Which Direction For Family Businesses?
21st April 2020
As I write many businesses have just hit a brick wall with the Coronavirus lockdown. Whilst the authorities wrestle with balancing the need to contain the virus, the economy, and the number of hospital beds, most family businesses and leaders are faced with no certainty at all as to how hard they are hit and what the implications will be for recovery.
What we do know is that many business models will struggle, and balance sheets will invariably come under pressure, some to the point where sadly even survival becomes a real question mark. In particular, in a crisis the skills behind leadership change, in that decisions often need to be immediate and very simply focused.
Founder driven family companies can be commander driven, which, so long as the leaders have a full grasp of the crisis, can work well in driving fast decisions. Others, however, can operate on a family council basis to make changes equally ‘ably’, often by taking into consideration more variables.
The key in a crisis is being able to identify what your family business leadership style is, and whether this is working or needs to change to cope with uncertainty and an extremely fast-paced environment.
Once you are clear on your style, it is also important to remain be agile whilst keeping your short, medium and long-term goals in mind.
The survivors will be the agile; the winners, however, will be the agile who kept the long game in play. This comes by asking ourselves how to remain competitive despite volatility:
- Who are your future customers and what new products will they need?
- What are your best kept secrets that will create competitive advantage?
- How can you use technology to positively disrupt and drive efficiencies?
- How can you create a better brand and customer pull not push?
Many family boards are too ‘hands on’ (running the business) and in a crisis this ‘hands on’ pressure can increase. However, the ‘hands-off’ work (designing the business and its future) is just as important. Which moves can you make that will help you both deal with the crisis but design the business around the future?
In this process, families do have a competitive advantage. Families by nature tend to communicate well and their value systems are embedded so they have strong platforms in volatility. So yes, families have an advantage in a crisis, usually, they pull together. The question today, against such a dramatic backdrop of business pressure, is in which direction should they pull?
Kevin is Avondale’s Founder and Chairman. A published author and widely sought-after public speaker, he is recognised internationally as a leading authority on mergers and acquisitions and business transformation strategy.
Starting out as a banking and financial services professional, Kevin soon realised he wanted the freedom to help business owners on his own terms and went on to establish Avondale nearly 25 years ago. Kevin has overseen the sale and purchase of more than 400 companies, drawing on his unique experience and skill set to help clients achieve exceptional outcomes to meet their business needs.
Avondale’s clients value Kevin’s dynamism, his creative, knowledge-driven approach and his ability to simplify complexities around the mergers and acquisitions process. Kevin is currently authoring a series of M&A Guides, covering all aspects of the process. These guides are available at Avondale.co.uk/guides.
As an experienced mentor to business owners and directors, he relishes the collaborative nature of his work, which sees him delivering balanced, objective-focused guidance to help companies deliver their goals.
Kevin was named “UK Game Changer of the Year” by ACQ Magazine in 2015, 2016 and 2017.
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