Like the 2008 recession, the current crisis seems to be proving the resilience of family businesses once again. In an interview with Merkur, a magazine published by the Luxembourg Chamber of Commerce, Family Practice Adviser Anne Goedert underlines the strengths of the family business model that are helping to mitigate the impact of today’s crisis.
What makes family businesses strong, in your opinion?
The fact that it’s family! Albeit equal skills, the level of passion, motivation and involvement in a family business is generally higher and sets it apart. Immersion in the family business from a young age leads to a more profound knowledge of the market and that results in high quality products. The family mindset permeates the company culture and relationships between employees and bosses are genuinely closer. These businesses also show greater resilience, better ability to bounce back and adapt to change. They can be more flexible because decision-making processes tend to be shorter. And lastly, they tend to be driven by a long-term strategy rather than the goal of immediate profits. They manage their finances cautiously and that gives them better resistance to crises.
You recently published a study on how the crisis has affected family businesses and how it was perceived by the Next Gen. What were your main findings?
Banque de Luxembourg has believed in this business model for more than a century and we support family businesses at every life stage, particularly with the handover from one generation to the next, which is a critical milestone. When the COVID-19 crisis struck, we thought it was important to capture the experiences of the Next Gen. We surveyed thirty young people aged 20 to 30, a third of them female and two-thirds male, with a wide range of profiles. Some were already working in the family business. Others were still studying or had no desire to join the family business at the time of the survey. We saw that their personal situations were severely impacted by the crisis. They were all under enormous pressure and genuinely suffered from the lack of perspective. The survey also revealed a new momentum that materialised very quickly to meet the challenge. Many young people rolled up their sleeves and embraced the opportunity to throw themselves into new projects, work on the ground with their teams and turn the challenge into a strength. For them, this period was an opportunity to become closer to their family and discover a new solidarity. For others, it was time to truly take over the reins of the business and become aware of the role they could play in it with a greater sense of legitimacy. The crisis led to a new inter-generational dialogue about the family business which helped them to emerge stronger.
Article by Corinne Briault for Merkur magazine, published on 11 March 2021.
Read the interview with Anne Goedert (in French) in Merkur magazine.
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