Family businesses traditionally pull together to survive a crisis, but the dramatic impact of the pandemic has brought even the strongest to their knees. They will have to develop new skills to adapt and survive, write Peter Vogel, Patrick Reinmoeller and Karl Schmedders.
As you lower your body into the hot springs by Hoshi ryokan about four hours west of Tokyo by train, you may not be thinking much about this traditional inn’s ownership. But in a year that has brought the hospitality industry to its knees, it may be this particular detail – that the eponymous inn is run by the 46th generation of the Hoshi family – that will play a key role in its survival.
From LEGO to Walmart to LVMH Moet Hennessy, family businesses account for as many as two thirds of all companies worldwide with some, like Hoshi (which was founded in 718), dating back well over a thousand years. These businesses have weathered pandemics, financial crises and waves of industrialization.
However, 2020 was different. The COVID-19 pandemic has hit most companies hard. While many family enterprises – by which we mean a business that is dominantly controlled by a family with the intention to sustain family control across generations – have honed and developed the capability to survive shocks, the current crisis has been unique in its complexity and has challenged even the most resilient and adaptable firms.
At the end of March 2021, after 60 years of providing four-star accommodation in Zurich, the Glärnischhof will close due to the effects of the pandemic. A 95% drop in revenues was more than the hotel could bear. Its owners have spent recent weeks trying…