STEP Project-KPMG Global Family Business Survey Report 2021

Mastering a
comeback
How family businesses are
triumphing over COVID-19
Global family business report:
COVID-19 edition
March 2021
home.kpmg/privateenterprise thestepproject.org
Table of contents
01 02
Mastering a
comeback Executive summary
08 The impact of COVID-19 on family businesses globally
10 Sector and regional impact
12 From impact to action
18 Absorbing the financial shock of COVID-19
20 Putting purpose and values to work
24 Three key strategies:

Preparing for a comeback
32 Making the strategy choice:

Two key factors
33 Four family business personas
34 The Family Corporation
38 The Family Consortium

42 The Family Enterprise
46 The Family Venture
48 One size does not fit all
50 Methodology
52 Acknowledgements
55 About the Successful Transgenerational Entrepreneurship

Practices (STEP) Project Global Consortium
55 About the KPMG Private Enterprise Global

Center of Excellence for Family Business
56 Editorial
board 55 About KPMG Private Enterprise
Mastering
a comeback
T
here is a widely accepted view that family The strategic alliance between the STEP Project
businesses have mastered the art of Global Consortium and KPMG Private Enterprise
resilience, agility and adaptability to overcome allows us to share valuable insights into the key
whatever challenges may come their way. With this issues and opportunities that are affecting family
in mind, and for the benefit of all family businesses, businesses. STEP has successfully bridged family
we wanted to capture the valuable insights and business research and practice for the past 15 years
important lessons learned by family business and both organizations have deep experience in
leaders throughout the world in guiding their working with business families around the world.
businesses through the uncertainties of COVID-19. This has given us the opportunity to develop
a deeper understanding of some of the most
How has COVID-19 affected their businesses pressing questions that are on the minds of family
and their families? What actions have they business leaders. Understanding the impact of
taken to preserve, adapt and potentially even COVID-19 and the actions that family businesses
grow their businesses in such an uncertain have taken in response is just such an opportunity.
environment? Does resilience and agility continue
to be a unique family business advantage? As expected, the insights that we have taken
away are instructive for family firms of all sizes,
The Successful Transgenerational Entrepreneurship sectors and operating models. We are pleased to
Practices (STEP) Project Global Consortium and have this opportunity to share with you the ways
KPMG Private Enterprise came together to find in which family businesses around the world are
the answers to these questions – and many more triumphing over one of the most significant and
– by conducting a special Global family business unexpected events in their families’ histories.
survey: COVID-19 edition. The survey data was
collected between June 2020 and October 2020
and it captured the experiences and insights of
family businesses of all sizes and from a vast
range of industry sectors around the globe.
Andrea Calabrò Tom McGinness

STEP Global Academic Director, Global Leader,
Director, Family Business,
IPAG Entrepreneurship & KPMG Private Enterprise,
Family Business Center, Partner,
IPAG Business School KPMG in the UK
Throughout this document ‘We/Us/Our’ means KPMG and the Successful Transgenerational Entrepreneurship Practices (STEP) Project Global Consortium.
Mastering a comeback 1
Executive summary
Resilience is in their DNA the business and to plan for the long the STEP Project Global Consortium
term. This futuristic outlook is deeply and KPMG Private Enterprise came
Family businesses play a vital economic embedded in the culture of family together with the Global family
role in most countries worldwide. Not only businesses and it’s amplified by the business survey: COVID-19 edition,
do they make an important contribution family’s strong values and clear sense we had a clear purpose. Our goal was
to GDP, they also employ a substantial of purpose. to uncover meaningful insights that
portion of the global workforce. With such would help family businesses learn
important contributions to the world’s These attributes are built into the from each other’s experiences and
major economies, it is no surprise that DNA of family businesses and are provide guideposts for advancing their
family businesses are primed to be the often seen as unique and striking businesses into the future. We weren’t
engine of the global economic recovery competitive advantages. They are disappointed. As one family business
from COVID-19. the strengths behind the resilience leader described, “One door closed, and
that has made so many family 10 more opened up.”
They are in the best possible position businesses successful in dealing with
to assume this leadership role because the immediate impact of COVID-19, Without question, the global economy
of the unique attributes of family then swiftly turning their attention to is in motion and, as family businesses
businesses, not the least of which is longer-term strategies for steering continue their focus on building for the
their well-known long-term orientation. their businesses and families forward. future, they will likely remain in the
It’s common to hear remarks about driver’s seat of the economic recovery
family businesses thinking in terms of and provide important guideposts for
quarter centuries and not the short-
From initial shock to the
others to follow. We expect that their
term returns for the next quarter. They current reality insights will help to open up many
are focused on building a business more doors of opportunity for family
There have been numerous academic
that will be carried forward by each businesses worldwide.
studies and opinion pieces in recent
generation, which gives them the time
months regarding the impact of the
and patience to think strategically about
pandemic on family businesses. When
2 Executive summary
Actions in the short term Strategies for the long term family businesses were 42 percent
more likely to deploy a business
The impact of the pandemic came as an One of the key differentiators of family transformation strategy than non-family
immediate shock to most businesses. businesses is in how they define success. firms. Many also took the time to look
Family and non-family businesses While profits and dividends are important seriously at ways to streamline their
alike had to act quickly to protect their financial measures, success in family operations, including accelerating the
companies from a sudden drop in sales businesses is defined by both financial implementation of new digital solutions,
and supply chain disruptions. Non- and non-financial objectives, such as and to focus on important family issues,
essential costs were cut during the early control, transgenerational succession, such as succession planning and their
and highly unpredictable months of the social capital, emotional connection to the ownership structures.
pandemic and employment reductions firm and reputation. These non-financial
were necessary in some cases. The (socio-emotional) objectives are important This unexpected gift of time provided
characteristic long-term view of enough in family firms to have a direct the opportunity to rethink, revamp and
family businesses took hold quickly, impact on their decision making and how revitalize their strategies and their family
however, demonstrating once again they measure success. dynamics for the long term. This is
how and why family businesses have particularly the case as environmental,
managed to thrive during one of the The family’s legacy, honoring the social and governance (ESG) factors
most uncertain times in recent history. traditions of previous generations and are becoming key value drivers and
supporting the community in times of underpin the need for NextGen family
Because business families have need all reinforce the socio-emotional members to be involved in shaping the
been so committed to sustaining characteristics of family businesses. future of business. In assessing the
entrepreneurship across the generations, It also explains why, after taking need for new strategic thinking, family
a deeply resilient instinct has been immediate actions to cushion the business leaders typically looked for
embedded in their DNA. With the sudden financial shock of COVID-19, families answers to a few key questions:
arrival of COVID-19, those instincts returned their attention to familiar
triggered immediate financial actions, territory: developing longer-term • Do we have a strategy in place that
such as carefully managing their cash strategies and sustaining the purpose addresses the current reality as
flow and liquidity requirements during a and non-economic value that the family well as the longer-term prospects
period of decreased customer demand derives from owning and managing for the business?
and supply chain disruptions. Many the business. That deep sense of
renegotiated their vendor contracts or purpose was evident in the ways in • Has our strategy been tested?
adjusted payment terms. which business families supported
their communities and a wide range • Does our strategy need to be
Family firms also took several non- of stakeholders from their employees refined or completely overhauled?
financial actions such as family through to customers and suppliers.
members making decisions to step back • Does our strategy account for the
into the business to help solve problems For many family businesses, an changing dynamics of the family?
that the company was encountering, unexpected and positive outcome of the
• Have we tapped into the
maintaining vital relationships with pandemic was the gift of time. With a
knowledge and insights of all
employees, customers, suppliers and slowdown in their business operations,
generations of family members?
communities, and contributing to the several family business leaders found
company’s longer-term plans. they had the time and agility to diversify, • How well is our ESG strategy
to explore ideas for new products, integrated with our business
new markets and extensions of their strategy? Does it support our family
businesses that had been simmering legacy and continue to build on it?
in the background for years. In fact,
As family businesses considered these widely dispersed among several Most have put their resilience to the test
questions in the COVID-19 environment, generations who aren’t typically as and emerged from the pandemic with a
their conclusions reflected three involved in the company’s operations. refreshed strategic direction and a long-
dominant strategic frameworks: term view for the future that is energizing
These two factors defined four types of the business as well as the family.
1. Social responsibility: addressing family business firms and to help bring
the impact of the pandemic on the them to life, we have illustrated them There are many lessons that can be
welfare of employees, society as in “personas” as family “Corporations”, learned from all of these experiences.
a whole and the needs of all their “Enterprises”, “Consortiums” and
Now is the time for every family
stakeholders, including customers, “Ventures”. Other characteristics, such
suppliers and local communities. as the age and size of the business and business to apply these learnings
the number of generations who are in evaluating their own actions
2. Business transformation: involved in it, have helped us to describe and to implement the changes
pivoting their businesses what makes each persona unique. that will be necessary to keep
reactively to address the impact
family businesses moving
of COVID-19 and proactively to The personas provide family business
ensure that new business models leaders with an opportunity to explore forward as the engine of
included transformational ESG the strategies and actions taken by family the global economy.
strategies and using resources businesses that have the same defining
responsibly, while also supporting factors and also share characteristics
the growth and adaptability of similar to theirs. It is one way to help
their business in a rapidly changing determine if now may be the time to
external environment. explore alternative strategic options for
achieving their own definition of success.
3. Exercising patience: leveraging
their patient capital to understand
the full impact of COVID-19 on their
Now is the time to look
business and others in their industry, forward … and to act
observing the immediate actions
For family businesses, the first
that many of their competitors were
response to COVID-19 was to protect
required to take. This may give family
the family business and the business
businesses a future competitive
family. The second step was to re-
advantage by being able to seize
evaluate and redesign their strategies in
opportunities that others in the
order to master a comeback. The third
industry may not have the foresight
step will be to triumph as a leader of the
or resources to capture.
global economic recovery.
Family business personas Looking back over the past few months,
there are family businesses that
There are several important factors recognized they didn’t have sufficient
that influence the strategies and contingency plans in place to deal with
specific actions that individual family a major, unexpected event. Others
businesses implement. However, two have realized that succession planning
key features have been identified that is becoming a more urgent priority to
are influencing their current strategic ensure the right leadership is being
roadmaps. The first is whether or prepared to pick up the reins and guide
not the CEO is a family or non-family a new strategic direction successfully.
member. In family businesses led
by a family member, for example, Many now see that younger generations
the family overall is generally more of the family have innovative ideas for
engaged in decision-making and in the the future of the business and they’re
development of long-term strategies. examining the mechanisms that need
to be in place to keep bringing fresh
The second factor is related to share ideas to the surface. Those with multiple
ownership. If the family’s shares are generations of the family involved in the
highly concentrated between a small business – in leadership or operating
number of family members, there is roles, as Board members or shareholders
typically greater family involvement – were 45 percent more likely to deploy
and influence on decisions versus a business transformation strategy
situations in which the shares are compared to single-generation firms.

