Manama: A new report from the STEP Project Global Consortium and KPMG Private Enterprise has demonstrated how the unique structure of family businesses has empowered them to respond to the impact of COVID-19. The study found that the involvement of the family and their long-term mindset has enabled them to demonstrate resilience in the pandemic, placing them in a key role to lead the economic recovery.
The report, titled Mastering a comeback: How family businesses are triumphing over COVID-19, includes insights from nearly 2,500 family businesses and more than 500 non-family businesses. It uncovers three core strategies used by family businesses to address the immediate impact of COVID-19 include: Family businesses are focused on protecting their succession plans and long-term future for the next generation. This long-term mindset has enabled them to leverage their patient capital to understand the full impact of COVID-19 on their business and others in their industry, with a view to adopting plans for the long term, rather than just mitigating the short-term impact of the pandemic; They took steps to address the impact of the pandemic not only on their family and business, but on the welfare of society, and the needs of all their stakeholders including employees, customers, suppliers and local communities and Family businesses were found to be 42 percent more likely to implement business transformation strategies than non-family businesses during the pandemic. Family businesses with multiple generations in the firm were 45 percent more likely to implement a business transformation strategy than single-generation family firms.
“Family businesses are the economical backbone within the global marketplace, and more so in the Kingdom of Bahrain. The pandemic has had a unique domino effect over the past year, which has impacted the financial success of all businesses including family businesses. To ensure steady growth while sustaining their existing operations during these turbulent times, family businesses need to tackle the challenges of COVID-19 to stay resilient and emerge even stronger. It is critical that family businesses also focus on other objectives, such as governance and transgenerational succession. After the initial action and strategy to cushion the business from the financial impact from COVID-19, families need to shift their attention to their longer-term strategies for sustaining the purpose and non-economic value that the family derives from owning and managing the business. Family businesses in the Kingdom are already closely integrated within the community through the products and services they provide, the jobs created, and their philanthropic initiatives. This crisis is a test of time, and we truly believe that the more mature and professionally run family businesses will not just survive the impact but thrive beyond it,” Harish Gopinath, Partner, KPMG Enterprise at KPMG in Bahrain, said.
