Here we are in the middle of the Latest COVID lockdown and family business owners are really hurting. For many, it has become critical to reassess their future survival and future opportunities. No one can be expected to operate successfully in business environment that is so unpredictable.
Not only do they tell me they lie awake worrying about future sales and cashflow, they are often leading a business based on personal emotions and complex interfamily egos, family turf wars and differing individual aspirations and personal ambitions. The shutdowns have now introduced a high level of personal stress and anxiety.
When the original founders started, usually as a husband and wife team, they only had themselves to consider and were often married to the business, working amazing hours. Now things are different. The family has grown and expanded and family group dynamics have come into play.
Following on from 2020, which we can only describe as the COVID year from hell, family business owners are faced with some key decisions they have never faced before. Business models need to change, supply chains have changed, consumer buying habits and attitudes have changed, the way we work has changed and technology is driving this at an incredibly fast pace.
In my work with family business owners, there are three fundamental questions. Especially since credible research from a large national accounting group and Family Business Australia indicates that only twelve percent of family businesses survive past the second- generation.
Family leaders must decide. Do we just continue as we always have done in the past? Do we look to find a buyer and exit the business? Do we, or can we, transfer and transition the business to the next generation and accept that change is necessary?
Recently, I have been involved with families in regional construction, hospitality, artisan food and local engineering who have struggled and cannot see a light at the end of the tunnel. However, there are others in food manufacturing who have been hit hard initially and then rebounded. The latter are examples of those who stopped and reassessed their situation, have been bold in making change and are now beating their pre COVID results.
My best example is a family business in agribusiness who initially lost sales and clients in 2020 and quickly brought the senior team together and decided to make some tough people decisions, reassess their channels to market, adjust their product range, raise their gross profit margins, upgrade their technology and revise their short term and long-term business gaols.
The lesson learned for family business is those who had always ensured they communicate with each other, have maintained cash reserves and a good balance sheet prior to 2020 have been able to survive last year and now have a chance for surviving past 2021.
No one has ever achieved real success working on their own. This was a hard earned lesson for us when we operated our own family business. With a successful history of business experience and knowledge in both listed and private companies as owner and CEO, Bill Winter understands the issues business leaders face when operating in a turbulent and ever changing business environment such as we face everyday at work in uncertain times. We understand that business success is all about people and culture, a common vision, robust conversations, systems and processes and the ability to set targets and goals and and measure performance
Because family emotions and individual family member personalities get in the way of operating under standard behaviours you would expect in a successful company, the future survival rate for family business is limited.
Yes , I have had some screaming moments since March. Not at others but to myself.
i was recently asked to give an example of my best and worst experience when working with families in business. The answer to that question is all bout the leadership qualities and attributes of the family member who sits in the position of owner, chair or CEO.
If I told you the worse example you would not believe me. Those who stand out have the same common characteristics.
Commentary on the internet is overloaded with leadership content. In my experience working in and with businesses of all size, effective leadership is captured in the attached illustration. You can add to that encourage the heart, model the way and challenge the process.
Why have I had a stone replica of this turtle on my desk for the last 30 years?
It’s all about your appetite for risk & willingness to have a growth mindset.
In order to move forward a turtle must stick its head out.
Victorian business owners have to decide on difficult choices in this lock down and some are about future survival.
Some owners are in a state of anxiety and not in a good mental place and unable to see a way forward. Others see it as a time to look outside their immediate situation and develop a new way forward .
In my own situation working in isolation I go through a variety of emotions on a daily basis. Some days I am all about a state of positive psychology and on others, I am having trouble getting my brain into action and being motivated to get moving.
I know that I am not alone. That’s why I work to a structured routine, talking to others every day, informative zoom meetings only, new learning on You Tube, writing, looking to see how I can add value and walk 10 klms a day.
Be a turtle and stick you head out and look for a way to move on
This month I celebrate what I consider a milestone birthday. The one thing I have learnt from this COVID-19 shutdown is that I will always keep working. For many similar to me who have so much to give and share, the way to thrive post pandemic is to keep learning and sharing knowledge and experience.
The tipping point for me was NFP board member telling me I was too old to be on boards and she did not want older males involved. What is old? Tell that to world famous business guru Peter Drucker who was consulting past his eighties and was still relevant.
That's why my purpose in business is to work with families in business from bright young teenagers to founders who won't retire to achieve harmony between age groups.
Looking forward to a changed business world when we know what the hell that may look like.
Our regional food and fibre segments, which are mostly family owned and managed, are employing many thousands of Australians across the whole agribusiness chain.
We need to ensure the knowledge gap that exists within our major city population of the critical economic driver from farming is understood and appreciated.
Current world political events are going to place a greater emphasis on Australian owned and grown food.
The integrity of our bio security procedures should be further strengthened to ensure we set the world standard for what we produce and eat in our own country
As we come out of uncertainty in understanding how things might change the way business is conducted in the future. It become even more important to communicate with your staff. They are also uncertain about the future and the more you can clarify your business direction the more they can embrace it and support you.
Bill Winter is a renowned family business advisor and facilitator of the hard to have family succession conversations.