Edition 234 – Lockdown 2.0
As I’m writing this, Melbourne has entered Stage 4 lockdown and, for the first time in it’s almost 180 year history, is experiencing the imposition of a night time curfew. For weeks, the news out of Victoria hasn’t been great and the imposition of Stage 3 restrictions doesn’t appear to be bringing the COVID 19 menace under control.
For me, there’s a real lesson in what is happening in Victoria, right now, for the business community. Whilst Stage 3 has been in place for 3 weeks, there has been talk in the media of a ramp up to Stage 4. Last week, the dim hum was building to a roar. Stage 4 was coming.
Which begs this question? If Victoria had been preparing for a Stage 4 lockdown, why is it announced on a Sunday to come into effect at 6pm that night – but there were no guidelines issued as to which businesses could and should remain open and which shouldn’t? Small and family business needs certainty as to what they are allowed to do. They are owned and operated by law abiding citizens who want to do right by the community. However, somehow, as the hum turned into a roar, no one at the State Government level appeared to give consideration to how the restrictions should be communicated to business!
Remember, this is on top of the fact that 4 months ago, Victoria, along with the rest of Australia, went into a Stage 3 lockdown in an effort to contain COVID 19. Wouldn’t they, back then, have been scenario planning for what Stage 4 looked like – for everyone?
Today’s edition of Growth is not about bashing the Victorian State Government – that’s not my intention. However, there is a big lesson for business in the right here and now. Today, what I wanted to highlight is how little planning happens at all levels of family business to prepare for catastrophic situations in the life of that family business.
In my 30 plus years of working with family business, here’s what I’ve seen that has been unplanned for and, in the process, has either detrimentally impacted, or killed off, family businesses.
- The death of a business owner – and I’ve seen this on more than one occasion, with at least three in their 50’s.
- The serious injury of a staff member on site – which has created life long consequences for the individual and significant financial and reputational cost to the business.
- The loss of a major client or significant contract.
- The withdrawal of funding by banks – with, in one situation, 72 hours notice.
- A flood or fire which destroys the business premises.
- A significant health event or injury for an owner of the business.
- An acrimonious split amongst business partners.
- The ongoing health issues associated with ageing parents and their need for your support and care..
- The passing of family members – be they parents, spouses or children.
- Accidents – lots of accidents.
- The loss of a key supplier.
- The departure of key personnel to set up a similar business, in opposition to you, with at times, your clients becoming their clients.
- Mental health issues of a business owner or key member of staff.
- Fraud committed by a trusted member of staff.
- Theft – sometimes by staff and, horribly, sometimes by members of your own family.
- Cyber attack.
- And now, a pandemic.
None of these are avoidable. All of us will experience at least one of them at some stage in our business life. However, I would argue that significantly more than 90% of family businesses have no plan for how to handle a disaster of any magnitude, when (not if) it finally strikes their business.
Look to the State of Victoria right now. Take a moment to consider what it must be like for a family business owner to be waking up on a Monday morning, with a curfew in place, but not knowing whether or not they can open the doors. Would your family business know how to cope? Would it survive?
This Week’s Tip
Disaster Recovery Planning is not a “moment in time” project.
It is something that, once developed, should be trialled, then updated at least annually.
It’s like a fire drill – you should know your escape route if things get hot!