KPMG Private Enterprise and the STEP Project Global Consortium release analysis of family business responses to the COVID-19 crisis.
A new report from the STEP Project Global Consortium and KPMG Private Enterprise has demonstrated how the unique structure of family businesses has empowered them to respond to the impact of COVID-19. The study found that the involvement of the family and their long-term mindset has enabled them to demonstrate resilience in the pandemic, placing them in a key role to lead the economic recovery.
The report, titled Mastering a comeback: How family businesses are triumphing over COVID-19, includes insights from nearly 2,500 family businesses and more than 500 non-family businesses. It uncovers three core strategies used by family businesses to address the immediate impact of COVID-19:
Harish Gopinath, Partner, KPMG Enterprise at KPMG in Bahrain, commented on the report finding and said “Family businesses are the economical backbone within the global marketplace, and more so in the Kingdom of Bahrain. The pandemic has had a unique domino effect over the past year, which has impacted the financial success of all businesses including family businesses. To ensure steady growth while sustaining their existing operations during these turbulent times, family businesses need to tackle the challenges of COVID-19 to stay resilient and emerge even stronger. It is critical that family businesses also focus on other objectives, such as governance and transgenerational succession. After the initial action and strategy to cushion the business from the financial impact from COVID-19, families need to shift their attention to their longer-term strategies for sustaining the purpose and non-economic value that the family derives from owning and managing the business. Family businesses in the Kingdom are already closely integrated within the community through the products and services they provide, the jobs created, and their philanthropic initiatives. This crisis is a test of time, and we truly believe that the more mature and professionally run family businesses will not just survive the impact but thrive beyond it.”
The study reveals the pivotal role that multiple generations of the family have played in their response to COVID-19. When two or more generations of the family are involved in the business, next-generation family members have helped to advance two critical agendas: their firms’ rapid digital advancement and putting ESG in the strategy spotlight. This meant that 70 percent of families reported that they maintained their R&D investments and continued to launch new products and services throughout the pandemic.
Jonathan Lavender, Global Head, KPMG Private Enterprise, “The pandemic opened up opportunities for young, tech-savvy family members to take on prominent roles in introducing digital technology solutions that streamlined their business operations and launched a host of new products into the market.
“These NextGen influencers also recognized that implementing an ambitious ESG strategy was an essential ingredient in the transformation of the family business. As a result, they have expedited the operational changes necessary for achieving their firms’ environmental and societal goals and firmly embedded ESG as a strategic business priority.”
Learn more by accessing the full report.
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