Highlights from the Global family
business survey: COVID-19 edition
Number of respondents Size and percentage of
family businesses
Between 51 and More than
200 employees 200 employees
2,493 517 3,010 Between 21 and

50 employees
Family Non-family Total number 20 or less
businesses businesses of firms employees
Generations 36% 17% 21% 26%

% of family businesses
42%
First
generation
Nationalities
Respondents from 75 countries distributed in
five macro-regions: Europe; North America,
South America & the Caribbean; Asia Pacific; and
the Middle East & Africa.
Second
36% generation
55% Europe
Third Asia
14% generation 20% 9%
Pacific
16%
The
Americas1 Middle East
& Africa
Fourth or subsequent
8%
generations % of family firms
1
North America, South America and the Caribbean
6 Survey highlights
Revenue Government support
Revenue stayed Revenue 76%
the same decreased of firms globally accessed government support programs.
Of those:
Received government Acquired financial

subsidies support
22% 69%
Globally
9%
21%
43%
Revenue increased 36%
Made use of tax reduction and

TAX filing deferral opportunities
Employment Three primary strategies

Three primary strategies were adopted to address the
8.56% impact of COVID-19:
Reduction in the family business workforce globally,
compared to 10.24 percent in non-family businesses.
Social responsibility
42%
of family businesses
were more likely to
deploy a business
Business transformation transformation strategy
than non-family firms.
Exercising patience
20.07 % 4.31 % 3
Highest employment reduction Lowest employment

in the Middle East & Africa reduction in Europe
Actions taken by family businesses
41% 36% 14% 9%

Cut costs and reduced or Reduced the number of Made changes to their Reduced executive
deferred their investments employees, hours worked business by restructuring salaries or made
or pay or closing temporarily or adjustments to incentive
permanently compensation plans
The impact of
COVID-19 on family
businesses globally
I
n total, 3,010 business leaders that their revenues experienced an
completed the Global family business initial decline due to COVID-19.
survey: COVID-19 edition, with 2,493
from family businesses in the Americas, Twenty-two percent of family
Asia Pacific, Europe and the Middle businesses reported that their revenues
East & Africa and another 517 from remained the same, while 9 percent
non-family businesses, for comparison. reported that their revenues were
affected by a revenue boost in the
Since the survey was conducted during wake of the pandemic. This included
the early months of the pandemic, we businesses that did not benefit from an
believed that the first indicator of the increased demand in their products or
impact of COVID-19 on family and non- services due to lockdown measures.
family businesses would be reflected
in their revenue. Uncertainty in the These findings encouraged us to find
markets and the need for government out more about the companies who
restrictions on social interactions and have continued to thrive in such a highly
business operations in most areas of the uncertain environment and the actions
world did, in fact, have a striking impact that others are taking to sustain or
on companies’ revenues. Sixty-nine rebuild their businesses for the future.
percent of family businesses reported
Generations that are currently active in the business

87%
84% 77%
23%
13%
Europe Asia Pacific
87%
75%
16%
25%
13%
Global The Americas1 Middle East & Africa
One generation Multiple generations
1
Source: STEP Project Global Consortium and KPMG Private Enterprise Global family business report: COVID-19 edition

Three levels of resilience
Family businesses in the United Arab Finally, at a societal level, business
Emirates (UAE) have experienced the families have been an important
shock of an economic slowdown that and active economic contributor to
has lasted for several months and supporting government leadership
introduced high levels of uncertainty. and responding socially to the
needs of local communities.
Because of the embeddedness of family
firms in the UAE social and economic A crisis can provide one of the
environment, the commitment to best opportunities from which to
sustaining entrepreneurship across learn. I believe that the business
generations has triggered their resilient families that adapted their family and
instincts. This resilience has been business structures, implemented
transferred into strategic actions that entrepreneurial actions and engaged
companies have taken to embrace all of with their communities have further
their stakeholders during the pandemic. developed their resilient instincts and
reinforced the characteristic tenacity
First, at the organization level, some of transgenerational family firms.
business families have reacted by
incorporating a crisis cabinet to promote Rodrigo Basco
family and business resilience and Associate Professor
formulate recovery plans that care and Sheikh Saoud
for family and non-family members bin Khalid bin Khalid
Al-Qassimi Chair in Family
alike. Second, at the strategic level, Business, American
business families have implemented University of Sharjah
entrepreneurial actions to sustain
their business operations and
preserve their long-term economic,
social and emotional investments.
Sector and
The most significant regional
revenue increases were
reported in companies
impact
that benefited from
the acceleration of
W
e looked first at the initial
technology and the impact in different regions of
surge in e-commerce the world and across a variety
of sectors.
for many traditional
We found that revenue declines varied
retailers. widely among different industry sub-
sectors, some of which experienced
extremely sharp losses, while others
have managed to weather the storm
very well. Not surprisingly, the primary
sectors reporting revenue declines
were those that were affected
immediately by social and travel
restrictions. This included 88 percent
of hotels and restaurants, 83 percent
of education institutions, 71 percent
of those in the transportation sector
who saw a dramatic decrease due
to heightened travel restrictions
and another 71 percent in the arts,
entertainment and recreation sectors.
Manufacturing and construction felt

the impact as well. Seventy-one
percent of family-owned manufacturing
companies were confronted with
major supply chain issues that
disrupted their production and delivery
capabilities. Sixty-one percent in the
construction industry saw revenue
losses due to cancelled projects,
supply chain disruptions and staffing
modifications that were required to
protect the health and safety of on-site
workers.
The most significant revenue increases

were reported in companies that
benefited from the acceleration
of technology and the surge in
e-commerce for many traditional

retailers. With the pandemic causing Regionally, we found important
people to stay in their homes and differences as well, with 84 percent
putting visits to the doctor at risk, the of businesses in the Middle East and
telemedicine market was accelerated. Africa, for example, reporting that their
Other essential services that could be revenues had declined, compared to The sectors that were directly
supported by technology saw a boost in 69 percent globally. The strength and
their revenues as well, such as grocers resilience of the economic structure affected by social distancing
and pharmacies that migrated to online in countries and regions is important policies and travel restrictions,
ordering and home delivery. for family businesses. It appears that such as hotels and entertainment
the severity of the impact from the
The need for faster and better pandemic is related, in part, to the venues, were among the first to
communications technology for level of regional development and the experience a negative impact on
remote work environments and capacity of the economic system to their revenues, as well as those in
inter-personal communications led absorb the shock. It may be the case
many family businesses to accelerate that developed economies were better the restaurant industry who were
the digitalization of their business prepared to weather the storm. not able to adjust their operating
models, which fuelled the growth of model to accommodate food pick-
information technology developers The sectors that were directly affected
and service providers. by social distancing policies and up and delivery. On the other side
travel restrictions, such as hotels and of this issue, with more families
As a result, revenue increases entertainment venues, were among the working and staying at home,
were experienced in 21 percent of first to experience a negative impact
companies in the human health and on their revenues, as well as those in the preparation of family meals
social work sector, 13 percent in the restaurant industry who were not increased, and the agriculture
information and communications and able to adjust their operating model to and food processing industries
11 percent in agriculture, forestry, accommodate food pick-up and delivery.
fishing and in the wholesale and retail On the other side of this issue, with more saw an appreciable rise.
trade. Even 12.5 percent of those in the families working and staying at home,
arts and entertainment sector reported the preparation of family meals increased
revenue increases, even though and the agriculture and food processing Alfredo Valentino
the sector overall has experienced industries saw an appreciable rise. STEP Global Research
Champion
significant declines. Associate Professor
ESCE International
Business School
Top industries affected by COVID-19

Revenue declines Revenue increases
Hotels and restaurants
Education institutions
Human health and social work
Information and communication

84%
of Middle East

Arts, entertainment Agriculture, forestry and fishing
and recreation & African family
Wholesale and retail businesses experienced
Manufacturing a revenue decline
Selected arts, entertainment
Construction and recreation companies

Transportation
From impact to action
E
ighty-seven percent of family firms we identified several financial and non-
that participated in the survey are financial actions that families have taken
led by family CEOs, which often to stabilize their businesses during the
reflects a high level of family involvement initial shock caused by the pandemic. Their
in decision-making as well. The family’s decisions are also laying the foundation
involvement in the daily decisions of the for their companies’ longer-term growth
business is a unique characteristic of the prospects. In some cases, these decisions
family business model, especially during have led to a complete transformation
times of dramatic change and upheaval. of their business operating models and
The family can be a source of unique product offerings, often with the intent of
and inimitable resources and capabilities making them fit for purpose in the new
that lead to the resilience and agility digital age. In fact, family businesses
with which family businesses are often were 42 percent more likely to deploy a
identified.2 The shock of an unexpected business transformation strategy than
global pandemic provided an opportunity non-family firms.
to see firsthand if they really do have that
“special resilience” in their DNA. A high percentage of family members
throughout the world have not only been
The family’s involvement not only addresses involved in addressing the impact of
the economic goals of the business, it COVID-19 on their businesses, they have
also tackles family-oriented goals, such as also been looking out for the concerns of
sustaining the family legacy. We found that their communities. Most have relied on
this combination of family-oriented and family members to become involved inside
business-oriented goals has affected the the business to overcome the impact of
ways in which families have reacted and the pandemic. Others have also expanded
responded to the impact of COVID-19. their horizons beyond the family business
to make use of the family’s social capital to
From the survey responses, as well as open up collaborative opportunities with
direct experiences with family businesses, their external stakeholders.
The most implemented actions per macro-category

Asia Middle East
Global Europe Pacific The Americas1 & Africa
Moving all or Moving all or Freezing Moving all or Reducing

some employees some employees all hiring some employees employee pay
to remote status to remote status to remote status
Employees
Cutting office Cutting office Cutting office Cutting office Cutting office
expenses expenses expenses expenses expenses
Costs/Investments
Delaying payment Renegotiating Delaying payment Delaying payment Renegotiating

for all or part of vendor for all or part of for all or part of vendor
vendor bills and contracts vendor bills and vendor bills and contracts
loan obligations loan obligations loan obligations
Business
Deferring or Deferring or Deferring or Deferring or Deferring or

reducing reducing reducing reducing reducing
executive pay executive pay executive pay executive pay executive pay
Executives
1
2
Minichilli, A., Brogi, M., & Calabrò, A. (2016). Weathering the storm: Family ownership, governance and performance through the financial
and economic crisis. Corporate Governance: An International Review, 24(6), 552-568.

Family impact
Family members were called upon to help the family’s

business through moral, physical and intellectual
support in order to continue to serve their customers.
This created new opportunities for family members to
re-evaluate their relationship with their business. Some
recognized the next generation’s ability to take on the
business. Others gained interest in participating more in
the business or questioned the value of it continuing.
Albert James, Associate Professor of Family

Business and Entrepreneurship, Rowe School
of Business, Dalhousie University, Canada
During the pandemic, uncertainty promoted “what-

if” discussions and demanded critical reviews
of downside and upside scenarios for the future
of many family businesses. In some cases, this
included examining the family’s ownership structure.
Families-in-business can be agile in redesigning their
structure, such as privatizing a listed company to give
the family more flexibility to launch new initiatives.
Privatization can also assist in managing the family
assets as a portfolio, allowing them to exercise the
calmness that’s required to make sound business and
investment decisions in the midst of uncertainty.
Kevin Au, Professor at The Chinese

University of Hong Kong (SAR), China
COVID-19 has accelerated conversations within

families on governance to enable faster decision-
making and allow them to engage efficiently with
their family members and shareholders. Especially
among smaller family businesses, where governance
might have been seen as a tick-box approach in
the past, there is now a better understanding of
how good governance practices can help to reduce
risks and protect the business and the family.
Daniel Trimarchi, Director, Family Business

Global Network, KPMG Private Enterprise, Director,
Family Enterprise Advisory, KPMG in Canada
Challenges appeared from all fronts and family

businesses had to adjust. A simple example was
the impact of the mobility restrictions that were
introduced in Guatemala. All citizens over 60 years of
age were required to remain in their homes – and that
included most family business CEOs. Approximately
85 percent of all companies in Guatemala are family
businesses. With sales declining and employees
being furloughed, the heads of these businesses
were unable to be present in their companies
precisely when they were needed the most.
Jaly Chea, Associate Dean for Academics

Universidad Francisco Marroquin, Guatemala
Absorbing
the financial
shock of
COVID-19
B
ecause of the uniqueness of • Hiring freezes were implemented
family businesses and how the by 38 percent of family
family’s involvement translates businesses globally.
into a competitive advantage, it was
our intention to explore, analyze and In some cases, adjustments were
understand the actions that family also made in companies’ executive
businesses took in response to the compensation arrangements, with
pandemic. If there was an unexpected 29 percent of family businesses
shock, what did family and non-family globally reducing executive pay and
businesses do to absorb that shock? 19 percent considering alternative
forms of executive compensation.
Notably, executive compensation
Employee and changes were most prevalent among
executive actions survey respondents from large,
well-established businesses led by
Management reactions to mitigate the
non-family CEOs. Thirty-six percent
impact of COVID-19 on their businesses
of those companies in the survey
was seen primarily in changes in
deferred or reduced executive pay and
companies’ employment numbers.
29 percent have considered incentive
Globally, family business employment
compensation alternatives.
dropped by 8.56 percent from the start
of the pandemic to the completion of the It is important to highlight, however,
survey. By comparison, the employment that the employment changes in family
change for non-family businesses was businesses varied widely across the
10.24 percent. regions. For example, while employee
reductions in Europe were low at
• 46 percent of employees
around 4 percent, the employment
were moved to remote
change in the Middle East & Africa was
working status.
20 percent. Because the location of
• 40 percent reduced the family business appears to be the
employees’ hours. most important factor when it comes
to making employment reductions, it
• 32 percent put employees on is likely that the wide variations may
furlough and as many as 19 percent be related to each region’s economy
implemented employee layoffs. and the different employment law
protections in many countries.

