COVID-19 Is An Ultimate Indicator Of Family Office Functionality


Although it’s a little soon to draw the final line and sum up the overall effect of the COVID-19 pandemic, right now is the best time for a performance checkup. Family offices across the globe are pausing to take a look within, before they can begin planning the future.

Any crisis is destructive. But it is also a very effective litmus test of your team’s performance. The Coronavirus pandemic can easily serve as the gold standard for this rule, since it had family offices and independent UHNWI everywhere facing unprecedented decision-making scenarios. Very logically, family heads can take this time as an opportunity to evaluate just how effective their teams are.

The first thing to assess is the procedure behind making crucial decisions. There are two major factors to consider here: quality and speed. It’s needless to say that these two are codependent and only work as a duet. Because a rapidly executed move that brought poor results is not very different from an impeccably thought-through strategy that took ages to complete.

A very big contribution to a fast and smart decision is its info base. Simply put: what data helped your team as they were facing a dilemma? The process of gathering information is vital to any endeavor, which means screening the sources and deconstructing the way facts are turned into directions can give you a good insight.

Another factor to evaluate is the vision of your family office. Does it comply with the global heartbeat? Is it, perhaps, time to reposition and let younger family members step forward? One of the defining characteristics of the COVID-19 crisis is that the world has never experienced anything like it before. The traditional solutions might not necessarily be relevant or useful. A pair of fresh eyes will not hurt to say the least.

Of course, you will also need to consider how your assets are currently allocated and if they were redistributed during the initial stages of the pandemic. We can very clearly observe how conventional investment paths, such as retail real estate, for example, failed to meet expectations during the first two quarters of the year. While other, often neglected by most conservative family offices segments, like digital communication and media, are breaking all established records.

One of the most important things to remember is that your analysis should not turn into a bombardment of accusations. The frustration caused by the pandemic is already blown out of proportion, there is absolutely no need to push it further. If you discover several weak spots during the evaluation, use them as foundation for improvements.

For instance, if you found that there are not enough people involved in the decision-making, think of who can contribute to the process. On the other hand, when too many participants are visibly slowing down the execution — consider assigning some of them to a different project.

The bottom line is: there are just three things to do during a storm. First option is to panic and keep on frantically screaming, swallowing gallons of saltwater. You could also give in to nature’s temper and allow the ocean to swallow you instead. Or you can look around and use any possible way to recharge and work out an optimal action plan.

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