‘Smash and grab robberies’, ram raids, red tape and rising costs are taking their toll on New Zealand’s SMEs but are particularly tough for family businesses because the trauma goes home with them at night.
New Zealand Entrepreneurial Operating System (EOS) Implementer and facilitator Vijay Nyayapati said today that recovering from traumatic events in a family business can be challenging when different generations are involved in the business because the conflict and the pain are more personal.
“Over the past year, dozens of SMEs across New Zealand have been victimised by crime and pummeled by other bruising events, not least pandemic lockdowns. The concern is that these events not only break businesses but have the potential to break up families too.
“Many of the crime-targeted SMEs are family-owned, and even if they do have insurance to cover the losses of the criminal activity, the stress of the event can create rifts between the family members – particularly in how the business should respond and recover.
He said these familial fault lines often emerge in the different ways each generation thinks. Older generations approach management in a top-down, hierarchical manner, issuing commands and solutions they expect the younger members of the family business to follow without question.
On the other hand, younger generations tend to be frustrated if the management of the family firm isn’t democratic and their ideas can’t – or won’t – be heard by the older generation simply because they are younger.
“I see generational gaps in every business I work with. Different generations have unique ways of operating. When things are going well, family businesses generally have a collaborative approach to management.
“But if a stressful or traumatic event happens, that’s when the wheels can fall off,” Nyayapati said.
He said Covid-19 was enormously stressful for family companies, and many SMEs didn’t survive the economic effects of the pandemic. But because New Zealand collectively suffered the same trauma, the solutions and workarounds for Covid-19 were relatively less painful, Nyayapati said.
However, family businesses dealing with traumatic events find that anxiety, worry and fear exacerbate familial stress points, which can lead to a clash of ideas between the young and the old in a business – and potentially the dissolution of the company if the family isn’t careful.
“If the business has a pre-existing weakness, and most have them, a challenging event will expose that weakness.
“My advice to family-owned SMEs is not to buckle down and try to push through. Instead, now is the time for ideas, innovation and solutions, and you do this by fostering an open, communicative environment where everyone – no matter their age – can have their say,” Nyayapati said.
He said the best way to recover after a traumatic event is to explore the strengths of each generation and construct an environment that lowers tension as much as possible.
“The generational gap is a reality; we cannot avoid or deny it. The risk of letting tension dominate the business is that it stunts company growth (and family relationships) at precisely the time when you need to focus on recovery.
“Challenging events can be a catalyst for change and an opportunity to look at things differently. For that to happen, you need to be open to all ideas,” Nyayapati said.
Nyayapati offered some essential advice for bridging the generational divide.
1. Create an open platform
Everyone becomes stressed after a traumatic event, but there’s no reason to generate more stress by shutting family members out of the recovery conversation.
“Create a platform for openness, honesty, free opinion and contribution. Explore the strengths of each generation. Be open to other perspectives and remember: the desire to listen is not the same as the readiness to hear,” Nyayapati said.
2. Seek help
Every family has its emotional and historical baggage, but Nyayapati said a family business should be a neutral zone where everyone’s primary goal is to grow the business and make money. Yet, this ideal may be impractical for some families, and it may be wise to consult a third party to help move forward.
“Asking a professional mediator to facilitate a planning session can be a great way to ensure all opinions – from every generation – are heard, appreciated and analysed with the utmost seriousness,” Nyayapati said.
3. Set up a system
Tensions can arise in family businesses when some members become invested in proposing a solution and pursue that goal single-mindedly. However, Nyayapati said, systems are always better than made-up goals because they take the ego out of the equation, which is a risk for every generation.
“Systems are not just nice to have; they are imperative for running a healthy family business. A meaningful way to bridge the generational divide is to introduce systems that are impersonal and can be followed by anyone.
“Don’t compromise when building these systems. If you don’t have rules and processes, any solution you come up with will quickly fall over,” Nyayapati said.
More information: https://www.eosworldwide.com/vijay-nyayapati or www.vijay.coach