In a crisis, where do you start – the family, the business or the Board? As a successor to a family-in-business, you have a unique and important opportunity to test your ability to lead; the future is not what it was and the present is decidedly uncertain. As a family member, the questions presented by the crisis are compounded by the shorter time horizon (the need to ‘get things done’) and the inevitable demand to address these simultaneously as owner, family member and (possibly) as manager.
The financial crisis of 2008 and the turnaround and sale of a loss-making part of our family business taught me the value of being able to compartmentalise and address the strained relationships and issues that such change inevitably generates. The trio of immediate actions necessary to stem risk to the business, to manage the mounting concern within your family and provide visible example within the company are a test for you as family and business leader. As I addressed similar challenges, I found the use of concentric ‘circles’ particularly helpful to firstly identify and allocate relevant issues, secondly to define and prioritise action and finally to guide and shape my behaviour.
Circle of Authority.
Begin with those areas for which you are immediately responsible, your ‘circle of authority’. As a manager this will now also include those elements which are ‘crisis driven’ and demanding of your immediate attention. Indeed the very survival of your business will depend on your ability to cut through to what matters now. Seek out the ‘experts’ within your company. They will have experienced crisis situations before and may have the insight and wisdom to suggest plausible solutions to some of the issues you face right now. Finally, seek quick and clear feedback; you need to know that your efforts are achieving the intended results. If feedback is not forthcoming, just ask.
Circle of Concern.
Your family members will be anxious. The ubiquitous news and conjecture associated with the crisis, will undoubtedly ‘compress’ their levels of concern. This may give rise to mis-communication or at worse, open disagreement. Your family is within ‘your circle of concern’; clear communication and a demonstration of your commitment are key. Seek to increase the frequency of engagement with family members, if only for a short periods (and at a prescribed distance). Be aware of the language you use and of the information you impart particularly if you are in a position to have qualified information on the current performance of the family business and the quantifiable risks. Individuals will probe. Secondly, demonstrate your ‘passion’ and energy for the business; if not directly involved take care to support those actively managing through the crisis. Employees need to actively sense that the family are united behind the continuity of the company.
Circle of Influence.
Finally, as a family member you will be perceived as an ‘owner’, regardless of your position or shareholding. Your ‘circle of Influence’ has never been so important as at the current time. As a Director you are in a position to demonstrate empathy and support for those (either more ‘senior’ family members or non-family managers) who are grappling with the stream of challenges thrown up by the pandemic. Discuss your concerns and ideas, feedback constructive support from shareholders and be a ‘nudge’ towards effective action. Your family – and other – leaders have not seen anything like this before. If you are a family manager facing reality on the ground, find the time to engage with those responsible for directing and allocating resources. Demonstrate your interest while being an exemplar for the family values. At the current time this is your most important role as ‘influencer’.
The current situation and the stages ahead are unprecedented in their reach and potential impact. These circumstances provide a unique leadership test for you as successor to a family in business. Once the ‘crisis’ has passed, attention will move to business turnaround and from thence to the longer-term implications for the business and possibly for the family as owners. As you move through each phase, the priorities within the business, the family and the ownership will change. The ‘concentric circles’ framework will help you identify and prioritise actions and behaviours as you consider each phase and your role within it. If you have a coach or mentor, you may find it helpful to use the framework as a guide to your discussions. As you persevere though the crisis and work to lead your business out the other side, remember a crisis is an adventure we can accept. As successors the place to start with is ourselves. Good luck.
Know your role.
- What does the crisis demand of you right now as uninvolved family member, career manager, family governor or business governor?
- Who has previous ‘crisis’ experience? What do they recommend?
Know how to influence.
- Am I engaging constructively with the senior generation?.
- Am I living the values as a manager/Director or as a family member in my dealings with those external to the family and business?
Be passionate about what you do.
- Am I demonstrating energy and commitment to the family? To the business?