How the COVID-19 pandemic affected revenues of businesses
17%
25%
8% Asia
Europe
22% Pacific
11% 64%
75%
9%
Global
13%
22%
3%
69% The Middle East

11% Americas1 & Africa
67%
84%
Revenue decreased Revenue increased Revenue stayed the same

1
Difference in the number of

employees in your business
today, compared to pre-COVID-19
Through the survey and experiences
with family business leaders worldwide, -8.56% Global
we discovered that the initial impact
of COVID-19 on family businesses
was primarily focused on overall
cost-cutting measures, including -4.31% Europe
reducing the companies’ employment

expenses and business actions, such
Asia Pacific
as renegotiating vendor contracts and -7.95%
payment arrangements with customers.
This supports the widely accepted view -12.00% The Americas1
that under severe threats to their business,

family firms need to rebalance their
Middle East & Africa
economic and non-economic goals, putting -20.07%
greater focus on the economic priorities

that will allow them to navigate successfully 1
through an uncertain path ahead. Source: STEP Project Global Consortium and KPMG Private
Enterprise Global family business report: COVID-19 edition
Andrea Calabrò
STEP Global Academic Director,
Director,
IPAG Entrepreneurship &
Family Business Center,
IPAG Business School
Cost cutting measures renegotiated their relationships with
suppliers, customers and financial
In addition to reducing employment institutions as the impact on their
costs, 41 percent of family revenues led to changes in their
businesses have also implemented economic and financial status.
While more than 80 percent of the
wide-ranging cost-cutting measures,
actions that were taken to overcome such as: • 30 percent renegotiated their
the impact of COVID-19 focused on the vendor contracts,
• 58 percent reduced their
companies’ employees, cost-cutting general office expenses, • approximately one-third
measures and reducing or deferring delayed vendor payments
• approximately half cut and loan repayments,
investments, 12 percent of family
marketing spending, and
businesses found it necessary to close • 24 percent postponed or
their businesses either permanently or • 32 percent reduced cancelled their R&D investments
their inventories to lower and product launches, and
temporarily. While such consequential carrying costs.
actions weren’t required in most family • 26 percent took on additional
Through the survey and experiences debt to finance their operations
businesses, other actions to support
with family business leaders to address revenue shortfalls
the business were necessary. worldwide, we discovered that the and to obtain the capital that
initial impact of COVID-19 on family was required to retool their
businesses was focused primarily manufacturing facilities, develop
Alfredo Valentino on overall cost-cutting measures, new products or implement
STEP Global Research including reducing the companies’ new technology solutions.
Champion, employment expenses, and business
Associate Professor,
ESCE International actions, such as renegotiating While more than 80 percent of
Business School vendor contracts and payment the actions that were taken to
arrangements with customers. overcome the impact of COVID-19
focused on the companies’
Business reactions employees, cost-cutting measures
and reducing or deferring
Beyond the immediate actions to investments, 12 percent of family
absorb the impact of COVID-19 by businesses found it necessary
reducing costs, businesses quickly to close their businesses either
reorganized their internal operations permanently or temporarily. While
to meet new levels of market such consequential actions weren’t
demand. In some cases, this led to required in most family businesses,
retooling their businesses for the other actions to support the
development of new high-demand business were necessary.
products. They also reinforced and

Mitigating future risks
On March 16, 2020, the shutdown day management returned to provide
began in Mexico. Though some had a oversight and share the actions
business continuity plan in place, many that had been successful in dealing
family businesses found themselves with large challenges in the past.
unprepared. Those who did have a plan
had a good starting point for tackling the The communication needs have now
situation. They had already documented expanded as well in relation to the
how they would interact with each issues that are being addressed by
other during a crisis and they triggered the family. Where a board meeting
the committees that were designed to may have been called once a quarter
deal with suppliers and customers. in the past, there are now bi-weekly
meetings to keep the family informed
For those companies that hadn’t planned and to make quick decisions that
for an unexpected event, however, work are important for the business.
had to begin in earnest on enterprise
assessments to identify the most Jesus Luna
significant risks to the businesses. National Private Enterprise
In many cases, this required the Leader,
shareholders and other family members KPMG in Mexico
to get involved in the business more
than they had in the past. Some older
generations who had left the day-to-
Accessing government • 76 percent of family firms globally
accessed government
support support programs. Of those who
Government support programs accessed government support
were introduced in many programs:
jurisdictions throughout the world and
76 percent of family businesses globally • 43 percent acquired
accessed some form of government financial support,
subsidies or other forms of financial
• 36 percent made use of tax
support. Approximately three-quarters
reduction and tax filing
of family and non-family businesses
deferral opportunities, and
made use of the government schemes
that were available in their countries. • only 21 percent received
Family businesses primarily made use government subsidies to
of financial support programs, such as supplement salary losses and
low-cost loan arrangements, and less expenses related to changes in
use of subsidies compared to non-family production capabilities or the
businesses. resources required to enable a
remote workforce.

Regional support
from government
In September of 2020, a €100 billion recovery plan

was introduced in France to sustain competitiveness,
cohesion and the advancement of the green economy
by targeting the development of green infrastructure
and technologies such as hydrogen, biofuels and
recycling.
Miruna Radu-Lefebvre, Full Professor of

Entrepreneurship, Head of the Chair Family
Entrepreneurship and Society Audencia Business
School, France
The UAE government’s Virtual Labor Market assists

companies and employees affected by COVID-19-
related precautionary measures. If it is necessary for a
company to release workers, the online marketplace
supports recruitment by other UAE-based companies,
per market needs. The goal is to keep as many people
as possible employed.
Anurag Bajpai, Lower Gulf Leader, KPMG Private

Enterprise, KPMG in the Lower Gulf
The impetus for change has been boosted with

the European Union’s recent announcement of a
€672.5 billion “Recovery and Resilience” facility to
begin healing the economic scars of the coronavirus
outbreak. Where early support programs were short-
term actions and subsidies, this new fund has a longer
6-year timeframe to encourage longer-term thinking.
This should give business families the opportunity to
examine their current business focus and consider
what kind of market they want to have for the future.
Miguel Angel Faura Borruey, National Private

Enterprise Leader, Partner, KPMG in Spain
Some sectors have faced more challenges than

76 percent of family others, including not-for-profits. While many for-
profit businesses were supported through partial
businesses globally openings, government stimulus programs and payroll
accessed some form of protection arrangements, many non-profits have not
been able to open and have more limited government
government subsidies stimulus programs. As community-attentive as family
members and family offices are, many focused
or other forms of their philanthropic priorities on pandemic relief
financial support. projects versus traditional non-profits. Therefore, it
will be interesting to see how government stimulus
programs in the future might be structured to
support the recovery of both the for-profit and, just as
important, the non-profit sectors.
Brad Sprong, National Tax Leader, KPMG Private

Enterprise, KPMG in the US
Putting
purpose and
values to work
I
n responding to the impact of was needed from the family. It was
COVID-19, many family members important for the family to re-engage,
have played critical roles as owners especially in those situations in which
of the business to safeguard their management has been entrusted to
financial and emotional investment and non-family executives. In some cases,
to preserve the legacy that has been senior family members have come back
built over multiple generations. into the business to bring a historical
context, while also ensuring that the
In some cases, their response to family purpose and values remain intact.
COVID-19 was to become more
deeply involved in community support Because of their knowledge and
programs and making contributions to exposure to many new technologies,
social causes. Some made use of their younger generations of the family
business expertise and resources to are increasingly being tasked with
manufacture high-demand products, identifying digital solutions to transform
such as hand sanitizers and face masks. the family’s business operations or
Others used the temporary downtime helping to develop new technology
in their businesses to retool and prepare products or service offerings that can
for the reopening of their business and accelerate the business into the future.
its eventual comeback in the market.
In most family businesses, candid and
frequent communications within the
Family involvement family have increased substantially in
and response order to ensure that the family is well-
informed about the performance of
When many family businesses started the business and is able to make quick
to grasp what the pandemic might decisions based on good information.
mean for their companies, they realized Several family business leaders
that more involvement and input

Reinforcing vital commitments
Several Colombian family businesses that more than 5,000 people depend
have shown how the values of security, on them, and the family recognizes
benevolence and universalism have that this is their responsibility.
enhanced their resilience as seen
in their decisions and commitment One board member of a Colombian
towards their employees and clients. family business described his family’s
commitment this way: “This family
In responding to the impact of COVID-19, has a concept of the family as a
many founders of Colombian family clan, with a very profound sense
businesses focused on the continuity of of unity and cohesion. The family is
their business as a duty to ensure that unified in their support for each other
the families who depend on the business through good times and bad.”
could continue to thrive. They reinforced
their existing employee policies, paid Luis Díaz-Matajira
salaries on time and provided bonuses to Assistant Professor,
essential workers. In a firm that has over Universidad de los Andes
700 employees, for example, it means
pointed out that the frequency of customers, suppliers and other
communication has also increased external stakeholders to diagnose
dramatically, particularly in the underlying problems, develop
first few months of the pandemic, solutions for the business and also
with weekly or bi-weekly update address broader social concerns.
There continues to be a need for an
meetings with family members in
appropriate level of family involvement place of the regular family board Different organizational responses
in family businesses. This is often the meetings that had been held every to COVID-19 were reported
2 to 3 months. across the regions. In Asia, the
case when the business is managed Middle East and Africa, family
by a non-family CEO and the distance There continues to be a need businesses reported that they
between the family and the business for an appropriate level of family worked collaboratively with external
involvement in family businesses. stakeholders (industry and sector
has been widening over time. There This is often the case when the groups, suppliers and customers)
have been many examples in the past business is managed by a non-family to deal with the pandemic, while
several months where the family came CEO and the distance between the in North America, there was more
family and the business has been emphasis on sharing information
“back into the business” to come to widening over time. There have openly and frequently with all of
an agreement on highly consequential been many examples in the past their companies’ stakeholders.
decisions, such as whether or not several months where the family
came “back into the business” to It is interesting to see different
regular dividend payments should come to an agreement on highly organizational responses to
be issued, or if the time has come to consequential decisions, such as COVID-19 across macro-regions.
whether or not regular dividend In Asia and the Middle East & Africa,
appoint a new CEO with a different
payments should be issued, or if family businesses have relied
skill set to meet the challenges ahead. the time has come to appoint a new more on external stakeholders as
The involvement of several generations CEO with a different skill set to meet collaborators in addressing the
the challenges ahead. impact of the pandemic, while in
of family members contributed directly
Europe and the Americas, family
to their firms’ ability to accelerate the businesses have placed more
Managing stakeholder reliance on empowering family
transformation of their businesses.
relationships members and employees to make
decisions and take action.
Family members are also
Tom McGinness collaborating with other business
Global Leader, leaders in their communities,
Family Business,
KPMG Private Enterprise,
Partner,
KPMG in the UK

