In the face of the pandemic - strategies for family businesses.

(Reading time: 2 - 4 minutes)

Wertvolles aus dem Netzwerk2Professor Tom Rüsen of the Witten Institute for Family Research (WiFU) examines how successful entrepreneurial families have reacted to crisis situations in the past His analysis provides assistance in dealing with current challenges

Family businesses are characterized by the close connection between ownership and management of the company. This enables them to define and implement measures for dealing with the crisis situation very quickly. Defensive measures are aimed at limiting the damage. Offensive measures use the crisis in a targeted manner to further develop the organisation or the business model.

Limiting damage

// 01 To avoid infection, "cell division of the organization" takes place. This involves dividing organisational units into A, B and C teams that have no contact with each other. In the productive area, these teams operate in separate shifts - in some cases, reserve teams are even kept available for use in a team's quarantine situation. In the administrative area, individual teams are defined, each of which takes turns going to the home office for 14 days in a kind of preventive quarantine.

// 02. The establishment of crisis teams enables a rapid response to changes in the situation. This involves systematic communication with individual management circles (subsidiaries, locations), timely information about decisions made and organizational changes, as well as a defined information chain to provide feedback when infections in an employee's environment become known.

// 03. widespread digitization of communication via video conference systems and smartphones creates security risks, but helps to facilitate the exchange of information with customers, suppliers or other business units - despite a maximum travel and meeting stop.

// 04. flexibilisation of core working hours (for example from 06.00 to 22.00 hours) enables employees who no longer have childcare to fulfil their performance contribution. Time account models with up to 200 overtime or minus hours help to react to the respective workload situation on site. Due to the historically grown, close relationship with the owner family, employee representatives are often integrated into the design and planning process from the very beginning.

// 05 The personal approach of central stakeholders of the company and in particular the employees by the representatives of the owner family helps to reduce irritation and fear. It creates trust and cohesion as we walk together into an uncertain future.

// 06 Purchasing blocks, reductions in further training and consulting projects, pooling of organisation-wide services or product creation and the use of short-time work protect valuable liquidity.

// 07 Maximum liquidity protection through rigid cash management, which is declared a matter for the boss Close coordination with financing partners and "Covid-19 measure tracking".

Exploiting opportunities

A large number of the currently observable activities of family businesses include measures aimed at exploiting new opportunities.

// 01 The systematic further development of the product and service range to eliminate current bottlenecks is the starting point for adjusting the strategic orientation of the entire company.

// 02. A targeted development of new cooperations takes place, in which employee, logistics or sales platforms are shared and made available to each other. An alliance forged in necessity often creates a basis for fruitful growth and development opportunities in the future.

// 03. The current "digitalisation shock" for the company's employees and network partners is leading to new and more efficient forms of service provision outside of a previously existing "classic" work organisation.

// 04. Free time resources of employees are used for targeted investment in further training measures.

// 05. the long-term strategic consequences of changing market and competitive conditions for the period after the crisis are systematically worked out and concrete options for action are developed.

Whether families can cope with this situation depends above all on the stability of the shareholder group. Drastic measures to secure the company's existence, such as a 100 percent retention of profits, the conversion of shareholder loans into equity capital or the contribution of fresh equity capital from the family's assets are only conceivable if the circle of owners stands united behind the company and together strive to overcome the crisis.

This requires a family strategic framework for crisis management. This framework not only ensures a uniform maxim for action, but also coordinates and organises communication within the entrepreneurial family, so that fears can be addressed and information asymmetries minimised. In the absence of (crisis) management within the entrepreneurial family, on the other hand, intra-family conflicts are programmed, especially between operationally active and non-active shareholders. ®

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