Building Legacy: Leadership and Investment Impact on Family Businesses
Building Legacy: Leadership and Investment Impact on Family Businesses
It's been more than 5 weeks since the Asian Family Enterprise Excellence Conference 2021 or AFEEC 2021. At that conference, I got to pick one topic that's very relevant to the global situation today.
With world leaders, governments, non-government or not-for-profit organizations taking an all-hands-on-deck attitude and approach, the topic of family philanthropy is now as relevant as the worldwide vaccination program.
Philanthropy has been the concern of most family business owners on the aspect of business sustainability in their businesses.
According to the Center for High Impact Philanthropy, families in business are concerned not just about achieving impact with their philanthropic giving, they also have a compelling need to measure how their financial investments are aligned with family values.
These values that families hold dear can be seamlessly incorporated into their wealth management and investment decisions. Impact investing strategies should be aligned with family values since this is one way of involving the younger generation of leadership and management in a family office if a family has one.
There are key points to learn from the talks and sharings of Mr. Philo Alto, the founder, and CEO of Asia Value Advisors, Mehvesh Mumtaz Ahmed, the Director Research and Center for Asian Philanthropy Society and Mr. Earl Valencia, the Co-Founder of Plentina about the Investing Impact for Family Businesses.
Why family businesses should care about the impact
Mehvesh cited compelling reasons why family businesses should care enough to step up and have an impact.
- To consider the macro big picture to the extent that we are witnessing an extension of climate change to the point where no one can afford to make an impact. Dangerous weather events are becoming more frequent or severe as climate change worsens, affecting people's lives and businesses.
- The pandemic pushes Asians back into poverty and raises global unemployment. COVID-19 had an immediate impact on most industries and regions around the world. We predicted that the first indicator of COVID-19's impact on family and non-family businesses would be revenue, and we were correct.
The initial reaction was to cut spending and employment costs. Some family businesses have sought financial assistance from government programs. Others consider how to change their businesses to reflect the realities of a changing global economy. Families reaffirmed their purpose and values to ensure that their governance practices and commitments to all stakeholders remained consistent.
- Individual governments are asking people and businesses with resources to step up, similar to what is happening in India, where the PM Cares Fund actively seeks Social Corporate Responsibility solutions (SCR). The government is under increasing pressure to do more because no sector can meet the needs of the entire world on its own.
Individual business leaders—we know that individual business leaders want to make a difference. According to the survey, 90% percent of leading Asian businesses and business leaders say they are doing or want to do impact investment. However, based on the results of the survey, 16% have only recently begun to see the benefits of their investment. It is important to note that the impact is being generated by future and incoming employees. Millennials and Generation Z will make up the majority of the workforce by 2025, and they want to work for organizations that have meaning and impact.
Have you scaled the impact of a family business?
According to Mr. Earl Valencia, Co-Founder of Plentina, it is the family business's responsibility to pass the baton to the next generation. And this will necessitate extra efforts to assist the next or younger generation in making an impact.
The impact of technology is one of the supports that the next generation requires. While studies of technology strategy and family business have evolved independently to a large extent, there are some signs that they are now merging. The impact of technology on family relationships is significant. It has a significant impact on families because it reduces family time, socialization, and face-to-face interaction. As a result of technological advancements, how families interact is changing.
The level of support provided by family members to the next generation to support an impact start-up is extremely important. Beginning a business is far more difficult than most people believe. It is unusual for a company to be so tuned into its niche that it can float along with little effort.
Having the founder mindset benefits other founders by improving the matriarch and patriarch mindsets, which aid in the development of impact in their businesses and society. The ability to learn underpins much of what it takes to be a successful early-stage founder. A growing mindset ensures that you are always focused on learning.
In conclusion, begin to consider the first thing you can do, as well as the things you have already been doing that fit into your residual impact portfolio. It will give you guidance to combine appetite for financial and social returns, which you may already be doing, and making investments that fits your needs.
Devise your impact measurements. Impact measurement can aid in the creation of systemic, long-term change while also driving value creation for an organization. Impact measurement allows organizations to account for their social performance, value their contribution to society, and build credibility with stakeholders such as customers and suppliers. There is no need to be concerned about the complexity of involvement because the impact measurement should work for both the investee and the investor.
Ignite the spirit of our ancestors' patriarchs and matriarchs by being able to consider how massive changes have occurred and what we can do to change and fill those needs and gaps.
We should not wait for impact investing or philanthropy tools, or even instruments that may be developed in the future, to be perfect, liquid, or ready. We should move towards a post-pandemic new normal. It is always a good time for older and younger generations to understand what is available, how their landscape has changed because the impact will happen whether we like it or not.
The initial reaction was to cut spending and employment costs. Some family businesses have sought financial assistance from government programs. Others consider how to change their businesses to reflect the realities of a changing global economy. Families reaffirmed their purpose and values to ensure that their governance practices and commitments to all stakeholders remained consistent.
Individual business leaders—we know that individual business leaders want to make a difference. According to the survey, 90% percent of leading Asian businesses and business leaders say they are doing or want to do impact investment. However, based on the results of the survey, 16% have only recently begun to see the benefits of their investment. It is important to note that the impact is being generated by future and incoming employees. Millennials and Generation Z will make up the majority of the workforce by 2025, and they want to work for organizations that have meaning and impact.
Have you scaled the impact of a family business?
According to Mr. Earl Valencia, Co-Founder of Plentina, it is the family business's responsibility to pass the baton to the next generation. And this will necessitate extra efforts to assist the next or younger generation in making an impact.
The impact of technology is one of the supports that the next generation requires. While studies of technology strategy and family business have evolved independently to a large extent, there are some signs that they are now merging. The impact of technology on family relationships is significant. It has a significant impact on families because it reduces family time, socialization, and face-to-face interaction. As a result of technological advancements, how families interact is changing.
The level of support provided by family members to the next generation to support an impact start-up is extremely important. Beginning a business is far more difficult than most people believe. It is unusual for a company to be so tuned into its niche that it can float along with little effort.
Having the founder mindset benefits other founders by improving the matriarch and patriarch mindsets, which aid in the development of impact in their businesses and society. The ability to learn underpins much of what it takes to be a successful early-stage founder. A growing mindset ensures that you are always focused on learning.
In conclusion, begin to consider the first thing you can do, as well as the things you have already been doing that fit into your residual impact portfolio. It will give you guidance to combine appetite for financial and social returns, which you may already be doing, and making investments that fits your needs.
Devise your impact measurements. Impact measurement can aid in the creation of systemic, long-term change while also driving value creation for an organization. Impact measurement allows organizations to account for their social performance, value their contribution to society, and build credibility with stakeholders such as customers and suppliers. There is no need to be concerned about the complexity of involvement because the impact measurement should work for both the investee and the investor.
Ignite the spirit of our ancestors' patriarchs and matriarchs by being able to consider how massive changes have occurred and what we can do to change and fill those needs and gaps.
We should not wait for impact investing or philanthropy tools, or even instruments that may be developed in the future, to be perfect, liquid, or ready. We should move towards a post-pandemic new normal. It is always a good time for older and younger generations to understand what is available, how their landscape has changed because the impact will happen whether we like it or not.
