The rich set of relevant issues raised by our panelists makes it almost impossible to come up with a comprehensive summary. I apologize in advance for the potential short comings in the following summary. For those of you who were present, I welcome you to add your own takeaways in the Comments section below, as well as to pose any questions.
An important overall argument was made for the need for constant learning, whether in crisis mode or not. Knowledge facilitates preparation and reduces the risk of being caught by surprise. As our society in general does not like risk, we are often busy trying to strive to hedge against risk, but then we may hedge against opportunities too. SMEs and family businesses are possibly better positioned to keep their eyes on limitations and perspectives than larger entities.
Long-term focus: To have a long-term focus is paramount. The managers of small/medium size enterprises typically have some of their own resources invested (“skin in the game”), and family-owned/managed firms are perhaps a good example of this. To reinvent and to build for the future is becoming central!
Responsibility: There is a strong sense of responsibility among senior leaders in most small/medium sized enterprises, perhaps above all in family-owned firms. Again, long-term thinking prevails, tempering any temptation to make short-term cuts in the labor force etc. With responsibility comes accountability.
Innovation: The successful family-owned firm, and all firms in fact, need to be highly innovative and adaptive, particularly when it comes to adapting quickly to its customers’ changing priorities. Commit to development of processes and products that are innovative, and do not sit back and relax. Innovation must be constant. What works now may not tomorrow, so stay one step ahead by investing in innovative production techniques, product categories and products. Companies with an innovation mindset are the ones who are usually the most flexible and adaptive.
Financial strategy: The financial strategic dimension must be conservative, as partly touched upon already. But, let me add: Be careful when it comes to taking on debt. Too much of this can lead to an imposition of dysfunctional constraints during crisis periods. Banks, for instance, are notoriously lacking in support where firms truly might need it! Growth should be financed, primarily, through internal means, rather than through extra borrowing. The issue of financial soundness also touches upon the concept of health. The health of a company is like the health of an individual, so staying healthy always, crisis or not, is crucial. Be careful too with expansion, and remember that business models are always evolving.
Strong management: Good management means clear structure, good governance, control and courage. Here is another aspect of this: Top management must act totally openly and always with consistency, so that confidence and respect can be built among the firm’s employees. A credible senior management is essential and this must be based on solid demonstrated decisions! Decisions must be made quickly, and during times of crisis a sole decision maker, in contrast to a committee, team or board, can simplify and speed up the pace. The more complicated management is, the more quickly courage disappears.
Purpose: Teaching the next generations the notion of responsibility can assist in preserving or creating purpose within the firm. The German word “Vermögen” means something which can result in something else, tied to ability and capacity. Inherent here is that the notion of responsibility can be a reason for success especially when combined with gratitude, humbleness and generosity.
Please note: 1) Please note that this document is a summary of the major issues discussed and does not imply agreement or recommendations (business, transaction, investment, strategy) of any kind from moderator or participants. The Notes are written to allow for review of topic/s addressed during the event and should only be treated as such. Please contact us if you have any questions or need more information: contact@lorangenetwork.com 2) All events run by the Lorange Network, including digital, are run under Chatham House Rules. This entails the following: When a meeting, or part thereof, is held under the Chatham House Rule, participants are free to use the information received, but neither the identity nor the affiliation of the speaker(s), nor that of any other participant, may be revealed. As Lorange Network Member, you therefore agree to not share any summary documents, but may rather use the information from the event as an occasion for reflection or learning.
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