Mobilizing employees
Small- and medium-sized family For the longer term, they uncovered
businesses in India were particularly opportunities that had not been
hard-hit by COVID-19 as they faced two considered in the past to digitize their
major challenges: making sure that operations and adopt new technologies.
they could continue to pay employees,
while also carefully managing their They acted decisively. They invested in
ongoing costs. However, many family people and earned the loyalty of their
business leaders also recognized that employees. And they made smart
a slowdown in their business opened strategic choices without panicking.
up a new opportunity: the time and They have survived and the owners and
perspective for taking stock, reviewing employees alike are looking to come out
their operations and developing a fresh of the slowdown with renewed vigor
vision of their business for the future. and a refreshed vision of the future.
As key stakeholders in the business, the Dr. Nupur Pavan Bang

owners and their employees worked Associate Director,
together to brainstorm new ways to Thomas Schmidheiny
make the operations more effective and Centre for Family
Enterprise,
efficient. By doing this together, they Indian School
were able to move swiftly to adapt to the of Business
unpredictable conditions that arose daily.
Three key
strategies:
Preparing
for a
comeback
F
amily businesses have identified three
core strategies to respond to the
impact that COVID-19 has had on their
business and family legacies:
1. Social responsibility: addressing the

impact of the pandemic on the welfare
of society as a whole and the needs
of all their stakeholders including
employees, customers, suppliers and
local communities.
2. Business transformation: pivoting

their businesses reactively to address
the immediate impact of COVID-19,
and proactively to ensure, that new
business models are using resources
responsibly, while also supporting
the growth and adaptability of
their business in a rapidly changing
external environment.
3. Exercising patience: leveraging

their patient capital to understand
the full impact of COVID-19 on
their businesses and others in their
industry, and observing the immediate
actions that many of their competitors
were required to take.
We found it interesting to observe that

in the Middle East and Africa, family
businesses appeared to be more
risk averse, with many preferring to
remain patient until they had a better
understanding of the situation in order
to make a strategic decision.

Families’ multi-generational impact
45%
Family businesses that have several
generations of the family involved in the
business – in leadership or operating roles,
as Board members or shareholders –
more likely to were 45 percent more likely to deploy
deploy a business a business transformation strategy
compared to single-generation firms.
transformation
strategy
We saw a completely different pattern in

some parts of the Americas, where family
firms were more proactive in transforming
their business or adopting a social
responsibility strategy where they could
contribute the family’s financial and human
resources to support local organizations and
pandemic-relief programs. In Asia, all three
strategies appeared to be equally important.
Strategic acceleration
In some instances, a single strategic In many cases, I don’t believe that acceleration in considering external
approach has dominated throughout the pandemic has changed family CEOs because of the need for
the months of the pandemic. For business strategies as much as it a different skill set and range of
has accelerated the implementation experience in the next 20 years
the majority of firms, however, more of some strategies or amplified the compared to the previous 20.
than one strategy has been followed family’s position on changes that
as the months have progressed and they were already considering. If the With more companies looking at
company was performing poorly, the technology infrastructure of
its impact on their businesses has COVID-19 has made it worse. their firms and the acceleration
changed. In many of those cases, all If the family was thinking about of the new digital economy,
three strategies – corporate social changing the CEO and potentially encouraging greater involvement
bringing in a new leader from of younger generation family
responsibility (CSR), pivoting and outside the family, that discussion members may be one of the most
waiting – have been embraced as and decision is being accelerated. important short-term actions
the circumstances of the business family businesses can take.
One of the outcomes of
have continued to change. COVID-19 that I have seen in Dr. Knut Tonne
family businesses is an increase Partner,
in discussions about succession KPMG Private Enterprise,
Andrea Calabrò as well as the involvement of KPMG in Germany
STEP Global younger generations in the family
Academic Director,
Director, business in general. I also see an
IPAG Entrepreneurship &
Family Business Center,
Strategy 1:
The first of the strategic approaches is

focused outside the family business itself
with an emphasis on the business family’s
focus on the welfare of society as a whole,
and the needs of all their stakeholders
including employees, customers, suppliers
and local communities. Family businesses
are typically deeply embedded in their
environmental, cultural and community
initiatives. This strategy reflects the
family’s values and the important goal of
maintaining their reputation as responsible
owners in the communities where they live
and conduct business, and upholding their
societal and environmental responsibilities.
Families made substantial contributions

to community relief programs when the
initial impact of the pandemic was most
shocking and government financial relief
and other programs were not yet in place.
Many of the larger, long-established
family businesses used the slowdowns
in their businesses to become involved in
community projects and some contributed
to special funds, such as those that were
established to support other private
businesses to help ensure that these
smaller firms were able to weather the
pandemic’s financial storm.
With their long-term orientation and

focus on sustaining the family legacy,
along with their belief that all of the
stakeholders around them are important,
business families have made strides in
addressing the concerns and needs of their
employees, customers and suppliers (even
the smallest suppliers) showing a superior
ability to contribute their social capital
when it is needed the most. In particular,
some family businesses have highlighted
the importance of every supplier and
many prioritized making payments to their
smallest suppliers to ensure that they could
remain viable. As they look towards the
future, they are also beginning to develop
more challenging ESG goals, aligned with
a renewed ambition to transform their
business strategies.

Navigating a legacy during the storm
of a pandemic
“We are in this together”, is a mantra The common thread that resonates
commonly used across the world as across these stories is the creation of a
societies seek to respond to the greatest legacy. As a leader of a prominent Irish
public health crisis in more than a family business commented, “Our family
century. In Ireland, a country dominated business is in its seventh generation.
by family businesses and family farms, During the Great Famine (Ireland) of 1845,
the call for action was duly answered. our business took on a role very similar
to that of the Red Cross, distributing
We have witnessed alcohol manufacturers food to the sick and needy. We have
who pivoted their businesses to produce been through world wars, civil war and
hand sanitizing products; engineering firms times of immense economic hardship.
that began producing medical ventilators; The learnings from these experiences
technology providers delivering free reflect the values we hold as a family,
mobile phones to vulnerable members and I want my children to remember me
of society; comedy clubs hosting and my team for what we did for our
virtual events for struggling charitable communities during a time of need”.
organizations; and airlines offering
fleets for humanitarian missions. Eric Clinton
Associate Professor of
Entrepreneurship,
Director DCU National
Centre for Family Business
Strategy 2:
Business transformation
While continuing to sustain the family’s firm’s ESG goals, which is recognized as
purpose, values and community a particularly high priority among next-
commitments they began turning their generation family members.
attention to new strategies for pivoting
their business by reacting initially to the Many family businesses were quick to
impact on their business (especially with adopt new technology processes that
regard to the impact on their revenue) completely transformed the efficiency of
in order to survive, followed by a their operations. Others have tapped into
proactive pivot to create new approaches their family’s entrepreneurial mindset to
for adapting and transforming their diversify their businesses by creating a new
businesses in order to thrive in the future. catalog of digital products and technology
services that opened up entirely new
Business transformation is the second markets that weren’t even imagined a few
observed strategic response from family months earlier.
businesses. It embraces the concept of
pivoting and the importance of encouraging
a transgenerational entrepreneurship
mindset so that the business can be
passed successfully from one generation to
another. Actions such as streamlining their
operations and implementing new financial One forward-looking outcome of
measures, and creating new products, the pandemic is the stimulus that it
exploring new markets or adopting new
technology solutions were taken to has created for family businesses to
transform their businesses. These may understand the value of advanced digital
have been changes that the business had technology for their operations and
contemplated in the past, but in responding
to the impact of COVID-19, the family may their growth. Many are now seeing the
have determined that the time to pivot was potential for utilizing managed services,
right in front of them. for example, to make their operations
In some cases, a slowdown in the more efficient and trim expenses.
company’s regular operations or the
pressing need to find new sources of As a new business opportunity,
revenue has provided a window that the appetite for digital technology
was needed to open for the business applications has advanced
to explore new ideas. Family members
from multiple generations spent quickly. Many family businesses
more time together due to necessary are already well underway with
lockdowns which helped them nurture the introduction of innovative
the transgenerational entrepreneurial
mindset that is the fuel for innovation. technologies to meet the needs of
Putting the knowledge and skills of entirely new market segments that
several generations to work made them are only beginning to emerge.
45 percent more likely to accelerate
opportunities to develop and implement
well-planned new ideas as part of the Jonathan Lavender
immediate recovery plan and for the Global Head,
company’s future growth prospects. KPMG Private Enterprise,
This included, strengthening their Partner,
commitment to, and expansion of, their KPMG in Israel

Diversifying the business
and family assets
I have observed that family businesses
are beginning to transform their
businesses for what lies ahead. The
focus that I see right now is one of
diversification – not away from the core
business, but into new areas that are
no longer dependent on one or two
sectors or income streams. They are
exploring a wider range of markets
and making sure that their products
are relevant in the new reality.
Families have also recognized that

they need to diversify their wealth
while sustaining and growing the
family business. I have seen several
situations in which the family has made
the decision not to pay dividends in
order to retain their employees’ jobs.
However, many of those same family
members have now realized that they
rely on those dividends and that they
also need to diversify their wealth in
case an unexpected event arises again.
With the family’s wealth residing in one

family business basket, they recognize
that they need to consider investing
a portion of their money offshore or
in alternative investments or in new
businesses. The voices of younger
generations are playing a larger role
in identifying issues such as this and
recommending solutions with far more
open discussions and views than might
have been encouraged in the past.
Alan Barr
National Private
Enterprise Leader,
Partner,
KPMG in South Africa
Strategy 3:
Exercising patience
3
The third strategy is one in which family same industry that don’t have the family’s
businesses have not taken immediate unique set of resources, which may give
action to address the impact of COVID-19. family businesses a future competitive
advantage in their industry.
This strategy was common in very large
family businesses that have the financial There is an interesting aspect to this
resources to withstand major changes strategy among family businesses that
and challenges to their operations in the were particularly concerned about retaining
short term. We saw from the survey that and taking care of their employees. In
a patient approach was taken at various many of these companies, for example,
stages in the pandemic life cycle as family a decision was made to defer dividend
businesses assessed the longer-term payments for up to 12 months in order to
impact of COVID-19 and were able to take retain the capital for their workforce. This
the time to project a realistic outlook for has generated tremendous goodwill among
the future. They have been able to leverage employees who recognized the level of
their patient capital to observe the impact concern and care that the shareholders
and actions of other companies in the have for their employees’ welfare.
The need for speed

In my experience, the level of concentration through a lot of evaluation to determine
of family ownership has a great deal of if their decisions achieve the family’s
influence on the strategies and actions purpose. The more dispersed the family
that are taken in the business. ownership, the more time it takes for
thorough communications and open
In a listed company, for example, even if discussions before decisions can be made.
the CEO is a family member, he or she As a result, the speedy decision-making
still has to take compliance matters into that family businesses are generally
account and follow prescribed procedures known for may be lost in the process.
for making decisions on behalf of both
the family and non-family shareholders Karmen Yeung
before taking a particular action. National Private
Enterprise Leader,
For family business, whether the CEO is Partner,
KPMG China
a family or non-family executive is less
important. What matters in these cases
is whether or not the family has to go

