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During times of crisis, a family-owned business, perhaps more so than any other company type, can and must leverage its values of continuity and longevity; values which are inherently embedded in the rich heritage and structure of any family-business. In its core, a family business rests on a rich heritage which was originally designed and destined for long-term success and succession. In times of adversity, those who can draw inspiration from the phenomenon of \u201ctime dilation” (borrowed from Albert Einstein’s theory of relativity),\u00a0will be able to realise and maximise the business\u2019 potential by understanding how to think, evaluate and reproduce the concept of time expansion and implementing it for future generations.<\/p>\n
As a family-business consultant and advisor, I am constantly keeping in touch with my international network of clients. Just before the outbreak of the Corona virus, one of my clients, the founder and CEO of a global large-scale family business, completed the acquisition of another firm. I asked him how he feels in retrospect about the acquisition and its \u201cunique\u201d timing. His answer was: “I feel great!”. The thought that he could have bought the same company a few days later, during or after the Corona outbreak, at a cheaper price, did not seem to undermine his moral or impact his worldview strategy. In his words: \u201cTimes like these show us that we are not here to sell companies. We are here to produce a systemic business model that will continue performing for generations to come, and this is exactly what guides our business strategy and operations. Our working assumption is that if the economic and social challenges will not be resolved in our generation, they will be resolved sometime in the next generation. Whatever happens, we are here to work hard for the sake of our company\u2019s continuity, synergy\u00a0and sustainability over time and for the benefit of our future generations to come. ”<\/p>\n
Recognising the importance of running a family business from a perspective of systemicity and continuity, provides a key competitive advantage. Such a strategy not only translates into manifested growth, but also serves as a means for both coping with crises and turning them into family-business opportunities.<\/p>\n
“There is no reason to panic,” another family-business founder told me earlier this week, “the work we put into our company doesn\u2019t come to fruition within months or years, but within decades and centuries. In Israel, we do not have a long-term history of family-run businesses that have been operating for hundreds and hundreds of years. However, that is precisely why, in times of crisis, we find it is a great opportunity for our company to deepen its business outlook and long-term strategic view as a way to further expand our horizons. It is times like these that make our strength and essence. ”<\/p>\n
Back in 2018, Jeff Bezos, Founder and Chief Executive Officer of Amazon.com, launched one of the most prestigious projects in history, building a 500 feet tall mechanical clock in the heart of one of the most secluded mountains in West Texas.\u00a0The watch has been designed to work for a time period of \u201conly\u201d 10,000 years. According to Bezos, the display and its huge dimensions were meant to symbolize and encourage the nurturing of long-term thinking, a value which he claims is gradually being extinct from this world. In order to position the iconic value of the clock in a tangible way, Bezos invested in this project over $42 million. An interesting and confident long-term approach, isn\u2019t it?<\/p>\n
However, sometimes the long-term systemic thinking of the founding generation, is not necessarily transferred, assimilated or well-accepted by the future generations. When that happens, leadership training is required to change the basic thinking and behavior of the new generation which often believes in a fast-paced \u201cright here right now\u201d approach. In addition, the creation of a cross-generational discourse and ongoing debates are greatly encouraged, to discuss such objections and bridge between the generational gaps and difference in perspectives. A successful family-business succession takes place once the future generation is able to lead and put in place long-term infrastructures that create robust business resilience and results over time.<\/p>\n
In 2015, Bill Gates, Co-Founder of Microsoft, predicted that a new strain of COVID-19-like pandemic could spread rapidly and take over the world. He warned that if there was no global change in resource allocation, the world would face a serious never seen before calamity. But back in 2015, the apocalyptic horizon seemed distant and far away, mainly because much longer-term thinking was required and as a we understand now, avoided.<\/p>\n
Up to this point in time, have we been electing world leaders with a responsibility to lead us in the spirit of the \u201ctime dilation” concept? On the contrary. There is no doubt that overall as a society, we have all encouraged in one way or another the legitimisation of short-term vision, preferring to deal with certainty, and putting the pursuit of immediate personal gratification above all other things. Such preferences come at a cost, and the consequences are now much clearer to us all.<\/p>\n
That is why, in times of crisis, a family business should find comfort and reassurance, by opting for a long-term strategic approach vs. favouring an immediate short-term opportunistic mindset. By doing so, the business will strengthen its key competences, and will be able to look into the future and understand what actions and decisions are required to be taken now, actions that will best serve the company in hindsight and prepare it to come out of tough times as a solid, strong and successful unified business. Such an approach can serve as a guiding benchmark and as a result, demonstrate how long-term systemic thinking helps strive in the family-business arena in spite of challenging situations of uncertainty, situations that are unlike anything previously known or seen before.<\/p>\n
Choosing to operate your family business with such an approach requires taking ownership and responsibility while leading with an approach of perseverance. Once the strategic motivation for continuity is deeply rooted and established across the firm as a core part of your company\u2019s DNA, it will successfully \u201cvaccinate\u201d its future generations from \u201cthe invisible virus\u201d, the one that blurs long-term strategic vision, and impedes the ability to lead systemic operations amid times of crisis, change and uncertainty.<\/p>\n
It is never too late to start taking action now. Right here, right now.<\/p>\n