The vast majority of the local business community is made up of family businesses with challenges of competitiveness, sustainability and succession. They are also part of the ecosystem of small and medium-sized businesses (SMEs). Therefore, much of the local (native) family and financial wealth lies in a sector that faces internal challenges such as those mentioned, but also external challenges such as the work environment, a slow and cumbersome permitting process and the high costs of electricity and raw materials, to name a few.
A recent study carried out by the Puerto Rico Chamber of Commerce revealed that many of the partners interviewed have corporate social responsibility initiatives and some have incorporated the Sustainable Development Goals into their CSR plans.
That is good news, because it shows that SMEs are already positioned to incorporate sustainability strategies at their scale and this is important for the succession of the family business, be it a hardware store, a gas station or a supermarket.
It is important, because for an island economy like ours, so dependent on federal funds and accustomed to fiscal instruments to attract external capital, the best thing SMEs and family businesses can do is incorporate new generations into the family business to thus attract the talent that is currently escaping and to integrate business and social innovation techniques into the company.
It’s simple: a family business without a sustainability plan cannot guarantee business succession. At the same time, a family business without a succession plan cannot guarantee the sustainability of the family business. Succession and sustainability are two sides of the same coin.
It is not surprising that the study carried out by the Chamber of Commerce reveals the high level of social commitment of the companies surveyed. The vast majority are family businesses with values that help their employees and their communities with the financial and human assets that the business has available at the moment.
Furthermore, if we have learned anything in the past years it is that we need each other in times of emergency. But the point is that we need each other when there is no emergency too. Although we can argue that Puerto Rico lives in a constant state of social emergency.
And that is why a family succession plan and a sustainability plan are important: it means moving from reacting to the emergency (improvisation) to being proactive in preparing, adapting, and mitigating the effects of the crises that we are going to continue to face, since whether internal, external or both.
A business sustainability plan identifies the activities that the company already carries out for the environment, community, employees and business. Then, together with management, it identifies risk areas for the social and financial sustainability of the business. And then establishes measurable, realistic and visible lines of action for the community, employees and clients (“stakeholders” or interest groups) to close the gaps that you want to achieve.
It does not require major financial investment, but once the family business embarks on its sustainability path, it requires managerial commitment, since the business plan will be integrated little by little into the sustainability plan to then have a socially responsible company with its employees, community. and environment. And give way to new generations of employees and family members willing to continue the legacy of the family business.
(Be sure to listen to the most recent Planeta Puerto Rico podcast where we go into more detail about the Corporate Social Responsibility study carried out by the Puerto Rico Chamber of Commerce).