Preferred regional strategies
We found interesting regional differences Many family businesses employed different

in the choice of one or more of these three strategies as the duration of the pandemic
strategies. In the Middle East & Africa, for progressed. We found, however, that
example, we observed that some family some strategies were preferred more than
firms appeared to be more risk-averse, others in different parts of the world.
preferring to “exercise patience” and develop
a better understanding of the situation
before making other strategic decisions.
We saw a very different pattern in Europe

and the Americas, however, where Europe Asia Pacific
family firms took steps to transform their
businesses or implement a comprehensive 34.3% 30.8% 28.4% 36.6% 33.9% 38.5%
social responsibility strategy (or both).
We did not identify a clear pattern among
family firms in Asia where the three
strategies were adopted relatively equally.
The Americas1 Middle East & Africa

38.6% 40.8% 27.6% 25.9% 31.7% 57.0%
Key legend
Business transformation
Exercising patience
1
Making the
strategy choice:
Two key factors
W
e observed a pattern in the the family to direct strategic decision-
strategies that were chosen making while also controlling the assets
among family businesses of the business.
that reflected two key factors:
the leadership and the ownership While the family/non-family CEO
composition of the company. factor and the concentration of family
ownership factors are key, we found
“Is the business led by a family other common characteristics among
member or a non-family CEO?” family businesses (such as the size and
age of the business and the number
“Are the company’s shares highly of family generations who are actively
concentrated among a small number engaged in it) that have also had some
of shareholders or are they widely influence on their strategic choices and
dispersed among multiple family (and actions during the pandemic.
potentially non-family) members?”
When we combined the family/non-
From a global perspective, family family CEO and family ownership
ownership was high among the survey dimensions, we were able to cluster
respondents. On average, more than 90 family businesses into four groups that
percent of their companies’ shares are share other common characteristics. We
owned by the family, keeping control have described these four groups as four
of the business firmly in family hands. family business personas that we have
In addition to the family ownership, named the “Family Corporation”, “Family
companies led by a family CEO are Enterprise”, “Family Consortium” and
exercising the additional authority of “Family Venture”.
Two key factors emerged

among the chosen family
businesses: leadership and
ownership composition.
32 Making the strategy choice: Two key factors

Four family business personas
1 Family Corporation 2 Family Consortium
4
• Non-family CEO • Family CEO
• Dispersed family ownership • Dispersed family ownership
• Multiple generations involved • Multiple generations involved

Four family
in the business in the business
business personas
• Among the oldest and • Older, small and
largest firms medium-sized firms
3 Family Enterprise 4 Family Venture

• Non-family CEO • Family CEO
• Concentrated family ownership • Concentrated family ownership
• A single generation involved in • A single generation involved in

the business the business
• Young, small firms • Among the youngest and

smallest firms
When we looked, for example, at believed that it would be helpful to bring

businesses led by a family CEO, we saw each of the family business personas to
a distinct pattern: the higher the family’s life by creating fictional and illustrative
involvement in the business, whether examples of how family firms might have
that was in leadership, managerial or reacted to COVID-19 based, based on
ownership roles (or a combination of all their family and business characteristics.
three), the more likely it was that their
initial response to the pandemic was to
focus their attention on the welfare of Bringing the personas to life
their employees and the communities While the following stories of family
where the family lives and operates. businesses are purely fictional, their
experiences and the actions they have
The lower the family’s overall
taken are based on the data we collected
involvement, the greater the likelihood
in the Global family business survey:
that the leader of the business
COVID-19 edition and the practical
(whether that was a family or non-
insights and experiences that have been
family CEO) would make the difficult
shared openly by family business leaders
business decisions that might be
across the globe.
necessary regarding the company’s
employees, overall cost reductions
We are pleased to be able to bring
and the potential restructuring of the
real-life experiences into these
business itself.
illustrative stories as a way to show,
by example, the unique features of a
Naturally, there are many subtle
family business like your own, and how
differences and “gray areas” between
their characteristics may influence the
those two examples. And so, we
decisions and actions they take.
The Family Corporation
Common characteristics of In addition to being among the most
well-established family businesses, the
the Family Corporation other characteristics they share include
Family businesses included in this the following:
persona are generally among the oldest
and largest companies that contributed
to the survey, having been in operation
for an average of 58 years.
CEO The Family Corporation
Characteristics
The company is led by a non-f
The company’s shares are wid
multiple family members.
Multiple generations of the fam
the business.
Many of these companies hav
Employees
> 200
The Family Corporation

Characteristics
The company is led by a non-family CEO.
The
The Family Enterprise
company’s shares are widely dispersed among
Characteristics
Multiple generations of the family are directly involved in
the business.
Many of these companies have more than 200 employees.
The company’s shares are highly concentrated among a
small number of family members.
These are primarily first- or second-generation firms.
Only one generation of the family is involved in
the business. CEO
Employees
Approximately one-half of these companies have fewer ~ < 50
than have 50 employees.
The Family Consortium

Employees
~ < 50
Characteristics
The company is led by a fam
34 Making the strategy choice: Two key factors Ownership is widely dispers
The Family Consortium and multiple generations.
Primary COVID-19 response A key consideration: How to
strategy: Social responsibility protect the business and the
A social responsibility strategy was the family’s legacy
most widely adopted response to the As with many businesses in the retail
impact of COVID-19 among businesses sector, the family business example
in Family Corporations. Considering that described in this persona had a sharp
the companies in this group are older and revenue shock due to COVID-19.
larger than firms in the other personas,
we can infer that they were more stable The non-family CEO took immediate
economically and better prepared action to reduce costs and cushion the
financially to support an external shock. fall in the company’s revenue. Similar
Sustaining the family’s reputation, to many of the firms in the survey that
legacy and social commitments is a reported a reduction in executive salaries,
priority for these families, and they used an alternative incentive compensation
their resources to support their local arrangement is being considered by the
communities and their ESG objectives. family. They have also made major cuts
to their spending and inventories and
The story of a renegotiated several vendor contracts.
Family Corporation While expense reductions were an

To illustrate the “Family Corporation”, we immediate reaction to the impact of
have created a story of a third-generation COVID-19 on their business results, the
family business in Asia that has been family’s purpose and values are well-
operating in the wholesale and retail entrenched and the family members
sectors for more than 67 years. Today, the are committing their time and financial
company has more than 300 employees. resources to support local community
programs, such as food banks and
Three generations of the family are donations of face masks and sanitizers
involved in the business, including a to small retailers.
member of the founding generation who
represents the shareholders’ interests Because the company is well-established,
and three members of the second we can infer that the family has adopted
generation who oversee the strategic this community support strategy because
direction and are directly involved in the their business has more organizational
company’s retail operations, logistics and economic stability to sustain it over
and sales. Two third-generation family the long term compared to firms that are
members are in the process of learning smaller and younger. Consequently, they
the business by gaining experience in are better equipped to absorb the external
several departments of both the retail shock of COVID-19. They are able to use
and wholesale operations. their resources to integrate their ESG
strategy with the family’s values through
The second generation family members a board governance framework that
are responsible for the strategic direction provides oversight on the company’s core
of the business. However, the third- business activities and their impact on a
generation family members are rapidly broad range of stakeholders, including
gaining experience in the business and customers, employees, suppliers and
their contributions became increasingly their communities.
important in identifying the actions
that needed to be taken in response to
COVID-19.
Sustaining and protecting
the business
I have been inspired by the behavior as they share a common focus to
of families in business throughout the protect their business and their legacy.
pandemic. From the beginning, they
have behaved in a way that we have Discussions about succession have
come to expect. They understand that been amplified as well. It was a shock
there is an urgent need to protect their to some older generation family leaders
business and their legacy. In many of who realized that they didn’t have a
my discussions with family business plan for the skills that were required
leaders, I have learned that the family to respond quickly to an unanticipated
has chosen to leave more money in the event. As a result, I have seen an increase
business than they would have under in the delegation of responsibilities to
normal circumstances. That includes younger family members, and although
making the decision not to pay dividends that may be helping to make them
in order preserve as much of their capital better-prepared to take on further roles
as possible to sustain the business. in the business, the risk of delegating
poorly or to the wrong person due to
As far as family relationships are haste, should not be neglected.
concerned, COVID-19 has been an
amplifier. If relationships were bad, Vangelis Apostolakis
they became worse. But if they were Deputy Senior Partner,
good, they’ve become even better and Head of KPMG
more constructive, and we are seeing Private Enterprise,
KPMG in Greece
many families coming closer together

As in other large, well-established firms
with many generations of the family
closely linked to the business, the
family’s values and business purpose Key success factors for the
are closely intertwined. Maintaining
the family’s legacy and reputation is Family Corporation:
a priority. While reducing expenses
was an immediate action taken by
the non-family CEO to protect the maintaining a commitment to the
family’s investment, the family itself
community to reflect the family’s values
has focused most of its attention on its
community impact commitments, with and sustain its legacy
the exception of the second-generation
member of the family who is responsible
for sorting through the supply-chain adjusting executive compensation
logistics resulting from the pandemic. arrangements as well as general
cost-cutting measures
These two strategic choices between
business actions and community actions
are often consistent in businesses in respectfully managing relationships with
which the family is less involved in the suppliers and customers
day-to-day the operations of the firm, but
the family name and reputation remain
paramount. It was important, therefore, ensuring an open and accessible flow of
for the family in this example to take information with all stakeholders.
action to leverage the family legacy while
not becoming directly involved in the
immediate operational decisions made
by the CEO or his actions with suppliers,
customers and industry groups.
The family considers those activities
to be the responsibility of the CEO.
Maintaining the brand, reputation and
legacy of the family name and the family
business are the family’s primary focus.
Changes within the organization have

followed the firm’s social responsibility
strategy. As one of the largest and oldest
family firms, in this Family Corporation
example, the company is already
managed in a highly professional way, as
is found in most non-family corporations.
Sharing knowledge and information
is vitally important to the firm, and the
non-family CEO plays an important role
in participating in industry and sector
groups to address the COVID-19 situation
and manage external relationships with
suppliers and customers.
In any complex corporation, candid and

frequent communication with external
stakeholders is critical. It is equally
important in family businesses, where
the family shareholders need to be kept
well-informed of the steps that are being
taken to preserve their investment.
The Family
Corporation
The company’s
Characteristics shares are highly concentrated among a
These
The are
company’s The Family Consortium
primarily first-
shares or second-generation
are widely
dispersed among firms.
the business.
Common
the characteristics of
business. large firms in the “Family Corporation”
persona. As such, they have a relatively Employees
Approximately
the Family
Many one-half
companiesof
Consortium
of these havethese
more companies
than have fewer
200 employees.
small number of employees. ~ < 50
Family businesses included in this
persona were among the older family The characteristics shared by companies
businesses in the survey, however, they represented in the Family Consortium
are represented primarily by small- to persona include:
medium-sized firms, unlike the very
CEO
Characteristics
The company is led by a family CEO
Ownership is widely dispersed acro
and multiple generations.
Employees
Two or more generations of the fam
~ < 50 in the business.
The average age of the business is 4
Employees
< 50 It includes small to medium-sized bu
with approximately 45 percent emp
The Family Consortium than 50 employees.
CEO
Characteristics
The company is led by a family CEO.
The Family Venture

