We were delighted to host a webinar on 13 May, 2020 with Simon Cotton, CEO of Johnstons of Elgin and Sandy Manson Chair of Johnston Carmichael. Honest and thoughtful discussions provided an opportunity to explore the various ways in which leaders could look beyond the immediate crisis, and work to future proofing their business. We hope that you will enjoy the following summary from our discussion:
Future proofing beyond the crisis
Family businesses are renowned for their durability and ability to take the long term view, however rarely have they been so tested as during the coronavirus pandemic. While the fortunes of companies will vary markedly sector by sector, we have drawn a few key themes for family businesses to consider and reflect on as they navigate the crisis:
Stay true to your values
Family businesses are often known for their commitment to community values and long-term view: this is a real strength in the current climate. Globally, businesses of all sizes are struggling and facing their own challenges, and while cutting corners to cut costs may help survival in the shorter term, remembering their core ethos and values will allow companies to weather the storm and come out on top in the longer term. Consumers and corporate stakeholders are watching leaders’ behaviours carefully: those who have decided to abandon their values may find themselves in trouble, and those who stay true to their founding principles should reap the rewards.
Many family businesses (like most other businesses) had to act extremely rapidly in response to the UK lockdown announced in March, but there will be bigger, and longer term challenges, to come over the next 18 months. Now is the time to move decisively but carefully, with a strong focus on planning, anticipating fundamental market changes, and listening to employees. Family businesses are known for their history and durability, and we sense a real optimism that this period, for all its uncertainty and disruption, could lead to more efficient and resilient businesses. New and previously inconceivable ways of working have become the standard, and these new norms can lead to cost saving and freeing up more time to focus on key business decisions.
Communication has never been more important
Just as it is important to stay close to clients and consumers through these testing times, so it is key to be open and in regular touch with employees through a number of channels, formal and informal. Getting the message right, particularly with staff on furlough, is vital and complex: there is a fine line between providing reassurance and transparency, while acknowledging that no-one has all the answers, and that there are for many organisations some tough decisions on the horizon. Technology has facilitated more collaborative, improved and frequent communication across businesses than ever before, and many businesses are keen to ensure that this continues.
The relationship between the executive and the board is as important as that between the organisation and its employees. At what is a rapidly changing but deeply emotional time, many family-owned businesses are finding the boundaries between executive teams and family members are more blurred than ever before. The role of sounding board and support for the executive from the non-executives is crucial: CEOs feeling the full backing of family is always important, but never more so than now.
This is a time for sharing
External corporate relationships have become increasingly vital in a world without traditional consumer spending, and where boundaries between sectors have become more porous. We were struck and touched by the profound sense of openness and willingness to collaborate among family business leaders: whether sharing best practice, networks, words of wisdom or simply of support.