Family businesses in times of crisis: AHBGI, Dubai

May 29, 2020

As part of the series of interviews dedicated to “Family Businesses in Times of Crisis”, we are pleased to share a conversation of Rania Labaki, Associate professor and Director of EDHEC Family Business Centre, with Raméz A. Baassiri, a fourth-generation board member of AHB Group Investments (AHBGI). AHBGI is a privately held family business with family entrepreneurial roots stemming as far back as a century, with equities in diversified businesses in the fields of real estate, construction, manufacturing, trading, health care, food and beverage and telecommunications.   The COVID-19 pandemic had a ripple effect on the world economies and societies. How have the family and the business been particularly impacted? The impact of the pandemic on the business varies across the industries in our portfolio. This question mainly brings me back to a realization I had when writing my book ‘Interrupted Entrepreneurship’. What counts most and foremost in the family business is the safety of our people and organization. When the borders started to close, 40 % of our board, composed by family and non-family members, were abroad on business trips and were therefore stuck away from their families. So early on, before the social distancing was in place, we had to adapt by using technology to connect and communicate. This separation has helped us view the challenges we are facing a bit more from inside the glass than from the outside, in a more personal perspective. We were for example able to reflect on the ‘personal’ price each member has to pay, whether psychologically or technically, to navigate this crisis. What was most touching though was the fact that many of those who were operating in the shadows of our business processes stepped up and took a lead. This was a bright light during an ever-gloomy situation. How did these changes translate into initiatives (or strategies)? On the business sides, we followed a series of steps: 1. Facing reality quickly. 2.Setting up realistic and achievable goals 3. Working towards these goals but on a more frequent review as the situation is very fluid 4. Taking both a defensive and offensive approach, that is trying to survive yet seek new opportunities. 5. Ensuring closer ties with our clients, suppliers and associates. 6. Cash flow management In parallel, we started by setting up a range of safety criteria and a Covid task force, selecting from each department a person in charge of ensuring the implementation of the criteria. The criteria evolved along with the situation, through extensive research and review of procedures, addressing the concerns for employees with medical conditions and those aged over 60 who were early on asked to work from home. Then we extended this procedure to all the employees and provided a more flexible work schedule from home, to account for those having to support their children studying online. In a way we ended up having round the clock teams working based on what set of circumstances they were faced with. Among the other initiatives, we organized clubbing groups of 6-8 members, ensuring that no face to face interaction with other groups, so as to curtail any […]

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Family businesses in times of crisis: Grupo Alfa, Colombia

May 25, 2020

As part of the series of interviews dedicated to “Family Businesses in Times of Crisis”, we are happy to share the recent conversation of Rania Labaki, Associate professor and Director of EDHEC Family Business Centre, with Ana Maria Matallana Boggio, president and director of the foundation of Grupo Alfa, Fundación la Cayena. Grupo Alfa is a second-generation manufacturing family business specializing in wall and floor coverings in Colombia. The COVID19 emergency has changed our lives. How the family and the business have been impacted ? The siblings of the second generation, two sisters and one brother, are currently operating the business, with Carlos Alberto Boggio the CEO of the Group and the head of the family. They have stayed very united. Their cohesion has been the most important value in this crisis. Still, the family members were not able to see each other often given the travel restrictions between Colombia and the USA, where some of the family live. Some members of the third generation who study in the USA, were not able to return to their schools and are studying at home. The family was also very sad because our older son had his High School graduation canceled whereas we were planning to celebrate this important occasion altogether. When Colombia started to be in quarantine on March 22nd, the construction industry was not considered an essential business. So, we had to close all our stores and shut down all the six ceramic plants. Imports and export within Colombia have been restricted, just like all the other flights and transportation within the country and abroad. That makes it very hard to maintain the operations with the 2000 direct employees of the Group. How did these changes translate into initiatives (or strategies)? We have operated on several fronts. Our priority was to try to maintain all employees. But after one month of quarantine and no sales we had to start looking for other options. The siblings in charge of operations are talking almost every day and supporting each other on all fronts. Each of them is responsible to communicate to their other family members what the business and the family are doing. Through our foundation, we have supplied groceries, food and masks to the communities we directly impact. We also offered to the children and youth of the community a sport and values program to do at home with their parents. With the schools closed, domestic violence has increased in Colombia. For many children, school is their safe place. We believe that this type of programs, help vulnerable communities deal and manage this situation. The vulnerable women entrepreneurship unit of the Foundation, who used to manufacture uniforms for the industries, is now manufacturing bio-security items (masks etc.) for the population. We also partnered with another social enterprise that works with vulnerable populations, to manufacture more bio-security items to be able to provide to vulnerable communities and also sell them in our stores. One of the plants, that was closed, started manufacturing anti-bacterial gels and antibacterial cleaning material for hospitals and selling them to the population because these items became scare during […]

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Family Businesses in times of crisis: LISI Group France

May 21, 2020

As part of the series of interviews dedicated to “Family Businesses in Times of Crisis”, we are pleased to share the recent conversation of Rania Labaki, Associate professor and Director of EDHEC Family Business Centre, with Emmanuel Viellard, CEO of LISI Group and President of Viellard Migeon & Cie, which is a member of The Henokiens. LISI is an industrial company, with French origins dating back to 1777, today one of the worldwide leaders in fasteners and structural components. The COVID-19 pandemic had a ripple effect on the world economies and societies. How has the family business been particularly impacted? The business was very hardly hit on average with 50% of revenue decrease for the months of April and May 2020. The new generation was getting prepared to ramp up. Given the context that is not easy, it will take over very gradually. How did these changes translate into business and family initiatives (or strategies)? As it is impossible to change the industrial infrastructures in the short term, we need to decrease the breakeven and adapt our structures for the short term. On the mid-term, the different markets will gradually recover but at a slower pace compared to normative levels. Overall the family agreed on reducing dividends this year, despite a good 2019 year, in order to protect the sustainability of the family business One of your core values manifests itself in the relationship with the territory. What are your responsibilities as ambassadors of this territory in this context? We will take all the necesssary measures including difficult ones but with a consideration for the local and the responsibility for the long term. Given the commitments of all our employees we were the first to be able to start again the production and delivery in March to ensure the continuity of our customers programs. How are your preparing for the post-crisis phase, in line with medium or long-term challenges the family business will be facing? With the work sharing program, we try to protect the ability for a short recovery with all the forces we have built for many years. Thanks to our cautious management we are strong enough financially to survive these difficult times. In the past few weeks we had a good opportunity to stop and listen to ourselves. With a positive attitude, is it possible to see this crisis as an opportunity to improve our personal lives and businesses? If yes, how? It is difficult to avoid thinking of the business hardly hit. In addition, the teams and myself are clearly 100% focused on the turnaround including crisis management. I do not believe there is another world really balanced between real economy and more comfort. The day of tomorrow will be close to the current one.

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