Regardless of their economic might, family enterprises are tapping into the power of purpose in the fight against COVID-19.
Big or small, family-run enterprises continue to prove that their DNA, with rich concentrations of resilience and ingenuity, is truly different.
As the COVID-19 pandemic continues to hammer economies, major players worldwide have wasted little time adapting their businesses – out of necessity, benevolence or both – in order to survive and help customers thrive.
When Ford Motor Co. last month announced plans to work with 3M and GE Healthcare to produce respirators, ventilators and face shields, it addressed conspicuous shortages in treatment equipment for coronavirus patients. The carmaker is expected to report a net loss of $2 billion in the first quarter as the pandemic depresses sales. What will the Ford family, its controlling albeit minority shareholder, make of that?
On the other side of the globe, Indian carmaker Mahindra and Mahindra Ltd. (M&M), owned by the eponymous family, took just 48 hours to prototype an artificial manual-breathing unit used to help patients with respiratory problems. M&M, which was founded as a steel trading company in 1945, is also prototyping ventilators at light speed.
Impact on Demand
For its part, the $108 billion Volkswagen Group, controlled by the Piech-Porsche family, has donated 200,000 face masks for public health protection. The carmaker is also 3D printing face shield components in an initiative with Airbus and 3D printing network MGA Mobility to provide relief to hard-hit Spain.
Like Ford, Volkswagen will take a knock in the first quarter. Global sales of its cars tumbled by 23% to 2 million compared with the year-earlier period, reflecting the health crisis which triggered plant closures as consumers stayed home.
Family Enterprises are Punching Above Their Weight
Given their mass-production operations and access to rapid prototyping technology, major manufacturers are well placed to make a big impact.
Yet smaller family firms are doing their bit too. Some punch above their weight. Cleveland, Ohio-based Pulsar Eco Products, has gone from a consumer products supplier to big-box retailers to turning out a weekly supply of 2.5 million protective masks for the Mayo Clinic and US Navy.
“In addition to providing essential personal protective equipment, we’ve kept our entire company employed as we continue to look for creative solutions to address the COVID-19 crisis, Pulsar founder Eric Ludwig says.
Answering the Call
Meanwhile Naturpedic, which makes mattresses from certified organic materials, has designated a portion of its factory in Chagrin Falls, Ohio to face mask production.
“Although they are not N95 particulate filtering masks, research shows they’re still beneficial in helping reduce the spread of pathogens and are designed in accordance with the CDC recommendations,” the company says.
The focus on medical gowns has also intensified, particularly in the Montreal area where shortages emerged in early April. At that time, George Courey Inc., a 110-year-old family business that normally supplies hotels and hospitals with linens, has altered its core business to manufacture personal protective equipment. It saw its stockpile of 100,000 gowns deplete virtually overnight.
Then there’s Lacerta Group Inc. of Mansfield, Massachusetts, a family-held packaging concern. In addition to donating hundreds of N95 masks used by its own factory workers, the company has repurposed a production line to make face shields for paramedics, hospitals and healthcare workers.
“It took us basically two days to design and go to production,” Lacerta partner Mostafa Lotfi told Northeastern News.
Downturns and Upturns
Key sectors such transportation, hospitality and real estate, have suffered greatly and are facing an existential crisis. Others, such as videoconferencing, online learning and streaming services are experiencing an upturn in demand.
In between, most industries are facing a slump. Families will need review strategies to handle profound changes as they arise in the coming months. One challenge will be rethinking the way they measure success.
As Robert Frances, chairman and CEO of Peak Financial Group, explains in this video, financial statements shouldn’t be the only yardsticks. “Maybe we need to start developing KPIs within our business when it comes to employees,” Frances says, adding that “key satisfaction indices” and to what extent “employees feel that they can achiever their goals” within the company are worth pursuing.
In the interim, family enterprises will do what they do best: adapt, dispense compassion, and double down for the long haul.
Has your family business decided how it will pivot and make a difference?