The hospitality business owner grips his head in his hands, wishing he would’ve retired two years ago — so he didn’t have to leave the pandemic’s tough calls as a final note in his career.
Lisë Stewart has enough of these stories to write a screenplay.
That’s part of why she’s the go-to when you want to hear about what family businesses are experiencing at any given time. She sees it all.
ROI-NJ spoke to Stewart about what dramas are unfolding today in New Jersey’s family business landscape, and how her clients contended with a difficult year.
ROI-NJ: To start, could you provide a general overview of how the past year of business has gone for your family business clients?
Lisë Stewart: I would say what we’ve seen is approximately 70% of businesses have been negatively impacted and about 30% of businesses have either stayed the same, or this has actually created a boon for them. We have some manufacturers busier than they have ever been, depending on what the products are. But there are family businesses struggling, for sure, particularly those in the hospitality industry.
There’s now definitely a sense of renewed hope. Our businesses are really picking up. They’re willing to invest in their businesses wherever possible. If they were doing well before the pandemic, they’re doing even better now. There’s a sense of potential and possibilities, and that’s only going to get better. Even for clients who might not have gotten the political outcome they were hoping for, there’s still a sense of optimism about immunizations and the business environment.
ROI: What are some prevailing trends at the intersection of family business and the pandemic’s effect on business?
LS: One of the big ones is succession planning, and a lot of that planning has been put on hold to try to figure out what’s going to be the long-term impact from COVID-19. And, not just COVID, it’s a combination factor. Many people see a significant change in the current administration as having the potential to impact business going forward. Regardless of whether they’re negatively impacted or not during the pandemic, they took it as a time to pause for a moment and figure succession planning out.
At the same time, our older generations, through the pandemic, became a vulnerable population. That means our older business owners in family businesses who held positions of power became vulnerable. That’s created an interesting dynamic. Younger generations of business owners, either because they had parents who got ill or there was a concern that they would be, it was a realization that mom and dad — who had always been in a powerful position — should probably be out of the workplace because they’re potentially quite vulnerable. It has implications for the next generation and how it impacts their role. It’s a conversation that I can tell you I don’t think people were having. We’ve been trying to push this concept of risk management for years. Now a light bulb has gone on. And, so, something like estate planning, family businesses are crowding our dockets with wanting to have that done.
ROI: Perhaps the most major shift for business over the past year has been the work-from-home arrangements companies have been forced to adopt. Have family businesses embraced it?
LS: Privately held businesses have been struck by how productive their workforce has been, even if they were not fully deployed in the workplace. Before this virtual working environment, I had a number of family-owned businesses as clients who said: ‘We’ll absolutely never have people working from home. That’s not how we do things,’ or, ‘It’s not effective,’ or, ‘People will cheat the system.’ Now, we’re having employers knocking at our door saying that it worked better than they thought and that their employees are happier with it. So, they want to know how to continue to have more flexible workplaces. That’s a stunner. That’s really going to have a ripple effect among our privately-held businesses for quite some time.
ROI: Any other observations of shifting thinking among family businesses that you want to sign off with?
LS: What’s interesting to me is the pandemic caused a number of changes in people’s thinking. Now, we’re seeing the weather and the impact of natural disasters — what’s happening in Texas, for example — I’ve been amazed at the differences in the types of communications we’re seeing among our family-run and closely held businesses.
This isn’t necessarily brought on by the pandemic, but there’s a new awareness of the impact of global climate change, and there’s a push toward corporate responsibility. I think that’s also driven by a younger generation coming up through the ranks. People are taking what’s happening in the environment more seriously and asking, ‘What’s our environmental footprint look like?’
Then, with the Black Lives Matter movement and other awareness-raising movements, you have these businesses realizing they don’t have a diversity and inclusion policy. Maybe they never thought about things like that. This element of corporate social responsibility has been bubbling to the surface. And we’re getting calls from family businesses that want an equality focus and policies. I believe all of this has arisen out of the turmoil of 2020, which has given birth to some truly significant movements in the private business space.