Ownership is widely dispersed across the family
Two or more generations of the family are involved
Characteristics
in the business.
yees
The company
The averageisage
led
of by
the abusiness
familyisCEO.
46 years.
0 It includes small to medium-sized businesses
with approximately 45 percent employing fewer
smallthan
number of family members.
50 employees.
These are typically first-generation businesses that are
less than 30 years old.
the business. Employees
There are less than 50 employees. < 50
CEO
Employees
< 50
CEO
Primary COVID-19 measures and by delaying a planned
investment in a small company that
response strategies: supplies material used in the production
Social responsibility, of automobile airbags. There has been
business transformation less attention, compared to other
business personas, on business actions
Companies included in the Family such as closing the business. The family
Consortium have made community is committed to keeping its employees
support a priority, similar to the firms actively employed.
represented in the Family Corporation,
in which the longevity of the business Across the decades, the family members
and the family’s legacy are important. in this Family Consortium example have
However, in the case of Family developed important skills to respond to
Consortiums, they were more likely to a wide range of business challenges. The
also adopt a business transformation family members are creative, adaptive and
strategy, which may reflect their added have learned how to apply the knowledge
agility due to their relatively smaller size. they have gained in one area of the
business to new opportunities.
The story of a They have adopted a combined
Family Consortium social responsibility and business
transformation strategy to use their
Our fictional Family Consortium is a
available resources to protect the family’s
45-year-old, third-generation firm in
reputation in the community, while also
Germany that manufactures component
pivoting their business. To help keep
parts for the transportation industry.
employees engaged, the company
The company has approximately 120
has organized a “volunteer bank” for
employees and the business is led by a
family members and employees to
family CEO.
contribute their time and experience
to support community fundraising
As a family consortium, three generations
programs and participate in a volunteer-
of the family are involved in the business,
led transportation service that assists
including four second-generation family
vulnerable members of the community
members who manage the day-to-day
who require transport to medical
operations alongside the first-generation
appointments and essential errands.
founder who continues to be involved
by providing oversight on behalf of the
At the same time, family members
shareholders. Most recently, four young
have worked diligently to find solutions
members of the third generation have
to soften the financial impact on the
entered the business in production roles
business caused by a slowdown in
in the company’s manufacturing plant.
the production requirements of its
regular customers. The family CEO
The strategic direction of the business is
established a small task team that
the shared responsibility of the founding
includes the first-generation founder
CEO and the family board, with the
to represent all the shareholders’
second and third generations having
interests, the company’s production
operational responsibilities and roles.
manager, and two third-generation
family members. The team’s objective
Perfecting the art of the pivot was to explore several options to build
on the company’s existing strengths
With the family’s extensive and direct and to transform that experience and
involvement in the business, family expertise into an innovative business
members from all three generations have solution while continuing to uphold
been actively involved in implementing the firm’s environmental and social
solutions to address the impact of welfare commitments.
COVID-19 through some cost-cutting
While similar companies in the auto parts
sector were changing their business
models to manufacture personal
protective equipment for healthcare Key success factors for the
workers, the Family Consortium in this
example recognized that its engineering Family Consortium:
expertise would be best applied to
alternative transport devices. This
choice would also simplify any retooling using the family’s available resources to
requirements that might be necessary.
sustain the family legacy and the business
The decision was made to revamp a
section of the company’s production
facility to manufacture parts for the new
taking non-financial and financial actions to
high-demand patient transfer devices
between hospitals and other healthcare mitigate the impact of the pandemic
facilities. The company applied for and
received a government subsidy to retool a
section of the plant for this purpose. a high level of involvement of family
members in developing solutions to counter
By pivoting their business in this way, the the impact of the pandemic
family was able to remain focused on its
core strengths and capabilities while also
transforming a segment of the business the family’s creativity, adaptability and skill
for an emerging new market. What was in responding to challenges
an initial revenue shock has ultimately
resulted in a positive improvement
in the company’s short-term revenue ability of the family to apply their knowledge
outlook due to its ability to transform the in one area of the business to opportunities
business quickly.
that arise in others
We believe that a combined
social responsibility and business
strong leadership from senior management,
transformation strategy, as illustrated
in this example, is influenced directly including the family CEO.
by the number of family members who
are participating in the business as
shareholders, operators and stewards
of the family’s reputation and ESG
commitments. Essentially, when there is
a crisis, all family members are prepared
to help to protect the business assets as
well as those of the family, including its
reputation in the community. Having a
family CEO also encourages high family
involvement in the firm with a family that
is deeply embedded in the business and
is encouraged to actively contribute to
important decision-making.
The company’s shares are widely dispersed among
The Family Enterprise
the business.
Common characteristics of non-family CEO, which might suggest
that the complexity of the business
the Family Enterprise requires external experience and
Family businesses included in this expertise in the top management team.
persona are relatively small, young
firms. As such, they also generally The characteristics shared by family
employ a small number of employees. businesses of this type include:
Interestingly, however, they are led by a
CEO TheCEO
Family Corporation
Characteristics
The company’s shares are widely dispersed among
a
the business.
Employees
> 200
Employees
~ < 50
The Family Enterprise CEO
Characteristics
The Family
The company’s Consortium
shares are highly concentrated among a
Characteristics
the business.
Employees
Approximately one-half of these companies have fewer
Ownership is widely dispersed across
the family
~ < 50
in the business.
The average age of the business is 46 years. The Family Consortium
loyees
50 It includes small to medium-sized businessesCharacteristics
with approximately 45 percent employing fewer The company is led by a family CEO.
than 50 employees. Ownership is widely dispersed across the family
in the business.
The average age of the business is 46 years.
Employees
< 50 It includes small to medium-sized businesses
than 50 employees.
CEO
a 42 Making the strategy choice: Two key factors
The Family Venture
Primary COVID-19 with the development and introduction
of new technology solutions to support
response strategies: the pivoting strategies of restaurants
Social responsibility, and small retailers in their own efforts to
business transformation, respond to the pandemic.
exercising patience It is worth noting that this business does
A dominant strategy is not apparent not have only one strategy to respond to
in the Family Enterprise persona. All COVID-19. In fact, elements of a social
three strategies were adopted equally. responsibility, business transformation
We believe this reflects some of the and exercising patience strategies are all
challenges in governing and managing being applied in various ways. The primary
family businesses that have a non-family owner has, for example, developed new
CEO and a small number of family technology solutions to assist community
shareholders who are also actively organizations in their fundraising efforts
engaged in the business. during the pandemic. In a limited
number of cases, the non-family CEO
has made decisions to defer payments
The story of a Family to selected vendors and he has applied
Enterprise for a government subsidy to support
the development of the company’s new
In this Family Enterprise example, we digital solutions and has secured a special
have created an illustrative 31-year-old government-backed small business loan.
second-generation company in Mexico
that has 18 employees and provides With a high concentration of family
technology solutions to small retailers. ownership, non-family CEOs often have
less control over organizational changes
The company’s non-family CEO has that may be required in times of crisis.
general operational and financial Because more than one strategy is
expertise. One female family member adopted to address the impact of
is responsible for new technology COVID-19 in this family enterprise
developments and she owns the majority example, we can infer that the use of
of the shares. One additional male family multiple strategies could be the result
member has a minority interest but he is of an often-experienced difficulty in
not directly involved in the business. many family enterprises where it can be
challenging for a non-family member to
manage and govern a firm in which the
Seeking support from family shareholders are acutely aware of
outside the business the operations of the business and are
often directly involved.
As with many similar businesses that have
a concentrated ownership structure and
The CEO’s role in this example involves
a small number of employees, employee
identifying new suppliers and making
reductions were not necessary during the
connections into new markets. He has
early days of the pandemic. Even though
demonstrated strong leadership in
revenues have fallen, the firm has been
taking decisive actions to protect the
able to sustain its business by moving to
financial exposure of the business by
a remote workforce, carefully managing
accessing the low-cost loans provided
the workload of the team and identifying
in the government’s COVID-19 relief
opportunities to reduce some of the
program for business. And with the
operating overhead. The business itself
external contacts that were already
has benefited from some modifications
Learning from experience
Family businesses are known for their One family business CEO described
ability to use past experiences to face his decision this way, “In leading the
disruptions such as the pandemic. In business for more than 40 years, I’ve
the US, around 650,000 companies managed the impact of at least seven
received small business loans as part recessions and I’ve learned what I
of the federal government’s Paycheck need to do. Cash is king. The loan
Protection Program (PPP). Even though program was a good resource for us.”
there is no exact data, it is likely that a
very large percentage of those loans Ana Gonzalez
were received by family businesses. Assistant Professor
of Management
In the Midwest states, for example, Director, Family Owned
Business Institute
many family business leaders have Seidman College of
said that they applied for PPP loans Business, Grand Valley
because they knew what was on the State University
horizon. They have lived through previous
recessions and have learned from
experience that being prepared is key.

established within his network, he
has successfully managed to open the
doors for the sales and marketing team
to pursue new markets among small
retailers and restaurants that require
technology support.
By implementing pivoting actions

such as this, non-family CEOs often
become the chief problem solvers,
finding ways to manage and eventually
overcome the impact of challenging and
potentially threatening situations to the
business. The family owner, who has
the technology expertise in this case,
has been developing innovative product
and service ideas to introduce to new
markets. In this regard, their roles have
been clearly defined and potential
conflicts have been minimized.
Key success factors for the Family Enterprise:
finding ways to grow the business while also reducing expenses
supporting the family with strong non-family leadership
collaborations with external stakeholders
identifying new suppliers
using an established network to identify and open up new markets
developing innovative products and services that are fit for purpose
supporting local communities by leveraging the firm’s expertise to help others.
Characteristics
The Family
The Enterprise
company is led by a family CEO. CEO
Ownership
Characteristics The isFamily Venture
widely dispersed across the family
and multiple
The company is led bygenerations.
a non-family CEO.
Common Two or more
shares generations
characteristics
The company’s of the
of concentrated
are highly they family
mayamong aare
not have involved
a clear competitive
small number of family members. model yet. They also may be more family
in the
the Family business.
Venture oriented than business oriented. Their
The average
Family businesses includedage of the business
in this immediate isreaction
46 years.
is to preserve their
oyees Onlywere
persona one generation of the family
among the smallest and is involved in and emotional investment in
economic
50 youngest It the
in includes
the business. small totomedium-sized
survey. Compared the firm bybusinesses
remaining patient first before
the other with business
family
Approximately approximatelyof these45
personas,
one-half theypercent
companies employing
considering
have fewer mayEmployees
how theyfewer need to
~ < 50
alsothan
tended
haveto have
50 a more
employees.conservative transform the business.
than 50 employees.
response to the impact of COVID-19.
The characteristics shared by companies
These companies generally have fewer represented in the Family Venture
financial and strategic resources to persona include:
implement major changes. Because The Family Consortium
they are relatively small and young,
Characteristics
Ownership is widely dispersed across the family
in the business.
The average age of the business is 46 years.
Employees
< 50 It includes small to medium-sized businesses
than 50 employees.
Employees CEO
< 50
The Family Venture

CEO
Characteristics
These are typically first-generation businesses that are
less than 30 years old.
the business. Employees
There are less than 50 employees. < 50
CEO

