Details

  • Service: Advisory
  • Industry: Financial Services, Industrial Markets, Consumer Markets, Information, Communication and Entertainment, Infrastructure, Government and Healthcare, Funding Agencies, Private Equity
  • Type: Business and industry issue, KPMG information
  • Date: 7/25/2011

Making Family Communication a Top Risk Management Strategy 

The current economic climate is forcing business owners to pay closer attention to major risk factors, such as global recession, currency fluctuations and declining consumer confidence, which can negatively impact the company’s performance. While most major risk factors are out of their control, there is one major risk factor that family businesses can control—communications.

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We tend not to equate communications directly with risk management, yet it is one of the major impediments enhancing the numerous benefits that the family component can bring to the table.

 

Over the years, family businesses have done a good job of mitigating market risks. Research reveals that major contributing factors are their willingness to focus on the longer term and their ability to draw upon the family, including the extended family, to help them navigate through tough times. In effect, it is generally agreed that the family component is a major competitive advantage family businesses have over their non-family business counterparts.

 

However, it can quickly turn into a disadvantage if it is not properly managed with effective communication. This is one of the single biggest challenges in managing the family component, yet it is a risk factor over which the family business owner has total control.