The Avedis Zildjian Company, the world’s largest cymbal and drumstick maker, is the country’s oldest family-owned business. As such, it has endured countless disruptions since its founding in Istanbul nearly 400 years ago in 1623, including when the Armenian-American family fled Turkey in 1910 and settled in Massachusetts. Sisters Craigie and Debbie Zildjian are its 14thgeneration owners. .
The Zildjians symbolize the staying power of many family-owned and privately held companies that have survived during turbulent times. The circumstances vary, of course, but for private companies in particular, leadership lessons can be gleaned from each disruption.
Effective leadership is vital in unsettling times like this because the disruption is tough and tricky. Turbulence isn’t necessarily a problem to be solved but to be managed. Having advised hundreds of family-owned and private companies, we offer these takeaways from observing strong leaders manage their businesses and succeed far more often than they falter.
· Care for Yourself and Those Around You. In unsettling times, remember you set the example for today and the long-term. Be resilient. Manage your “mentality” and do what you need to do to keep a good attitude. Communicate that it is a time for concern, but not panic; and that the business has the wherewithal to get through these tough times.
Expect almost-certain delays, so don’t get frustrated. Communicate that things eventually will stabilize. Care for your workforce; make sure their working environment is safe and they and their families feel looked-after. Communicate more by sharing real information, perhaps with a daily update.
· Over-Communicate. In today’s world of emails and instant messaging, forego those impersonal communications. Make direct contact with the invaluable links in your value chain. Pick up the phone and ask your customers or clients and your suppliers, “How can we help?” By showing genuine concern, you let them know how important they are to you, and how you can help them make the hard decisions they also must make.
The same goes for your employees. Communicate with them directly about the challenges – and the opportunities – that lie ahead by working together. Use the technology advances that will make your work life easier and your decisions quicker. A video-conferencing technology such as Zoom is proving invaluable to bring now working-from-home teams together. Your millennial and younger employees get it, and they easily can show others how to master it. Increasingly, employee groups are scheduling lunch times together – or after-work happy hours – remotely.
· Take Advantage of the Urgency. Pull your team together and get focused quickly. Undoubtedly, the conversations will differ from your typical deliberations, but that can be a benefit. Identify fresh avenues you can pursue on the product or services front. Just look at the number of manufacturers who suddenly are using their talents to make respirators, hand sanitizers and face masks needed to fight COVID-19. Identify those promising projects you’ve delayed in the past and tackle them. Identify cost-savings and efficiencies that emerge at a time like this.
· Seize the Unexpected Advantages That Troubling Times Trigger. Few clouds dissipate without a silver lining. The businesses that have survived disruptive times have done so because they have been able to turn challenges to their benefit. If you have a strong balance sheet and can sustain more risk, take advantage of the lower cost of debt capital now available. One financially healthy medical-related company we know has long weighed entering a new health field. While today’s uncertain business conditions may make their entry bumpier, strategically, the lower cost of capital balances the new initiative’s business risk.
Family-owned and private companies possess advantages publicly held companies that must manage quarter to quarter do not. This is the time to emphasize the family in “family” business, to keep your employees close and potentially provide assurances and extend benefits. In the 2008-2009 financial crisis, the building products distributor Parksite Group, an ESOP, took several inventive ways to eventually get back on track They included what in effect was a voluntary 5% pay cut by employees and employee ideas for savings that added up to six-figure reductions in annual costs.
In addition, on the leadership front, be alert to identify future leaders – often those on the lower rungs of the career ladder – who emerge in unexpected places by generating innovative and workable ideas. In good times, they often get overlooked. Reward them with “battlefield promotions,” reflecting their contributions.
Conversely, this also is the time for leaders to lead. If a senior manager or executive isn’t stepping up to the challenge, don’t hesitate to promote someone who is delivering what’s essential. These actions will send strong signals throughout your organization about what’s important.
In turbulent times like these, leaders of family-owned and private companies have outsized opportunities to make important change by embracing innovation and agility and exploiting their natural advantages.