Family Business after COVID

Family Business after COVID

On this episode I speak with Dennis Jaffe about what you can be doing now to help your family business after COVID and the global pandemic have eased.

We draw on Dennis’ expertise and experience in this episode to look at how you re-invent your family business after the pandemic.

We look at what other family businesses have done through previous crises and in particular those that Dennis has studied for his book ‘Borrowed from your Grandchildren’.

This looks at family businesses that have survived for more than 100 years and explores the common characteristics of these firms.

In a wide ranging conversation about family business after COVID we cover:

  • What families can be doing now
  • Reviewing why you are in business together
  • The role of Governance
  • The roles each generation can play
  • How to build resilience
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About Dennis Jaffe

For over 40 years, Dennis has been one of the leading architects of the field of family enterprise consulting. As both an organisational consultant and clinical psychologist, he helps multi-generational families to develop governance practices that build the capability of next generation leadership and ensure ongoing capability of financial organisations and family offices to serve their family clients. Visit his website by heading to 

Reinventing Family Enterprise after the Pandemic


By Dennis T. Jaffe, Ph.D.[1]


I remember my shock and deep grief when I visited the site of the twin towers after 9/11. Until then I could pretend that things were going to return to normal, but upon seeing the rubble, the enormity of what was gone forever pierced me. The same thing happened to those who lost their homes in fires; it seems unreal until you visit your former homesite. Emerging from household quarantine is in some ways similar, but without a clear picture of what has been lost, the grieving process is a little short-circuited. For a family enterprise, whether large or small, the global upheaval is deeply personal, as the loss may overturn a long legacy of success and hard work.


An air of unreality about business and the future can take root while we cocoon inside our households. As we savor the intimacy and security of our home, we try to envision and prepare for the challenge that faces our own, and other, family enterprises as we emerge. It seems impossible to plan ahead and prepare. The barrage of news doesn’t help. If we feel depressed, we can find a report that reinforces the feeling. If we feel energized and optimistic, we can find heroic stories of how families are succeeding. If we can find information to support the most optimistic or pessimistic future views, so how can there be reasonable planning for what is to come?


This article attempts to offer some insight from the middle of the crisis on how family enterprises—small and large family businesses, and financial entities like family offices–can deal with the upheaval.  It is not about financial or business planning, but about how the extended business or financial family can recover and even reinvent themselves amidst a vast change not only in business, but in their whole way of life. While this crisis may pass, preparing for adversity must be on the agenda of every wealthy family.  


No Return to “Normal”.

Seeing the whole world essentially shut down and workers sheltered in their homes, and the drop in the economy, touches everyone personally. It is also a global crisis as large as we have seen in our lifetimes, as an economic prophet and a monk each note:


  • Historically, pandemics have forced humans to break with the past and imagine their world anew. This one is no different. It is a portal, a gateway between one world and the next. We can choose to walk through it, dragging the carcasses of our prejudice and hatred, our avarice, our data banks and dead ideas, our dead rivers and smoky skies behind us. Or we can walk through lightly, with little baggage, ready to reimagine another world. And ready to fight for it.[2]
  • We are in the midst of a highly teachable moment. There’s no doubt that this period will be referred to for the rest of our lifetimes. We have a chance to go deep, and to go broad. Globally, we’re in this together. Depth is being forced on us by great suffering, which as I like to say, always leads to great love.[3]

Every business, large and small, feels threatened, and faces deep challenges just to stay afloat. Without being able to leave home, attend social events, go to work or attend school, we cannot imagine how life will return to some sense of normalcy. Family enterprises are learning how much they depend on social interaction. Such uncertainty and our inability to control or even influence it, makes us anxious. And when we’re anxious, we can do impulsive, short-sighted things. 


The challenge is to move from grieving over a way of life that we cannot return to, to transcend living with extreme expectations either that the path forward will magically become clear or the opposite, helplessness that there is nothing that we can do. Learning from experiences of recovery from other traumatic events, and what families are doing, can prepare and educate business and financial families.


The Family Advantage.

A deep crisis draws upon the private and often invisible advantages of family enterprise. It is not a group of strangers investing together; the owners and wealth holders have a personal relationship that includes personal connection, respect, non-financial goals and trust. They also have a long-term perspective; in that they see their wealth as a legacy for future generations. These qualities allow them to act quickly and with unity, and to make sacrifices that others cannot.


The personal relationship means that they care about each other. Their trust and familiarity mean they can be open and candid with each other about the emotional pain and stress of the crisis. They can agree to make sacrifices for the future and can quickly come to agreement about difficult actions. They can take risks and take actions that are aligned with their personal values, that go against immediate financial benefit.


