Going Where No One Has Gone Before
Privately held companies are on the front lines in every industry and, during COVID, board members around the world have been called upon to help companies “go where no one has gone before.”
I have seen three phases of board challenges and critical roles in this crisis, both sequential (starting way back when in early 2020) and overlapping as industry, state and country data unfold.
Where can boards provide the most value?
Perspective in the crisis. Boards bring external perspective to help leadership teams get through the crisis. If only “this crisis” was limited to the early days of March 2020. For many businesses, the crisis of demand keeps cascading. Boards have stepped up and in to help navigate the PPP loan process, provide support for difficult furlough and layoff decisions, and advise on discussions with lenders and shareholders about the fast-changing reality.
Urgent and steady in the pivot. Every company is in the midst of reinvention. Traditional sales models are imploding (no more face-to-face visits?), and business models are facing wholesale change (take-out, pick-up, contactless everything). Fewer people, profit pressure and inexplicable surges can create a distortion field for managers. The board can help leaders step back and encourage them to keep accelerating change. Board agendas must prioritize both. The pace is unrelenting and boards have a critical role to play in helping leaders keep up but not burn out.
Visibility for what’s next. The torrent of information, webinars, employee health needs, customer demands, regulations and channel changes make merely “keeping up” a full-time job. The board can help by facilitating discussion about the longer term, through agenda setting and coaching the CEO, making sure that the legitimate urgency of today does not crowd out discussion about the future. Board members who bring functional or market expertise can be particularly helpful in injecting forward-looking issues into the conversation. Every area is moving at warp speed and companies that are going to thrive in the “next normal” need every ounce of expertise possible.
Strong boards will help families and management teams identify and navigate risk in this new world.
For many private and family companies, there is still a lot of crisis to come. Responding to the public health situation, reacting to changing customer and employee needs, and weathering the financial realities of a pandemic-scarred economy will be with us for years. Risk management can’t be a “check the box” exercise. In fact, more engagement from more constituencies will be imperative as we move into the next phase, including those deeper in the business team and beyond today’s family leaders.
Strong boards can lead the way by driving scenario planning (not just good/better/best budgeting) to help companies survive and thrive. Injecting real imagination (although who could have ever imagined this?), filtering the noise and asking questions beyond the immediate is where a great family business or private company board can make a generational impact.
Julia Klein is the CEO of C. H. Briggs Company, one of the nation’s largest independently owned distributors of specialty building materials, and a veteran private-company board director. She is a member of Private Company Director’s editorial advisory board.