot of families closer. I know elders, living separately, saying that they have had got daily calls from their kids who otherwise were too busy in their daily lives. (The occasional online trading on the stock market does provide some distraction.) On the other hand, families are also getting united in their efforts as they band together to handle this crisis, something which no one is quite sure of how to handle. Sure, there will be fallouts, but on the whole, stronger families and stronger businesses will emerge even more stronger, while the weaker families and businesses will disintegrate. And that is where the real opportunity lies.

Rahm Emanuel, advisor to President Obama and later mayor of Chicago, had said,” “Never let a crisis go waste”. In our context, I would urge business families to use the opportunity to review, and assess their business and family relationships. This is an golden opportunity and family businesses would do well to profit from it.

What really matters…

At the end of the day, families will have to address the question “What really matters?”. They have been forced to live together for almost a month, surviving on their own, having to work out things by themselves. And in some cases, without any domestic help. There are a few others who have shifted to their second homes with the help and isolated themselves there. But regardless. They have been forced to look at their family members, hopefully free from the screen distractions. Some families have become closer to their family members and the younger generation, some maybe not so. This is a time, where one has realised whom you value the most, or love the most, or who brings meaning to your life. I think that all business families should really use this time to ask themselves, “What am I doing?” what or whom am I doing it for? and more importantly, “What really matters?”.

The answers may scare you, but they will lay down the future steps that one has to take. We have faced an existential threat like the Covid-19 virus. And survived to tell the tale. Now we need to address the supposedly minor issues, like, How do we make our lives, families and businesses more sustainable and meaningful? What really matters? What does not? And what are we continuing to do? Why?

We have had a second chance to rebuild, our family relationships and our businesses. We have had a long time to think about this. We cannot afford to waste any more time. What are you waiting for? Let us begin. The whole world of opportunity is waiting.

Views are personal.

The author is professor - strategy and family business at Bharatiya Vidya Bhavan's SPJIMR.