Shared values enable the family enterprise to take quick, flexible and decisive action. I received a note a few days after businesses shut down from one of my favorite local family restaurants. They shared how difficult it was for them to operate with almost no income, and how they were surviving with take-out dinners. They noted that they had met with their employees, and shared the dilemmas, and agreed to furlough half their employees. They worked together to decide who would remain, using personal needs as a guideline: those with children and families were retained.


Then they reached out to their customers and friends to ask us to support a fund they \created for those who were laid off. Their family nature made it credible for them to ask for help from customers, as they demonstrated their own commitment to values about their employees and the community. Such adjustments are common, but family businesses are especially quick and visible in such responses. Reaching out reinforces and builds trust for the sacrifices to come.


Dealing with Loss, Grief and Helplessness

The global economic effects of the health crisis are such that we may have to say good-bye to many comfortable and familiar activities that we take for granted—crowded buses, streets, malls, bars, theaters and concert halls, even smiling faces and hugging friends. Loss of such magnitude causes grief, even if it is not fully conscious. Frustration, stress, anger and depression accompanies grief and loss. These are emotional responses. Families supply emotional support with each other for the shared loss. They can get beyond them by sharing and pull together to take timely and appropriate action. By being open with each other, the family can then begin to look honestly and clearly at what lies ahead and pull together for action.


The current crisis means immediate business and investment losses. The resulting anxiety can lead family members to blame their family leaders or become paralyzed. Every day of shutdown and loss of business endangers the business. This threatens a livelihood some family members have depended on their whole life. Family members can reach out to each other, talk about the losses, and make plans for how to manage as individuals. At this time, some family members may no longer want to work together, or make the sacrifices needed. A family has to decide together that they want to remain united in adversity and allow family members who want to exit to leave. They have to negotiate reasonable terms with more limited means than they have had previously.


One common way people cope with crises is through magical thinking—imagining that what you would like to happen is likely to occur. Examples abound: Things will bounce back to normal in a few weeks, cures for the virus will be discovered, and businesses will rebound once we can resume interaction. This is comfort food, tempting us to feel good now with no thought of consequences. It is also not based on reality, and so lulls us into inaction.


Unfortunately, in times of crisis, feelings of anxiety and threat can cause people to draw inward and only look after themselves, as evinced by the long lines at grocery stores and gun shops. The ethos of every man for himself—Ayn Rand’s noble business warrior—is deep within us. This individualistic cultural model regards a business owner as a lone wolf, singularly responsible for their business. With this mindset, some owners make tough decisions on their own, rather than seeking help from others. While this might feel noble and self-empowering, it can be another version of magical thinking. We cannot resolve this one on our own by sheer will and determination.


The Family Review: Communicating and Redefining Who We Are

So much has changed. Whether they operate a business or have a diversified family office, they are entering new territory. Systems and even values are being tested. The few family members (and their advisors) who are decision makers cannot just move forward. To sustain trust and connection within the family, the family enterprise leadership must keep the whole family, who are their shareholders and beneficiaries, and whose children are the future leaders, informed. More than that, a family enterprise must listen to the concerns and desires of their next generation, who are the future leaders and owners.


The family leaders have to communicate more actively in times of crisis and upheaval. For example, selling a legacy investment or business, taking on debt, remaining responsible to family employees and suppliers, sacrificing distributions, or closing unprofitable businesses or divisions are more than business decisions. These issues are emotional for the family. If the leaders take action without informing and sharing the rationale for their actions, the heightened emotional climate can lead to backlash and breakdown of trust.


Every family should hold a community meeting, and because of the tumultuous economic climate, this meeting will be a big one. The family has to conduct a family review, to openly assess where they are in the new world and consider major current and future changes. This is more than a business meeting it is a family affirming and renewing event as well. The family is anxious and is being asked to share pain, make sacrifices, and embark in new directions.


For a long-term family enterprise, these gathering involve many people with varied roles.  The review must consider some basic questions:

  • How have their systems been working?
  • What elements of their information and governance have been strained?
  • What do we have to let go of to get through this crisis and what sacrifices do we need to make?
  • What do we need to change?
  • Did our family agreements hold up or do they need updating?

Family traditions and values may have been strained. For example, family allocations may be more limited, and the family may need to update policies and practices about distributions, spending and lifestyle. What should change about our philanthropy and community giving given the great needs we are seeing and our own prior commitments? Are we living our values about community and sustainability? How have they changed or how do we continue to live with them? Should we sell or continue to use our jet or yacht?


