Why Resilient Families Will Lead the Global Reset


Actions and initiatives analysis for entrepreneurial families as they navigate the pandemic economy.

Is humanity finally on the threshold of a paradigm shift, one in which we manage our resources, care for our communities and our environment, and do business in more mindful ways?

If so, the world could do well to pull a page from the playbooks of family-owned enterprises.

The coronavirus pandemic has in many ways inflicted irreparable damage on economies. It did not have to be.

Indeed, the cost of preventing future outbreaks by protecting wildlife and forests could equate to just 2% of the estimated financial damage caused by COVID-19, according to researchers at Princeton and Duke University.

Roughly nine months into the health crisis, family enterprises are doing what they do best: steadying their ships and running their businesses with characteristic prudence, mindful of the implications of their actions beyond their own families.

Look Beyond Family

Blood is thicker than water, the saying goes. For family enterprise expert Maria Fonseca1, it is more than a truism. “[Family businesses] always share – as their greater concern – the impact on society as a whole, beyond their own families and their companies. They are worried about vulnerable groups.”

As to their foremost concerns, countless family enterprises are preoccupied with survival, a basic objective yet one currently fraught with shifts in demand as clients accelerate their adoption of digital tools or mitigate operations disruption as their workforces transition to remote working.

There are other forces shaping the future, the “next normal” as management consultant McKinsey & Company calls it, such as changes in resiliency expectations. There is an increasing desire by businesses to ensure their partners are resilient financially and within embattled supply chains.

We have also witnessed scores of large companies divesting assets in order to boost cash on hand. Moves favoring onshoring are likely to accelerate in a post-pandemic world, as a result of declining confidence in free-market mechanisms and rising statism.

That leaves entrepreneurial families with the unenviable tasks of rationalizing their businesses indefinitely amid higher-than-usual levels of uncertainty. “Families are mostly concerned about how to adapt their strategy to the present situation and better adapt their business models to what will come up as a new economy after COVID-19,” says Jesus Casado2 of European Family Businesses.

The Great Reset

What, indeed. Since its entry on to the world stage, COVID-19 has disrupted global health systems, economies and societies. A new book by Klaus Schwab, founder and executive chairman of the World Economic Forum, and Thierry Malleret, founder of the Monthly Barometer, considers the far-reaching implications of the pandemic and argues the need for a “great reset” in every domain from policy-making to business.

“We are at a crossroads,” the authors of COVID-19: The Great Reset argue. “One path will take us to a better world: more inclusive, more equitable and more respectful of Mother Nature. The other will take us to a world that resembles the one we just left behind – but worse and constantly dogged by nasty surprises. We must therefore get it right.”

Families are concerned about how to adapt to the present situation

Getting it right will mean getting innovative. There are numerous examples of family enterprises that have already pivoted to new products and services, so we are seeing more innovation. McGill University’s Robert Nason3 notes that, although survival remains a priority, family enterprises are investing in new growth areas. “The pandemic has pushed family business to lean into their entrepreneurial roots,” he says. “For those that are able to survive, the pandemic can be an opportunity to reset failing business models.”

Nason reckons successful families will become more “operationally” focused by comparing areas of their businesses that work with those that don’t with a view to aligning what functions best in the future.

Conservative Business Models

Internationally-focused enterprises may already be there. Large family-owned companies tend to have above-average defensive characteristics that allow them to perform well, particularly during periods of market stress, a new Credit Suisse analysis of more than 1,000 family-controlled businesses suggests. Despite the impact on revenue growth this year, family-owned companies surveyed by the bank view COVID-19 as slightly less of a concern to their firm’s future prospects than non-family-owned companies.

“This year, with the exceptional circumstances of a global pandemic, we delved deeper in our analysis and found the traditionally more conservative financial model of family-owned companies built on lower leverage and strong cash flow generation has proved an asset,” says Eugène Klerk, head of Global ESG Research Product. “They have notably relied less on government employment support to furlough their workforce, implicitly reflecting their own social responsibilities.”

Family-owned companies on average tend to have slightly better ESG score results than non-family-owned companies, Credit Suisse found. This overall better performance, which has strengthened over the past four years, is mostly led by better environmental and social scores as family-owned companies appear to lag their non-family-owned peers in terms of governance.

Governance may need shoring up yet entrepreneurial families can draw a measure of relief knowing they are on the right track in the great reset, whatever that turns out to be. Says Devin DiCiantis4 of Lansberg Gersick & Associates: “Identifying an effective strategic planning horizon continues to be difficult in the face of considerable uncertainty.”

That may be so, but enterprising families should take comfort in the fact that they may the best equipped to lead the world past uncertain times towards a more resilient and equitable tomorrow.

For more information on the Family Enterprise Barometer, visit our page.


  1. María Fonseca Paredes is Director of the Institute of Enterprising Families for Mexico and Latin America, Mexico
  2. Jesus Casado is Secretary-General of European Family Businesses, Belgium
  3. Robert Nason is an Associate Professor of Management at McGill University’s Desautels Faculty of Management, Canada
  4. Devin DeCiantis specializes in financial and strategic aspects of family enterprise at Lansberg Gersick & Associates, USA

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