Planning is a challenge for family business

15 de junho de 2016

São Paulo – Planning, discipline and competence are crucial for a family business to prosper throughout many generations and these factors need to be sought by these companies, in an assessment made Fernando Curado, consultant and president of the governance and strategy company MSCI Governança e Estratégia. On Tuesday (14) he presented his lecture “Governança na previsibilidade: paradoxos na empresa familiar” (Governance in Unpredictability: Paradoxes in Family-Run Businesses) at the headquarters of the Arab Brazilian Chamber of Commerce in the city of São Paulo.

Curado said that despite the difficult moment faced by Brazil, there is hope among business owners and some signs showing the recovery of the economy. Besides, he said, the country has a consumer market of 200 million people. “Brazil needs to establish sustainable consumption”, he said.

In this moment of crisis, he told the audience, family businesses need to plan long-term, after all, it’s planning that secures business continuity. “Here in Brazil we don’t have a culture of planning. Abroad, businesses and people have this culture. They face very rigorous winters that drive them to prepare to survive. Here, in a tropical country, we don’t need to plan for the future focusing on surviving”, he said.

Discipline in achieving established goals and competence to find out what is the “comparative advantage” of the company are also essential for a business to prosper throughout several generations. In a crisis, however, family businesses face a paradox and an advantage. The paradox, he said, is to execute, simultaneously, actions that are at odds with each other, such as cutting costs and securing product quality.

“You need the ability to clearly identify a paradox and also to use both sides of that paradox”, he said. He mentioned as an example the acquisition of a possible competitor in a moment of crisis or investing in another sector that is complementary to the one your company operates in. It all relies on the ability of the company to assess risks and opportunities and to plan ahead.

Besides assessing contradictions, family businesses that grow and survive crisis after crisis share another feature: usually, they are quicker to make a decision in an economic downturn. “A family business that has grown throughout the years didn’t get to where it stands today without facing crises. It learns that, in these moments, if a company is quick it will have an advantage. And in family businesses, the distance between the problem and the decision (managers) is short. You don’t need the approval from the central office to act quickly”.

These are not the only features needed by family businesses. They have to turn professional, all its shareholders need to have a clear goal for the company; it needs to focus in its projects, question itself constantly and, if possible, have a family council that is independent from the company’s board of directors. Another challenge: to avoid disruptions in the company, caused by family disputes, incorrect resource allocation and divergent projects.

The talk by Curado is part of “Lecture Cycle” promoted by the Arab Chamber and organized by director Mário Rizkallah. Besides Rizkallah, Curado was also welcomed at the Arab Chamber by vice-president of International Relations, Osmar Chohfi.

*Translated by Sérgio Kakitani