Primary COVID-19 could be made, and it soon began to • Has our strategy been tested?
appear that things might need to change
response strategies: to avoid difficult decisions. Recognizing • Does our strategy need to be
Exercising patience, this, the founder and CEO put the refined or completely overhauled?
business transformation family’s human capital resources to work
to begin identifying ways to modify the • Does our strategy account for the
Because of its somewhat more business for a different future. changing dynamics of the family?
conservative approach, the initial
strategy adopted by family businesses • Have we tapped into the
Because the business initially took a
in the Family Venture persona was one knowledge and insights of all
“wait and see” response to the pandemic,
of exercising patience; to wait and see generations of family members?
the family’s early focus was on the
how the impact of the pandemic would importance of maintaining candid and • How well is our ESG strategy
evolve over a period of time. However, frequent communication within the family integrated with our business
it is important to highlight that the and among employees, sub-contractors, strategy? Does it support our
second-most important strategy for customers and suppliers until the long- family legacy and continue to
this group was to begin transforming term outlook became clearer. When it build on it?
their businesses after they had taken appeared that a different path forward
sufficient time to assess the situation would be required for the survival of the
and their options. business, tough decisions had to be made
as the CEO and his family recognized that
the time to revamp at least some parts of
The story of a Family Venture the family business had arrived.
The business represented in our example
of the Family Venture persona is a By leveraging their patient capital in the
25-year-old construction company in the early months of the pandemic, they Key success
Middle East. It is a small, conservatively- were able to understand the full impact
of COVID-19 on their industry and the
factors for the
managed operation that is overseen
by the first-generation founder, with immediate actions that many of their Family Venture:
minority shares owned by his son and competitors were required to take. With
one of the founder’s sisters. their ability to weather the initial storm,
they had the time and resources to
a family that is
The company has 16 full-time employees uncover some untapped and emerging
competitive opportunities and began to strongly embedded
and the majority of the firm’s work is
performed by sub-contractors. With develop a longer-term strategy to take in the business
tight control on the management and their business in a potential new direction.
ownership of the firm, the company took a
cautious approach initially as it faced what Their pivoting strategy began to take
remaining patient
it hoped would be temporary work delays shape through a collaborative effort and recognizing when
(and an inconsistent revenue stream) to diagnose the problems associated it is time to pivot
as a consequence of the pandemic. with the construction industry during
The few short-term actions that were COVID-19 restrictions and the firm is
taken primarily affected the company’s now working on a new pre-fabricated
making tough
employees. Five were furloughed and the construction model that will ease some decisions quickly
hours for the remainder were cut in half. of the immediate installation hurdles and
potentially open up entirely new markets.
While the business is relatively small,
maintaining close
the connections outside the family are relationships with
expansive due to the number of sub-
Sustaining a resilient future
customers, suppliers
contractors and suppliers with whom The personas illustrate some of the many
the company works on an ongoing and other external
strategic choices that family businesses
basis. For a small company such as this, are pursuing as they master their resources for future
maintaining those strong relationships comeback. In assessing the need for collaborative efforts
and connections is vital. new strategic thinking, family business
leaders typically looked for answers to a
While waiting patiently to determine few key questions: keeping the
what the longer-term impact of the communication
pandemic might be, the family focused • Do we have a strategy in place that lines open with all
its energy on maintaining these crucial addresses the current reality as stakeholders.
external connections. There were few well as the longer-term prospects
additional areas where expense cuts for the business?
One size
does not fit all
T
he four family business personas array of options for addressing both
that have emerged from the the immediate and longer-term impact
survey confirmed our original of a global pandemic (and any other
conviction. Family businesses have unexpected event, for that matter).
an extraordinary competitive ability
to act and adapt quickly and they do We would welcome your comments
so in a variety of ways. They are often on the report and your personal
resilient and able to make a comeback experiences and insights on the
than non-family businesses – even in actions that you have taken in your
the face of the most challenging of family business. Please contact
times. It was instructive to see the us at [email protected]
variety and combination of strategies or [email protected]
that reflect the sectors and regions in to share your thoughts on the
which they operate, the generational report and your experiences in
composition and involvement of their triumphing over COVID-19 to make
families and their leadership choices. a successful comeback.
If COVID-19 has taught us anything Contact us

about business recovery and
sustainability strategies, it’s that
one size clearly does not fit all. The
respondents to the survey revealed
excellent examples of how family
business leaders are making a
comeback through a host of different
Andrea Calabrò
strategic decisions and actions, many
STEP Global Academic Director,
of which are influenced by their family Director,
characteristics. IPAG Entrepreneurship & Family
Business Center,
Not only are these leaders introducing IPAG Business School
innovations and taking action to secure E: [email protected]
the future of their businesses, they are
also helping to preserve their families’
values and legacies through the choices
they make. The source of resilience,
agility and adaptability that the world
has come to recognize in the family
business model is simple: the business
family is the mainstay of its resilience Tom McGinness
and endurance. Global Leader,
Family Business,
Regardless of their sector or region, Partner,
the experiences of family businesses KPMG in the UK
across the world have provided an E: [email protected]
48 One
The impact
size does
of COVID-19
not fit all on family businesses globally
Reflections on next steps
We sincerely hope that these • What is the longer-term outlook
insights have prompted some new for your business? Is it time to
considerations as you undertake the recalibrate the business model
next important steps in your own family and adopt new technology
business. We encourage you to reflect solutions? Is a remote workforce
on these questions as discussion a viable, longer-term option?
starters with your business family and
your management teams: • Are acquisitions, strategic
alliances or other opportunities
• How effective have the initial available to diversify your
financial and non-financial products and provide a potential
actions been in mitigating the entry into new markets.
immediate impact of COVID-19
on your business? Did the • Should you consider diversifying
company’s processes and your family wealth?
procedures help to support
• Should the family begin to
these efforts and reduce
play a larger role in the operations
potential risks?
of the company? Are good
• What other actions might you mechanisms in place to facilitate
consider now? the family’s decision-making?
• How relevant are the three • Is it important to engage

strategies (social responsibility, younger generations of the
business transformation and family in contributing to the
exercising patience) for the recalibration of the business? Is
short- and longer-term needs succession planning becoming
of your business? more of a priority?
Methodology
The Global family business survey, COVID-19 edition relied on a convenient sampling strategy replicated across multiple
countries, regions, and jurisdictions. Each affiliated team identified potential respondents eligible for the project considering
the industry characteristics and the business structure of their own country. The survey was designed by a research team
with more than 10 years of experience in conducting qualitative and quantitative research from the STEP Project Global
Consortium, European Family Businesses (EFB) and KPMG Private Enterprise. Previously validated scales have been used
in the questionnaire to define each question. The questionnaire was firstly generated in English and then translated in to
13 languages. The survey was launched in June 2020 and completed in October 2020. In total, 2,493 family businesses
and 517 non-family businesses completed the questionnaire from 75 countries, regions, and jurisdictions in five world
macro-regions: Europe, The Americas1, Asia Pacific and the Middle East & Africa.
1. Number of respondents: 3. Generations (% of family businesses): 5. Main industry of the family businesses:
Global
2,493 Family businesses First generation 42% Service 62%
517 Non-family businesses Second generation 36% Manufacturing 25%
3,010 Total number of businesses Third generation 14% Construction 9%
Fourth or subsequent generations 8% Primary* 4%
2. Size and percentage of 4. Nationalities (% of family businesses):

family businesses: Europe
Respondents from 75 countries distributed in
20 or less employees 36% five macro-regions: Europe; The Americas1; Service 59%
Asia Pacific; and the Middle East & Africa.
Between 21 and 50 employees 17% Manufacturing 29%
Between 51 and 200 employees 21% The Americas1 20% Construction 8%
More than 200 employees 26% Europe 55% Primary* 4%
Middle East & Africa 16%

Asia Pacific
Asia Pacific 9%
Service 59%
Manufacturing 29%
Construction 6%
Primary* 6%
The Americas1
Service 66%
Manufacturing 20%
Construction 8%
Primary* 6%
Middle East & Africa
Service 71%
Manufacturing 12%
Construction 13%
Primary* 4%
1
* Primary includes agriculture, forestry, fishing,
mining and quarrying.
50 Methodology
6. How the COVID-19 pandemic affected 7. Immediate consequences on the family 8. Actions taken in response to the impact
the revenues of family businesses: business of having a family member on the family business:
affected by COVID-19:
Global Global Global
The family member could not go to the Actions to reduce/eliminate labor costs 36%
Revenue decreased 69%
work place but worked from home 37%
Actions to reduce/eliminate operative
Revenue increased 9% No consequences for the family firm 53% costs or planned investments 41%
A family member from the same generation Actions to restructure/differ costs

Revenue stayed the same 22%
took up his/her job while recovering 4% and payments 14%
A family member from the next generation Actions to reduce/eliminate top

took up his/her place while recovering 6% management team compensation 9%
Europe Europe Europe



Asia Pacific Asia Pacific Asia Pacific

A family member from the next generation Actions to restructure/differ costs
Revenue stayed the same 17% took up his/her place while recovering 12% and payments 16%
Actions to reduce/eliminate top

management team compensation 13%
The Americas1 The Americas1 The Americas1



Middle East & Africa Middle East & Africa Middle East & Africa


Acknowledgements
Our sincere thanks to the 3,010 businesses who generously gave their time to participate in the Family business survey and those
who contributed their time and insights in the planning, analysis, writing and production of the report itself.
We would also like to thank our project managers Arpita Vyas (The STEP Project Global Consortium) and Chelsey Byng (KPMG Private
Enterprise), the STEP Project Global Consortium research affiliates and collaborators, the STEP Project Global Consortium and KPMG
Private Enterprise editorial board and Jesus Casado (EFB), who generously contributed their support, knowledge and insights.
STEP Project Global Consortium

affiliates and collaborators
Argentina Germany Malyasia United Arab Emirates

Silvana Mariel Muñoz Thomas Clauß Dr. Mohar Yusof Rodrigo Basco
Witten/Herdecke University Universiti Tun Abdul Razak American University of Sharjah
Brazil
Petra Moog Dr. Leilanie Mohd Nor
Franciele Beck United States
Siegen University BinaPavo
Juliana Binhote Ana Gonzalez
Greece Morocco Grand Valley State University
Canada
Alexis Komselis Lamia Larioui Izabela Szymanska
Albert James
Alba Graduate Business Saginaw Valley State University
Dalhousie University Netherlands
School, American College
of Greece Erik Veldhuizen Venezuela
China
Windesheim University of Patricia Monteferrante
Chen Ling
Guatemala Applied Sciences Instituto de Estudios
Zhejiang Uiversity
Jaly Chea Superiores de Administración
Universidad Francisco Peru
Colombia
Marroquín Cesar Augusto
Luis Diaz Matajira
Universidad de Piura
Universidad de los Andes
Hong Kong (SAR), China
Yeny Rodriguez Kevin Au Rwanda
Universidad ICESI Chinese University of Hong Pierre Sindamiwe
Kong (SAR), China University of Rwanda
Ecuador
Maria L. Granda India Spain
ESPAE Graduate School of Nupur Pavan Bang Ramón Sanguino Galván
Management – ESPOL Indian School of Business University of Extremadura
Alejandro Escribá-Esteve
Egypt Ireland Cátedra de Empresa Familiar
Ashraf Sheta Catherine Faherty de la Universitat de València
American University in Cairo Dublin City University
Manuel Carlos Vallejo-Martos
France Italy Universidad de Jaen
Miruna Radu-Lefebvre Carmen Gallucci Fernando Álvarez Gómez
Audencia University of Salerno University Abat Oliba-CEU
Adnane Maalaoui of Barcelona
IPAG Entrepreneurship & Kenya
Family Business Center Mworia Kaibunga
52 Acknowledgements
KPMG Private Enterprise member firms
We would like to thank all of the KPMG Private Enterprise member firms that participated in the development of this report, in
particular, those that contributed to the interviews and case studies.
Argentina Colombia Greece

Emiliano Martin Andres Barrios Vangelis Apostolakis
National Private Enterprise Leader, National Private Enterprise Leader, Deputy Senior Partner,
KPMG in Argentina KPMG in Colombia KPMG in Greece
T: +543415684567x3128 T: +5716188000 T: +30 2106062378
E: [email protected] E: [email protected] E: [email protected]
Austria Carlos Neira India

