This week, La República, one of the most important economic and financial newspapers in Colombia, published the latest article by ATREVIA president, Núria Vilanova, titled The pandemic is said to be provoking disruptive processes across the board. Family businesses are no exception to this disturbance–quite the contrary. In them, social and economic changes converge, generating a new environment in which they must adopt new strategies.
“At the same time, families with business are also transforming internally: new concerns, attitudes, and expectations are shaping the future.
Both circumstances place family businesses in a new era. In a recent article, Sara Hamilton, founder and CEO of Family Office Exchange, summarized in five key points the challenges that family businesses must address in order to function in the post-covid world, which I fully agree with and summarize below.
- Social and demographic changes. There is no longer a single-family model. It is now a more open, diverse, and plural concept. In addition, older generations are living longer and staying more involved, delaying leadership transitions.
- Challenges for governance. The increasing complexity and uncertainty in the world require increased attention to governance, right at a time when life expectancy is increasing and families are growing. Involvement, commitment, communication, trust, and cohesion amongst generations are key to making the right decisions.
- Revisions of the values and vision of the company. Sharing the same business concept makes it easier for the family to remain united and strengthens the commitment of all its members. Achieving this requires time to reflect together, to build a common project for the future, and make it a reality through a collective effort.
- Changes in principles and values. The emerging generation has its own values and wants family’s priorities to adapt to these causes relevant to young people, such as the environment, gender equality, or the fight against poverty. Moreover, experience shows that a positive social impact can improve results and market position. As I recently stated, if in the past the most important thing was doing business well, currently, the goal is to do good by doing business.
- Review of the purpose and impact of family businesses. Families are increasingly paying more attention to the impact their businesses have regarding social transformation, and some even accept responsibility that they themselves should be a force for change. In addition, younger members are pushing to examine the purpose of the family business.
These five points outline a complicated situation. That is, if change management is always complex, in family businesses it is even more so. However, in this case, evolving is not an option, but rather an obligation, since their survival is at stake. But let’s be positive. The answer to this challenge, in most cases, lies within the families themselves. It lies within the new generation, in their talent, creativity, and knowledge of digital technology. They are the ones who best understand today’s world, and above all, tomorrow’s world.
In any case, it is imperative to adapt decision-making and asset management to the new social demands and, at the same time, gain competitiveness. This precisely will be the topic of debate at the IV Congress of the Business Council Alliance for Ibero-America (CEAPI, for its acronym in Spanish) for leaders of companies and business families, held on May 17th and 18th, under the inspiring slogan, ‘Transformation and Social Impact: the best companies for the planet.”