Drastic actions have to be taken, that involve pain and sacrifice. Banyan Consulting Group has opened an online survey of actions that family enterprises are taking to respond to the crisis. The actions taken were huge and deeply impactful. These actions depend upon the good will and trust between owners and employees, and we can imagine that family owners are more able than a group of unrelated owners to decide to take these steps, quickly and thoughtfully.


Most common actions:

  • 69% Delay significant capital investment
  • 40% Reduce salary or benefits
  • 35% Furlough employees
  • 30% Borrow additional money
  • 28% Reduce/agree to reduce dividends
  • 27% Divert human/financial resources
  • 24% Lay off employees
  • 18% Acquire distressed properties
  • 10% Owners put in additional capital

In these meetings, families can reaffirm their values and strengths. They can make it clear that the family must experience short-term sacrifice to secure long-term survival. They can talk about their historic and legacy values and how they are being tested in the crisis.


Sustaining Community in a Distance Environment: Virtual Family Connection

After a generation or two of success, family members and households have left their hometown, and often live in many places. To remain in touch and working together, they have probably already been experimenting with virtual meetings. Private family platforms like Trusted Family[5] allow family members to store and work on shared documents, conduct business meetings and share personal news, with privacy and safety.


Family enterprises need to gather together regularly. With the new reality, this process is

They are holding virtual family meetings, more frequently as a whole family, and in meetings of key operating groups like the Board of Directors or Family Council because the family must make sometimes drastic decisions and act in the crisis. Meetings have different purposes:

  • Sharing information during the crisis
  • Talking about reactions and making decisions
  • Personal connection, hanging out together.

All three of these intentions are important to remaining a connected family and running enterprises. While something is lost when they meet virtually, they also benefit from easily assembling people without the difficulty of travel.


Trusted Family[6] notes three activities that build deep connection over distance for virtual families:

  • Create consistently recurring events: people need to look forward to activities and come to use and depend upon them.
  • Focus on rich content: virtual connection must be interactive and engaging to maintain interest and have emotional impact.
  • Launch an online communications hub: Public social media are less than private and safe, so the family must default to their own hub to keep abreast of activities, business/financial, and personal. The family needs to remain aware at both levels.

New Directions: Finding Opportunity.

Families are also finding opportunities and new directions during the crisis. Russo’s, a hundred-year-old food supplier lost half its business when schools and restaurants closed. They had talked about offering gift boxes that they could bring out to customer’s cars. They quickly began that experiment and it has been a huge success.[7]


Firmenich, a 130-year-old, Geneva-based family business that is the world’s largest manufacturer of fragrances, offers an inspiring example of how family values can lead to innovation. “As a responsible company, it is critical for us to take action and demonstrate our solidarity with the local communities where we operate in these unprecedented times,” commented Patrick Firmenich, Chairman of the Board. “This hand sanitizer allows us to protect our people and the frontline emergency staff working relentlessly to combat this pandemic. Together, we will prove that solidarity is more contagious than the virus.


“What enabled the quick reaction of Firmenich was, on the one hand, its recognition of the societal value reflected in its purpose and fundamentals as well as an inclusive capitalism business model, and, on the other hand, a remarkably resilient-to-shocks governance mechanisms model of concentrated family ownership, independence, financial prudence, long-term thinking, and skillful balancing the business and owners’ needs.”[8]


Families have to reinvent themselves, and the crisis offers an opportunity for families to go in new directions, renew important values, and take action to do things that might have seemed too risky before. These changes allow the rising generation of the family to step forward, and sometimes accelerate the transition of leadership.


It has become something of a cliché that a crisis is also an opportunity. But the current crisis is creating such upheaval in our whole way of life, that this cliché is also a reality. The vast societal transformation puts pressure on every family and every business. A business or financial family must come together in new ways to emerge from the crisis. These families must manage the emotional demands, inform each other and redefine how they work together. This essay has noted some of the elements of this response.



[1] I want to thank many colleagues for thoughts about this, especially Jim Grubman, Christian Steward, Jeremy Cheng and Jim Coutre.

[2] , brought to my attention by Christian Stewart.

[3], brought to my attention by Christian Stewart.


[4] Banyan citation

[5] Trusted Family link

[6] Trusted Family whitepaper

[7] Paul Sullivan, For Small Business Owners, Hard Decisions Become Personal. NYTimes, April 3, 2020.

[8] Marta Widz, Family Businesses in the Times of Crisis and Global Recession: A Story of Resilience and Sustainability, FFI practitioner, April 22, 2020.

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