Family-owned businesses must be protected

The effects of Hurricane Melissa on Jamaica continue to resonate across all sectors. While more attention has been given to what we label as negative effects, there are more than the residual positive effects on many sectors. For example, there are reports of the bonding of arch enemies in many communities across Jamaica, evoking the biblical good Samaritan response to the question of who is my neighbour. There are reports of the removal of man-made partitions between and among churches, in the mode Paul’s description in Ephesians 2:14-22 of Jesus tearing down the wall of partition used to keep each other apart and at a distance. It is unfortunate that this coming together has come about through death and destruction. However, as with the many parables of Jesus, and the Pauline’s epistles, there are lessons embedded in natural disasters in the mode of Hurricane Melissa. One lesson is captured in the words of Francis David: we need not think alike to love alike. There are many lessons related to family-owned businesses (FOBs). The space allows for the examination of two of these.

Friendship and business are not mutually exclusive

Trade secrets

While there are many positives and benefits of FOBs, the tendency to be selfish, insular, and secretive are among the negative traits highlighted in the FOBs literature. Research shows that while the presence of these traits might prove useful and seem to benefit the business during the inception and early growth phases of the business life cycle, they can be a scar on the business in the long run. This is not to suggest that FOBs should display and make public their “trade secrets” and the elements of familiness that are at the core of them having a competitive advantage. What it does suggest is that having and maintaining good business relationships among your competitors and operating a successful family business are not mutually exclusive. This mode of operation seems to be more important in small developing sates, and in the case of Jamaica, in communities that share common spaces, attend the same churches and schools, and share familial ties, known and unknown. This lesson echoed across communities adversely affected by Hurricane Melissa.

By all the tenets of geographical measures, Jamaica is a small country, and it will benefit owners of family businesses to heed the words of Maya Angelou that “a friend may be waiting behind a stranger’s face”. This stranger, who might be a distant family member, is ready and willing to lend a helping hand, as revealed in many communities in the aftermath of Hurricane Melissa. Without being cartoonish, FOBs might even want to heed the words of A. Milne in Winnie-the-Pooh and come to understand that “You can’t stay in your corner of the forest waiting for others to come to you. You have to go to them sometimes.” The lesson for many owners of family businesses is that while “we do not have to be close friends, businesses can be successful in a non-adversarial environment”. If the label of friendship is considered too strong, it can be agreed that it is important to have and maintain a non-adversarial camaraderie among businesses across Jamaica, most of which are small FOBs. Yes, this is a call for FOBs to lead the way to make good out of what Melissa meant for evil.

Governments must be strategic in preserving small FOBs.

Natural disasters

The rate of business recovery from natural disasters is affected by different factors and varies across industries and countries. Factors that affect a country’s rate of economic and social recovery from natural disasters include the magnitude and type of the disaster, the economic structure of the country, the preexisting economic vulnerabilities, the topography of the country, the political structure, the policy framework that informs the government’s aid, and the attitude of the people. The length of this article does not allow for a detailed discussion of each factor. However, it is relevant that we address concerns raised in response to a position expressed by Prime Minister, Dr Andrew Holness, on the framework that could inform the government’s aid in the aftermath of a natural disaster.

Prime Minister Holness has stated that the government intends to change its approach in offering aid to those adversely affected by Hurricane Melissa. This will translate to a shift from giving physical care packages to a voucher and gift card system. The thinking informing a shift in approach seems to be that the continuation of the current modality will slow down the recovery process. That is, the current modality caters for minimal economic activities among small businesses, leading to the shutting out of small businesses from the supply and value chains. Most of these small businesses are FOBs, the engine of growth in Jamaica. There have been supportive and opposing views to this proposition. The fleshing out of this proposal will benefit from an open and balanced discussion that involves the relevant stakeholders, including the small FOBs. Unfortunately, too many Jamaicans suffer from what I call the Mutty Perkins syndrome of opposing or doubting anything coming from the government. This should not stand in the way of fostering meaningful engagement because while the recovery process can survive disagreement, it might not survive apathy.

