The Successful Transgenerational Entrepreneurship Practices (STEP) Project Global Consortium, European Family Businesses (EFB) and KPMG Private Enterprise came together to discover how family businesses around the world were responding to the impact of COVID-19. What actions have they taken to stabilize their businesses in the short term? What strategies have they adopted to sustain their success for generations to come?
To answer these questions, the first step was to collect data in a family business survey, which was conducted by the STEP Project Global Consortium between June and October of 2020. In total, 2,493 family businesses and 510 non-family businesses (for comparison purposes) across the globe responded to the survey. The global view was presented in a report entitled “Mastering a comeback: How family businesses are triumphing over COVID-19”, and provided a detailed picture of the impact of a global crisis on family businesses around the world and how they have responded.
In Europe alone, a total of 1,332 family business leaders (and 215 non-family) from 23 European countries responded to the survey. European family businesses made important contributions to the analysis of the global results and this special report takes a closer look at the experiences and successes of these family businesses, how they have navigated through the pandemic and compares their actions and outlooks for the future with business families in other major regions.
The first commercial shock of the pandemic was felt on companies’ revenues worldwide. As many as 64 percent of European family businesses reported a decline in their revenues, though they fared better than the global average of 69 percent. Eleven percent of European family businesses actually experienced a boost in their revenues.
Sixty-four percent of European family businesses reported revenue declines, however, 11 percent experienced a revenue boost.
European family businesses responded immediately, in three characteristic ways, to address both the short- and long-term impacts of COVID-19 on their companies: taking actions to stabilize their businesses, accessing government support and taking a long-term view to reimagine the future for their companies.
While there was a higher percentage of employee-related actions taken by European family businesses, the overall 4.1 percent reduction in the workforce in European countries was significantly lower than the 8.56 percent reduction in the workforce reported globally.
Through the survey and the direct input of family business leaders, we have reconfirmed the view that European family businesses are, indeed, uniquely resilient and adaptable. They have successfully navigated through generations of economic, health and political crises long before the onset of COVID-19. They have applied these historical experiences to mitigate the disruption to their businesses, while also looking ahead at prospects for the future.
We have also confirmed our belief that a unique source of power behind family businesses is the involvement of the family itself, with multiple generations contributing to decision-making and strategy development.
Our conclusion is that there are two essential sources of power and endurance behind family businesses: the ability to take the long view and the foresight to tap into the diverse skills, knowledge and insights that are embedded in multi-generational families.
The survey findings, followed by roundtable discussions with family business leaders, has revealed an important insight: family businesses in Europe have not only stabilized their businesses successfully, they also are making important contributions to help restart Europe’s economic engine.
Their practical insights provide a roadmap, not only for family businesses, but for businesses of all types and sizes across Europe.
As you consider the strengths and opportunities ahead for your family business, we encourage you to consider how the power of these key ingredients contributes to your success. We hope the insights from the report will help you to consider these and many other important questions in continuing to fulfill your family’s purpose and values and in answering the call to help restart the economic engine in your country.