Family businesses are believed to be a little more agile than their counterparts. Big business often restricts movement with measures and countermeasures, checks and balances. Logically meant to facilitate solid company-wide decision making, those requirements can also produce sluggishness. That is not to say that smaller, family run businesses have it easy. Family dynamics and the hierarchy of generations can produce some fireworks, as can the push and pull between traditional and progressive approaches. Yet family is known – and expected to – pull together during times of difficulty.
“We had to look at incomplete information about what was going to happen with the pandemic and make decisions quickly,” said Shady Elhami, a Montreal entrepreneur who helps run a family business. Shady Elhami added, “It was a challenging time, and I’m grateful my family was there to help navigate our businesses through one of the most challenging times in modern history.”
The data shows that Canadian family business owners are making their mark:
“Drawing on the latest data from Statistics Canada, family-owned enterprises account for 63.1 per cent of all private sector firms in the Canadian economy and generated 48.9 percent of Canada's real GDP in the private sector, at $574.6 billion. ... Nearly two-thirds of all private sector firms in Canada are family owned,” according to the Conference Board of Canada.
How did these businesses weather the impacts of a shocking global pandemic?
Successful Transgenerational Entrepreneurship Practices (STEP) Project Global Consortium and KPMG Private Enterprise went to work to find answers and have generated the “Global family business survey: COVID-19 edition and report.”
They collected data and then received input from business leaders, academics and family business advisers.
“The experiences and insights from family businesses in the Americas, Asia, Europe and the Middle East & Africa have revealed a roadmap, not only for mastering a comeback in their businesses, but for leading a global economic recovery,” according to the report.
Eighty-seven percent of respondents are led by family CEOs who took financial and non-financial actions to stabilize their businesses during the onset of the pandemic while also preparing for the companies’ longer-term growth prospects.
“For some, this led to a complete transformation of their business operating models and the launch of new product offerings, often with the intent of making the business fit for purpose in a rapidly accelerating digital age,” according to the report.
Family businesses confronted generational feelings about the acceptance of new technology, for example, with greater cross-generational involvement with the businesses, many family members began to take greater notice and find greater appreciation in the skillset of other generations. Some family members came out of retirement to facilitate the survival of companies as they navigated the unknown.
“Younger generations are becoming more involved as well. Because of their knowledge and exposure to many new technologies, they are being relied upon to identify digital solutions to transform the family’s business operations and help to develop new technology products and service offerings that will pivot their business, potentially taking them into entirely new markets,” per the report.
Challenges are faced with business strategies at any level: from small businesses to huge corporations. Family owned businesses used three different approaches to navigating the unknown.
Many turned to social responsibility and aimed to help their communities through the crisis.
The second strategy is business transformation: pivoting and creating a “transgenerational entrepreneurial mindset.”
“It includes reactive actions such as streamlining operations and implementing new financial measures, proactive pivots for creating new products, exploring untapped markets and adopting new technology solutions to transform the business,” according to the report.
The third approach is having patience – ”to take their time to fully assess the impact on their business and the actions of others in their industry before making decisions that might have far-reaching, longer-term consequences.”
The report concludes that family owned businesses have proven highly resilient thanks to their adaptability.
“More than that, they are showing family and non-family businesses alike how to leverage all of their assets – financial and non-financial – to lead their companies into the future and not look back,” per the report.
Shady Elhami said that he and his family learned a lot about each other and everyone’s unique contributions to the company this past year. The challenge strengthened the foundation of the business as a whole.
Published by Irfan Haider