Family businesses have identified three core strategies to respond to the impact that COVID-19 has had on their businesses and their family legacies.
Several family businesses adopted more than one strategy in response to the pandemic. This was often the case when the impact on their business stabilized and families began to assess the long-term prospects for their businesses.
The focus is outside the family business and emphasizes the business family’s commitment to the welfare of society as a whole, and the needs of all their stakeholders including employees, customers, suppliers and local communities. It reflects the family’s values and the governance practices that are in place to support their societal and environmental responsibilities and maintain their reputation as responsible owners.
The concept of pivoting and the importance of encouraging a transgenerational entrepreneurship mindset is the focus of this strategy to pass the business successfully from generation to generation. 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.
With this strategy, some family businesses have not taken immediate action to address the impact of COVID-19. The capital invested in the family business is “patient capital”, and they are prepared 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.
Many family businesses employed different strategies as the duration of the pandemic progressed. We found, however, that some strategies have been preferred more than others in different parts of the world.