With Scotland’s family businesses reportedly among the world’s worst affected by Covid-19, it’s vital to re-assess core purpose and strategic direction to ensure they emerge fit for a new post-pandemic era.
Each generation in a family business has a unique set of challenges to tackle to ensure their future. Two generations ago it was getting through the war and subsequent rationing, then the post war baby boom and generation gap, and in 2008 it was the financial crisis. This generation has had to deal with Covid-19 and post-Covid uncertainty – financial hardship, a huge shift in working practices and a lockdown legacy of mental health issues. On top of that are the significant challenges of climate change and biodiversity loss.
However, resilience is at the core of Scottish family businesses’ DNA and strategic brand builder Lee Fitzpatrick of Outlaw Creative is confident a return to success can be achieved by many.
A specialist in brand strategy, who helps businesses build robust strategies for growth and distinctive visual identities that people remember, he says we need to be aware that a brand is not just a logo but something that permeates everything a business does, especially in covid recovery mode.
“A KPMG survey carried out earlier this year, The Global Family Business Report, showed that eight in ten Scottish businesses had seen their revenue affected by Covid-19 – 11% more than the global average. That’s a big hit taken by businesses that are seen as the backbone of our economy. But what they do have on their side is independence, experience and determination.
“It doesn’t serve anyone to lose an established business that may have the heritage of several generations behind it and be a big part of its local community and society. We need to look at how we can unlock the strong purpose and innovation that family businesses hold at the core of their operations to help them survive.
“Many family-owned businesses are actually amongst the most innovative in their industries. What makes a family business unique is the presence of owners that have the authority to pursue goals that benefit the family legacy, rather than just the harder financial goals. This can be an advantage over corporate competitors that are exclusively bottom-line driven. Having a true sense of purpose that isn’t just a tick box exercise is hard to find these days, and family businesses excel with this.
“Businesses today are facing socio-economic and environmental challenges at global scale, and because family businesses stem from family, they already have the love, care and empathy in their DNA that’s going to be required to build a more sustainable and purpose led future.”
Lee has been working with the Scottish Family Business Association to help drive the recovery from coronavirus and its CEO Martin Stepek says: “I have always felt we take family businesses for granted here in Scotland but I think we need to start thinking about them as precious assets for the local community, for a region or for the country as a whole. Today, more than ever we need to understand the full extent of the importance of family businesses in our society.
“We need to realise that when a family business closes that may be fifty or more years of slow, patient capital and thoughtful development gone. To replace its positive impact, say, on an island community, or a rural area such as in the Borders, Dumfries and Galloway, Aberdeenshire, or the Highlands, will take another fifty years. What a short-sighted, inefficient way of overseeing an economy and a society.
“The vast majority of hotels, guest houses, B&Bs, restaurants, cafes, and gift shops are not owned by faceless, anonymous global multinationals, but by local families from Shetland to Gretna, from Harris to Aberdeen, and every town and village in between.
“We have to really drive forward an understanding that it’s not just the economy but it’s the whole picture including the economy, the feel of a place, the happiness and wellbeing of the local people and the quality of smile on the face of the owner as they welcome you into their premises.”
Covid, he believes, has exacerbated two critical parts of our social structure – the economy and mental wellbeing – but recovery offers an opportunity to do things differently.
“If build back better is to be anything more than a hackneyed, cynical opium for the people, then we need to have a vision of prosperity and wellbeing as inseparable, not, as I think it is currently, mutually antagonistic. That is, many aspects of the economy harm our wellbeing, and many aspects of happiness don’t seem to fit within our current view of a “good” economy.”
“It’s clear that what distinguishes great family businesses is having family owners with a true sense of purpose. Investing time, and resources into developing a focus on purpose in a family business can therefore be viewed as a worthwhile exercise. Furthermore, it is a necessary investment to ensure the family’s well-being and the firm’s continuity.
“Family owners with strong family-centric non-economic priorities, for example, family cohesion and succession planning, demonstrate responsible ownership and a long-term view that reflects purpose beyond financial growth. Exactly the type of considered growth that we need to be prioritising to build back better.”
At four-star B&B Cawdor House, a member of the Scottish Family Business Association, owners Anika and Andreas Schulz recognise the significance of image and branding and have renovated during the pandemic. They’ve also set up an additional business, Café Lavender, which provided extra revenue.
“Working with that moral compass has a domino effect socially, financially and business wise. More than ever people need to feel connected and included. Our Kaffee and Kuchen culture at Café Lavender means we bring people together and also many clients have told us staying at Cawdor House is like staying in someone’s stylish and comfortable home.”