Taking Care Of Business In A Post Covid World

Covid has been and gone one could say , or , perhaps almost gone as we learn how to deal with it better,  given that,  all facets of society are a bit more knowledgeable of the virus.

Business the world over has suffered, and , needless to say, in no small measure so have family businesses. What makes family businesses even more prone to situations like a world wide pandemic is the very intrinsic nature of them. Family businesses do not carry out the necessary action of cutting down manpower levels to cut costs due to the fact that they carry emotional baggage. The likes of fathers, sons, daughters cannot be easily dismissed and even non relative employees are sometimes considered family.

The recent coronavirus outbreak has challenged many family businesses and resulted in different responses, including organizational transformation and innovation . In general, evidence has shown that a crisis can act as either a catalyst of or an inhibitor to innovation and therefore, the crisis context and resulting strategic responses create important and interesting questions for family business scholars. Indeed, while family businesses are often seen as sufficiently steady and risk-averse, they also include some of the most innovative organizations in the world.

Family business scholars have established that many family businesses tend to combine innovation with their traditions . An example of this in Malta would be the way family businesses have learnt to adapt by digitising their operations. Furthermore, it has been suggested that family businesses tend to innovate incrementally, often avoiding radical innovation initiatives

However, given that radical innovation in products, services, or even business models might be especially necessary during major crises—such as the recent and ongoing coronavirus pandemic we must understand more about family business’ abilities to engage in risk-taking and radical innovation behaviour during crises – and outside of crises to complement the picture.

Aiming to answer the question “How does a traditional family business configure its innovative behaviour during stable periods and crises over time?”  The interrelation between crisis behaviour and innovation in family business is key to the long-term sustainability of the family business.

Throughout a time of crisis, the family business has to rapidly and radically innovate the central dimensions of its business model and product portfolio; during the coronavirus pandemic in particular, the family business has had to sacrifice its financial returns and keep in mind the bigger picture.

Many family businesses seem to innovate differently than non-family businesses ; they tend to focus on incremental innovations, rely on a relatively high number of external collaborators, and use a fairly informal, unstructured, and risk-averse process.

 

(All factual and statistical information presented in this blog has been obtained from an extract of an article from the journalselsevier.com) Follow us on our Facebook page and Family Business Office website at www.familybusiness.org.mt

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