Lawrence Nicholson | Family business exposure to natural disasters

Is it possible to adequately prepare for a Category 5 hurricane? This question was posed in cyberspace where ChatGPT resides.

The following was the swift response: “While adequate preparation significantly increases survival chances and minimises risk, a Category 5 hurricane is an extremely dangerous and potentially catastrophic event where complete protection of property cannot be guaranteed”.

Nobody in Jamaica will be bold enough to disagree with this declaration. However, the degree of difficulty in preparing for hurricanes, especially one that packs the destructive power of a Melissa-like Category 5 should not force anyone or any business into inaction.

What are some lessons for family-owned businesses, FOBs, left by the passage of Hurricane Melissa? Walt Disney declared that “the past can hurt. But the way I see it, you can either run from it, or learn from it”. The preposition is that FOBs should learn from Melissa; there is nowhere to run from what is before us.

All categories of businesses are affected by natural disasters. However, small enterprises and FOBs have been found to be more vulnerable to disasters, such as storms and hurricanes.

Part of the vulnerabilities come from the absence of, or insufficient insurance in many cases and the inability to separate family from business. For example, many small businesses in Jamaica do not have insurance, which is compounded by the data showing over 70 per cent of small businesses being FOBs.

In the case of the inseparability of family and business, the Jamaican proverb of using one stone to kill two birds is an apt description. The family of the business and the business of the family are disrupted simultaneously. While non-family members can walk away from a business destroyed by natural disasters, and join the team of another, this will not be the case with family members.

Natural disasters on FOBs, especially of the magnitude of Hurricane Melissa, usually have a double portion of trauma on family and business. In addition to incurring financial losses and physical destruction of property, FOBs must navigate the emotional trauma family and business, which in many cases, come with strained family relationships at home and work.

Opportunity to lead

Deciding to pick up the pieces and start over, or to walk away from the family business comes with additional emotional strain. For example, how does one walk away from the family business which has served as the point of convergence for family members, direct and extended, without walking away from the family?

Difficult decisions must be made, especially during difficult times as we are now facing in the aftermath of Hurricane Melissa. FOBs have the collective intestinal fortitude to make difficult decisions. In all cases of comparison between FOBs and non-FOBs, research shows that FOBs have proven to be more resilient, and have outperformed non-FOBs during national and global economic decline.

This is a time when FOBs can lead the way. They have a board platform to do this, representing a major pillar in holding Jamaica’s economy together, with revenue generated from them being about 32 per cent of the country’s GDP.

This means that FOBs cannot bow, will not bow to the ravages of Hurricane Melissa. FOBs have the tenacity and intestinal fortitude to rise and be stronger. However, to do this, they must apply the lessons learnt from Hurricane Melissa and plug the gaps. What are some of these lessons?

Studies have shown that FOBs have proven to be more altruistic than non-FOBs, not only in Jamaica, but globally. However, they seemed to have come under tremendous strain in the aftermath of Hurricane Melissa. Part of this strain was in response to the many requests to assist in the relief and recovery process.

Responses to some of these requests include: “We have been getting so many requests to help, and we have responded, but where do we stop, without cutting our nose’ to suit our face”; “I would like to help, but I think we have gone over our budget”; and “We are overwhelmed with requests and trying to figure how to process it all. Unprecedented. We have committed so much already but will do our best”.

Some of these responses might have been informed by a state of unpreparedness for natural disasters, especially one that packed the destructive power of Hurricane Melissa.

Navigating crises

These responses led me to ask the question: how prepared are FOBs in Jamaica in facing and navigating the demand that come with natural disasters?

A cursory look at the level of preparation by FOBs revealed many were and are not prepared. Among the revelations were: many FOBs did not have a disaster management plan, there was no line item in their budget for a possible natural disaster, non-existent or inadequate insurance coverage for natural disasters, and that most small businesses, in addition to not been members of any umbrella group, have no idea of the process involved to get any government relief.

That these revelations are consistent with findings across other jurisdictions, including the United States, where only about 25 per cent of small FOBs have a disaster management plan, is no consolation for us in Jamaica. It is time for FOBs to be more proactive in putting disaster mitigating plans in place.

Hurricane Melissa has uncovered many gaps, and FOBs must learn from this.

Petra Nemcova stated that while natural disasters are unavoidable, knowledge can serve as a defence. FOBs in Jamaica must put in action the lessons learned from Hurricane Melissa, because, as stated by Emmet Fox, “the only real misfortune, the only real tragedy, comes after we suffer without learning the lesson”.

James Fenimore Cooper seemed to agree with this in stating that “every trial has its end, and every calamity brings its lesson!”

John wrote, “I have written unto you, young men, because you are strong” (1 John 2:14b). I take the liberty to say that I am writing unto you, FOBs, because you are resilient and able, to put your house in order with the requisite areas of disaster management plan in preparation for a possible incarnation of Hurricane Melissa.

The timing might be shorter than 37 years from now. As Benjamin Franklin is quoted as saying: “By failing to prepare, you are preparing to fail”.

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