A huge majority of family businesses worldwide were badly hit by the pandemic, I told participants at a webinar hosted by the Bank of the Philippine Islands Asset Management and Trust Corp. (BPI-AMTC) last Aug. 5, the first in a series called “Reshaping Our Future: Inspirations for the Post-Pandemic World.”
The Banyan Global consulting group surveyed family businesses early on in the pandemic, and as of May this year, they already received almost 200 responses (including some from the Philippines) across 25 industries in six continents.
Ninety percent said the pandemic negatively impacted their business. 5 percent saw positive impact, the rest saw no change. Except for a fortunate few whose products and services are essential in this pandemic (delivery apps, computer hardware and software, medicines, and so on), family businesses suffered (and continue to suffer) significantly.
Cash preservation remained the goal of most businesses, so they cut operating expenses, dividends, capital investment. One respondent said, “Cash is king. Prepare for the worst, and hope for the best.” Some respondents invested new equity into their enterprise, while others acquired distressed businesses.
But what was interesting was how the pandemic affected family relationships, I said in the webinar. According to Banyan Global, 32 percent reported a negative impact due to the pandemic, but 25 percent said there was definite improvement in how family treated one another. The rest saw no change.
Troubled family relationships cannot be blamed on the pandemic, for the quarantine only emphasized what was already existing to begin with. Siblings who were never close got on each other’s nerves and inflamed past squabbles. Fathers already in conflict with their sons accused them of lacking motivation and wasting funds, while the latter blamed the former’s reluctance to innovate and adapt to change.
But one in four business families became more united and drew closer to each other during this crisis, I told BPI-AMTC clients. This is good news indeed.
“We have productive and heartfelt exchanges on how COVID-19 impacted the business and all of us individually,” one said.
“We are spending more time together as a family and doing things we would not normally have the time to do,” said another.
In “Reconnect and rediscover” (April 23) and “Do not kill time” (April 16), I wrote about how some business families have grown even stronger in this pandemic.
“The new normal is no longer new, considering we have passed the half year mark since the pandemic began,” Catherine Tiu-Tan says. She and her siblings are the second-generation running Akari Lighting and Technology Corp.
“In our organization, and in our family, we got used to being separate-but-together, and it begins to feel normal. Many of us work at home most of the time. After months of navigating this, we find ways to keep our relationships strong through regular Zoom meetings and constant conversations. Even my 80-plus-year-old parents join in Zoom so we can at least see each other.
“By doing these, we avoid a sense of loneliness, the loss of connection or trust when we are not [physically] next to a person. This pandemic [has] changed [our] relationships. But it can also inspire us to establish new ones that we never had before.”
Reflect on your legacy, I told the participants. This crisis reveals our deepest values.
In April, Harvard Business Review ran “A Crisis Playbook for Family Businesses,” which included these questions: “What values will guide you during this crisis? … Are there objectives for which you are willing to lose money [such as retain employees]?”
Most businesses in the survey are helping communities and employees.
“Owner pay is zero until all employees are made whole,” said one. “We have more engaged employees now,” said another, “because we are taking care of them.”
Queena N. Lee-Chua is with the board of directors of Ateneo’s Family Business Center. Get her book “All in the Family Business” at www.lazada.com.ph. Contact the author at blessbook.chua@gmail.com.