Few, if any, will disagree that the long-term provision of aid and care packages to individuals and families following a natural disaster comes with a mixed bag of positives and negatives. While many are quick to discuss the positive aspects, there is usually a reluctance to voice the negative aspects because of a possible political fallout or not wanting to be labelled callous or uncaring. However, not being a politician and having no ambition in that direction, I take the liberty of entering the fray in the interest of small FOBs across Jamaica.

Undermining of small businesses

Possible effects of government long-term provision, in the mode that currently obtains, include people developing a dependency syndrome, thus reducing self-sufficiency; a distortion of local markets or the undermining of small businesses, the creation of “charity hazards” – people reducing their risk-mitigation efforts because they expect government aid, and the ultimate demise of small businesses or the creation of new businesses. The economic upsides of long-term government provision of aid and care include providing essential stability for individuals and families, providing the space and resources to facilitate sustainable recovery, rebuilding of infrastructure, promoting economic growth, and self-sufficiency. From a reading of the pros and cons of the government’s long-term provision of aid and care packages, the question on the table should not be, ‘to give or not to give’. A more relevant question should be what mechanism the government employs to find an equilibrium between the upsides and downsides of a long-term provision of aid.

From my reading of Prime Minister Holness’ proposition, while long-term government aid is necessary in the aftermath of a hurricane, its continued provision should be strategically managed to support and strengthen the country’s economy.

It is my considered view that an approach is needed that provides long-term aid and care packages to individuals and families that will not lead to the demise of small FOBs. A mechanism is needed that will engage the production process, or the supply and value chains of the small FOBs. One that will help to stimulate the economy and avoid the death of many small FOBs.

It should not be difficult to convince even those who suffer from Oppositional Defiant Disorder (ODD) that we need to protect small businesses such as corner shops, cookshops, restaurants, and supermarkets in the areas adversely affected by Hurricane Melissa. With over 70 per cent of small businesses in Jamaica being FOBs, which, collectively, employ thousands of people across the parishes affected by the hurricane, we have an obligation to protect them.

What is the solution?

The solution lies in the government employing a mechanism to continue the provision of aid that will not lead to the demise of small businesses. We could start with the proposition prime minister Holness has placed on the table. However, the operationalising of this proposal should be preceded by open and balanced discussions that will include the relevant stakeholders. Jamaica is at the point that almost everything proposed by any government is treated with suspicion of an attached ulterior motive of gaining political mileage, or that which is labelled with the big “C”. Suggestion to the government – engage the churches and other civic groups, and minimise the involvement of politicians in the supply chain in the distribution of the proposed voucher and gift card system. The approach used should be transparent and fair, subject to an ongoing audit by independent bodies.

Cutting off one’s nose

Jamaica cannot afford the demise of small FOBs. We need to keep the engine of economic activities rolling. Continuing the current system of government provision of aid and care packages with no link to the business sector is tantamount to cutting off one’s nose to suit one’s face. The distortion will lead to job losses, the significant risk of fostering a level of dependency syndrome where recipients lose the incentives to continue or start FOBs. The economic impact of long-term government aid depends heavily on its design and implementation modality. Government support is most effective when it shifts from immediate relief to resilience-building initiatives, using tools such as cash transfers, vouchers, and cash-for-work programmes. These approaches can help revive small businesses by providing incentives for self-sufficiency and fostering long-term economic recovery. This is a call for the preservation of small FOBs, not only in areas adversely affected by Hurricane Melissa, but across Jamaica.

More anon.

Lawrence Nicholson, PhD, is a senior lecturer at the Mona School of Business & Management, University of the West Indies, author of Understanding the Caribbean Enterprise: Insights from MSMEs and Family-Owned Businesses and a former director of the RJRGLEANER Communications Group. lawrence.n.08@gmail.com