Yann-Georg Hansa Head of Family Business, Kalpesh Desai
Partner, Partner, Partner,
KPMG in Austria KPMG Private Enterprise, KPMG Private Enterprise in India
T: +43 1 31332 3446 KPMG in Colombia T: +91 98193 73637
E: [email protected] T: +5716188000 E: [email protected]
E: [email protected]
Australia Ireland
Robyn Langsford Cyprus Olivia Lynch
Partner, Demetris Vakis Partner,
Private Clients & Family Business, Board Member, KPMG Private Enterprise in Ireland
KPMG Australia KPMG Private Enterprise, T: +353 1 410 1735
T: +61 2 9455 9760 KPMG in Cyprus E: [email protected]
E: [email protected] T: +35722209009
E: [email protected] Israel
Brazil Jonathan Lavender
Jubran P Coelho Ecuador Global Head,
Private Enterprise Leader for the South Jamiro de la Calle KPMG Private Enterprise,
Americas Region and Brazil, National Private Enterprise Leader, Partner,
KPMG in Brazil KPMG in Ecuador KPMG in Israel
T: +55 1139403221 T: +59325000051 T: +972 3 684 8716
Canada France Italy

Mary Jo Fedy Alpha Niang Silvia Rimoldi
National Private Enterprise Leader, Partner, National Private Enterprise Leader,
Partner, KPMG Private Enterprise, Partner,
KPMG in Canada KPMG in France KPMG in Italy
T: +1 519 747 8875 T: +33155682005 T: +39 011 8395144
Daniel Trimarchi Nicolas Beaudouin Kenya

Director, Partner, Sandeep Main
Family Business Global Network, KPMG Private Enterprise Associate Director,
KPMG Private Enterprise, KPMG in France KPMG Private Enterprise,
Director, T: +33155682005 KPMG in East Africa
Family Enterprise Advisory, E: [email protected] T: +254202806000
KPMG in Canada E: [email protected]
T: +1 416 777 3816 Germany
E: [email protected] Vera-Carina Elter Malaysia
Head of People and KPMG Private Laikok Tai
China Enterprise in Germany, Head of Family Business,
Karmen Yeung KPMG in Germany Partner,
National Private Enterprise Leader, T: +49 211 475 7505 KPMG Private Enterprise,
Partner, E: [email protected] KPMG in Malaysia
KPMG China T: +60377213388
Dr. Knut Tonne E: [email protected]
T: +86 755 2547 1038
Partner,
KPMG in Germany
T: +49 511 8509 5110
Mexico Saudi Arabia Taiwan (jurisdiction)
Jesus Luna Fuad Chapra Pederson Chen
National Private Enterprise Leader, National Private Enterprise Leader Partner,
Partner, Partner, KPMG Private Enterprise,
KPMG in Mexico KPMG in Saudi Arabia KPMG in Taiwan
T: +52 55 5246 8899 T:+966 503660370 T: +88 6281016666 x 01962
Morocco Dr. Hanoof Abokhodair United Arab Emirates

Abderrazzak Mzougui Associate Director, Anurag Bajpai
Partner, KPMG Private Enterprise & Lower Gulf Leader,
KPMG Private Enterprise, Family Business, Partner,
KPMG in Morocco KPMG in Saudi Arabia KPMG Private Enterprise,
T: +212 537 633 702 T:+966 504684064 KPMG Lower Gulf
E: [email protected] E: [email protected] T: +97143569702
Netherlands Singapore
Olaf Leurs Jonathan Ho United Kingdom
Head of Private Enterprise, Tax Partner, Tom McGinness
Tax Partner, KPMG in Singapore Global Leader,
KPMG Meijburg & Co, T: +27 833886404 Family Business,
KPMG in the Netherlands E: [email protected] KPMG Private Enterprise,
T: +31 88 909 3414 Partner,
E: [email protected] South Africa KPMG in the UK
Alan Barr T: +44 207 694 5453
Arnold De Bruin National Private Enterprise Leader, E: [email protected]
Head of Family Businesses, Audit Partner,
Audit Partner, KPMG in South Africa United States
KPMG Assurance, T: +27 833886404 Conor Moore
KPMG in the Netherlands E: [email protected] National Private Enterprise Leader,
T: +31 26 389 9761 Partner,
E: [email protected] Spain KPMG in the US
Miguel Angel Faura Borruey T: +1 415 963 7559
Mark Lof National Private Enterprise Leader, E: [email protected]
Head of KPMG Private Enterprise, Partner,
Advisory Partner, KPMG in Spain Bradley Sprong
KPMG in the Netherlands T: +34 914563868 Partner,
T: +31 30 658 2160 E: [email protected] KPMG Private Enterprise
E: [email protected] KPMG in the US
Sri Lanka T: +1 816 802 5270
Portugal Thamali Rodrigo E: [email protected]
Luis Silva Partner,
National Private Enterprise Leader KPMG Private Enterprise, Venezuela
Partner, KPMG in Sri Lanka Alejando Rangel
KPMG in Portugal T: +94115426305 National Private Enterprise Leader,
T: +351 220102329 E: [email protected] KPMG in Venezuela
E: [email protected] T: +58 212 277 7892
Switzerland E: [email protected]
Rwanda Hugues Salome
Sandeep Main Partner,
Associate Director, KPMG in Switzerland
KPMG Private Enterprise, T: +41 58 249 37 75
KPMG in East Africa E: [email protected]
T: +254202806000

About the Successful Transgenerational
Entrepreneurship Practices (STEP)
Project Global Consortium
The STEP Project Global Consortium is a global applied research initiative that explores familyand business practices within business
families and generates solutions that have immediate application for family business leaders. The STEP Project Global Consortium
aims to be a leading global family business research project with an international reputation. The research insights are specifically
drawn to be of relevance to developing new theoretical insights that can offer novel and valuable best practices recommendations
to the business stakeholders and the practice community at large. Having a global worldwide orientation, the STEP Project Global
Consortium offers networking opportunities for researchers, family business owners and consultants coming from five continents.
Visit: thestepproject.org
About the KPMG Private Enterprise Global

Center of Excellence for Family Business
As with your family, your business doesn’t stand still — it evolves. Family businesses are unique and KPMG Private Enterprise
Family Business advisers understand the dynamics of a successful family business and work with you to provide tailored advice and
experienced guidance to help you succeed.
To support the unique needs of family businesses, KPMG Private Enterprise coordinates with a global network of member firms
dedicated to offering relevant information and advice to family‑owned companies. We understand that the nature of a family business
is inherently different from a non‑family business and requires an approach that considers the family component.
Visit: home.kpmg/familybusiness
About KPMG Private Enterprise
Passion, it’s what drives entrepreneurs, it’s also what inspires KPMG Private Enterprise advisers to help you maximize success.
You know KPMG, you might not know KPMG Private Enterprise. KPMG Private Enterprise advisers in member firms around the
world are dedicated to working with you and your business, no matter where you are in your growth journey — whether you’re
looking to reach new heights, embrace technology, plan for an exit, or manage the transition of wealth or your business to the next
generation. Working with KPMG Private Enterprise, you’ll gain access to a trusted advisor — a single point of contact who shares your
entrepreneurial mindset. With access to KPMG’s global resources and alliance network, we’ll help you drive your business forward
and meet your goals. Your success is our legacy.
Visit: home.kpmg/privateenterprise
About the STEP Project Global Consortium Mastering a comeback 55

Editorial board
STEP Project Global Consortium

Andrea Calabrò Alfredo Valentino
STEP Global Academic Director, STEP Global Research Champion,
Director, Associate Professor,
IPAG Entrepreneurship & Family ESCE International Business School
Business Center,
Rodrigo Basco Jeremy Cheng

Associate Professor, Researcher,
Sheikh Saoud bin Khalid bin Khalid Center for Family Business,
Al-Qassimi Chair in Family Business, The Chinese University of Hong Kong,
American University of Sharjah Hong Kong (SAR), China
KPMG Private Enterprise Center of Excellence for Family Business

Jonathan Lavender Daniel Trimarchi
Global Head, Director,
KPMG Private Enterprise, Family Business Global Network,
Partner, KPMG Private Enterprise,
KPMG in Israel Director,
Family Enterprise Advisory,
KPMG in Canada
Tom McGinness Melany Eli

Global Leader, Managing Director,
Family Business, Strategy,
KPMG Private Enterprise, Marketing and Communications,
Partner, KPMG Private Enterprise,
KPMG in the UK KPMG
56
home.kpmg/privateenterprise
home.kpmg/familybusiness
thestepproject.org
home.kpmg/socialmedia
Throughout this document ‘We/Us/Our’ means KPMG and the Successful Transgenerational Entrepreneurship Practices (STEP) Project Global Consortium.
‘KPMG’ refers to the global organization or to one or more of the member firms of KPMG International Limited (“KPMG International”), each of which is a separate
legal entity. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. For more detail about our
structure please visit home.kpmg/governance.
© 2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. The
KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization.
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor
to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be
accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
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Publication name: Mastering a comeback: How family businesses are triumphing over COVID-19 | Publication number: 137333-G | Publication date: March 2021

STEP Project-KPMG Global Family Business Survey Report 2021

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Mastering a

08 The impact of COVID-19 on family businesses globally

10 Sector and regional impact

12 From impact to action

18 Absorbing the financial shock of COVID-19

20 Putting purpose and values to work

24 Three key strategies:

32 Making the strategy choice:

33 Four family business personas

34 The Family Corporation

38 The Family Consortium

46 The Family Venture

48 One size does not fit all

55 About the Successful Transgenerational Entrepreneurship

55 About the KPMG Private Enterprise Global

Andrea Calabrò Tom McGinness

4 The impact of COVID-19 on family businesses globally

2,493 517 3,010 Between 21 and

Generations 36% 17% 21% 26%

Received government Acquired financial

Made use of tax reduction and

Employment Three primary strategies

Highest employment reduction Lowest employment

Actions taken by family businesses

41% 36% 14% 9%

Generations that are currently active in the business

Europe Asia Pacific

Global The Americas1 Middle East & Africa

One generation Multiple generations

8 The impact of COVID-19 on family businesses globally

Manufacturing and construction felt

The most significant revenue increases

10 The impact of COVID-19 on family businesses globally

Top industries affected by COVID-19

Hotels and restaurants

Information and communication

The most implemented actions per macro-category

Moving all or Moving all or Freezing Moving all or Reducing

Delaying payment Renegotiating Delaying payment Delaying payment Renegotiating

Deferring or Deferring or Deferring or Deferring or Deferring or

12 The impact of COVID-19 on family businesses globally

Family members were called upon to help the family’s

Albert James, Associate Professor of Family

During the pandemic, uncertainty promoted “what-

Kevin Au, Professor at The Chinese

COVID-19 has accelerated conversations within

Daniel Trimarchi, Director, Family Business

Challenges appeared from all fronts and family

Jaly Chea, Associate Dean for Academics

14 The impact of COVID-19 on family businesses globally

69% The Middle East

Revenue decreased Revenue increased Revenue stayed the same

Difference in the number of

reducing the companies’ employment

payment arrangements with customers.

This supports the widely accepted view -12.00% The Americas1

that under severe threats to their business,

greater focus on the economic priorities

16 The impact of COVID-19 on family businesses globally

18 The impact of COVID-19 on family businesses globally

In September of 2020, a €100 billion recovery plan

Miruna Radu-Lefebvre, Full Professor of

The UAE government’s Virtual Labor Market assists

Anurag Bajpai, Lower Gulf Leader, KPMG Private

finding ways to grow the business while also reducing expenses

supporting the family with strong non-family leadership

collaborations with external stakeholders

identifying new suppliers

using an established network to identify and open up new markets

supporting local communities by leveraging the firm’s expertise to help others.