The "New Normal" in Family Businesses, Part 2: Crisis as Opportunity
How is the Corona pandemic changing our corporate and working world? In a "backward forecast", we look for initial answers. Concrete. Creative. And guiding action for today. Here is part 2 on the topic: Asset protection and value development under completely new premises.
We were pleasantly surprised in April 2020 that we had consensus as a family and among the shareholders right from the start: Covid-19 is not Armageddon for our company and therefore not for our entrepreneurial family assets. This positive basic attitude has made it easier for us to learn from other family businesses.
Crisis used as an opportunity
We took a very close look at operational measures to combat and prevent crises, such as the switch to respiratory equipment at Viessmann, a heating manufacturer with a long tradition. Here, the handwriting of the generation taking over was clearly visible. Many Next Generation members were able to use the crisis as an opportunity to take on more entrepreneurial responsibility.
As far as long-term crisis strategies are concerned, we have looked to family businesses that have had to weather global crises several times in their long history and have also seized entrepreneurial opportunities in the process. Nurturing this optimistic attitude and conviction remains one of our most important management tasks among the shareholders, the Supervisory Board and the Executive Board.
We have learned that the more the team shares our values and convictions, the easier and better it is to overcome difficult times. Our leadership image has also shifted in this direction: Away from the stationary on-site helmsman to a flexible "Jedi" who is also committed to our corporate culture in a positive way in virtual collaboration.
Equity ratio and responsibility
Our equity ratio, which our principal bank had always chalked up to us being "far too high" over many years, made it easier for us to renegotiate our financial and liquidity requirements on good terms with this very bank last year. This also encouraged us to always go our own way. In the end, no one but us can say what is right for us and our company. And we are happy to bear this responsibility. At the AGM in the summer of 2020, we as shareholders unanimously approved a dividend waiver for the next seven years, approved a substantial shareholder loan and "froze" the shareholder accounts for the next three years.
I wasn't the only one surprised that, in view of the pandemic, a constructive dialog about the advantages and disadvantages of outside capital participation became possible. Today, we discuss participation models with other entrepreneurial families much more openly than in the past. It is very gratifying that we as shareholders are thus coming closer to our goal of taking more assets out of entrepreneurial risk and at the same time being able to contribute actively to the positive further development of our family business.
Financial professionalism
Today, financial risk-bearing capacity and the associated key figures have a whole new relevance and quality for the shareholders, the corporate supervisors and the Board of Management. We also see financial professionalism as one of the main advantages of external involvement. This increase in knowledge would, among other things, strengthen a very critical point in the survivability of our family business through better liquidity and cash flow management - a thought unthinkable before the crisis.
In retrospect, we benefited greatly in crisis management from our arrangement in the family constitution, because as shareholders we were already relatively independent of the "fiduciary" family assets in our asset accumulation.
Here it goes to Part 1
Authors:
Christian Schiede has been advising and assisting entrepreneurial families and family businesses to strengthen cohesion, increase competitiveness and secure value since 2003. Contact: www.schiede.com; schiede@shpadvisors.com
Bastian Schneider has been helping entrepreneurs and management teams strengthen their brands from within and lead their organizations and businesses into the future from this perspective since 2000. In more than 30 industries. In Germany, Austria and Switzerland. Contact: www.brandleadership.ch; bastian.schneider@brandleadership.ch
