David wrote a paper published in this journal – here’s a summary
The article “Stress Tests – Building Resilience in the Face of a Crisis” by David Werdiger explores the resilience of family systems in response to the challenges posed by the Covid-19 pandemic. Drawing inspiration from the song “Tubthumping” by Chumbawamba, the article emphasizes the importance of shared values and good governance as the foundation for family resilience.
Three case studies were presented to illustrate the diverse ways in which families navigated the impact of the pandemic:
Case Study 1 – Weight of Expectations: The article highlights two families, both facing significant financial setbacks due to the pandemic. While both families had third-generation leaders, Alan and Barry, managing their enterprises, their responses differed. Family A, with well-articulated shared values and good governance, weathered the storm effectively. In contrast, Family B, lacking in shared values and governance, experienced internal strife and unsupportive dynamics during their crisis.
Case Study 2 – Family Values Under Pressure: Examining the role of a non-family CEO during the pandemic, the article delves into the clash between family values and the decisions made by the CEO to ensure business survival. It emphasizes the importance of articulating and embedding family values in the business culture. The case study underscores the need for a comprehensive process to discuss and document family values, preventing potential conflicts during crises.
Case Study 3 – Personal Crisis: In a more personal crisis scenario, where the family’s second-generation CEO falls seriously ill with Covid-19, the family’s preparedness and resilience come to the forefront. The family had previously implemented key person contingency plans, demonstrating that awareness of key person risks and proactive planning contribute to effective crisis management.
Analysis and Conclusion: These case studies constructs within a framework that places resilience at the top of a pyramid, supported by good governance and shared values as its foundation. It draws parallels with tactical and strategic responses to crises, emphasizing the necessity of strategic foundations for a successful tactical response.
A proactive approach to address these aspects as part of a broader risk discussion within family enterprises. The Covid-19 pandemic serves as a reminder that inadequately articulated values and governance pose risks to families. David concludes by stressing the often-overlooked importance of shared values and governance, cautioning families against delaying these foundational aspects.
In essence, “Stress Tests” underscores that while no family can avoid facing challenges, a strong foundation of shared values and good governance ensures they can endure and rebound effectively.