How GCC Family Businesses Can Prepare For Growth After The Pandemic Beyond the crisis response, family businesses must adapt themselves to a changed post-crisis landscape.

By Marc-Albert Hamalian

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.


This article was co-written with Ramy Sfeir, Partner, Strategy&, and Bilal Mikati, Principal, Strategy&.

The dual shocks of the COVID- 19 pandemic and low oil prices are severely stressing GCC economies. This especially applies to many family businesses, which entered the crisis on shaky footing with high leverage, limited liquidity, and depressed profits. It is vital that these businesses weather the current storm and prepare themselves for the future, given that these organizations constitute 60% of the region's non-oil GDP and employ 80% of the workforce, according to PwC's Middle East Family Business Survey.

Fortunately, most family businesses have taken sound measures for the immediate crisis. Many are supporting staff and retaining the talent necessary for their long-term success. Some are contacting key clients and suppliers to coordinate actions and ensure business continuity. They are drawing down credit lines and pooling cash among their businesses while getting the most from their working capital. However, beyond the crisis response, family businesses must adapt themselves to a changed post-crisis landscape. We believe that family businesses should adopt four strategies to better position themselves for longterm success:

1. Diversify through a new lens

Economic cycles have shortened, and financial crises have become sharper, more frequent, and global in nature. Consequently, the traditional risk management focus on sectors and geographies is failing to shield portfolios adequately. Moving forward, family businesses need to take a more encompassing view of risk when constructing and managing their portfolios. They should incorporate an assessment of other factors (e.g. cybersecurity threats, disruptions to supply chain, geopolitical events) on cash flows and valuation drivers (e.g. demand, price) to understand risks in aggregate across the portfolio. They should also conduct portfolio stress testing against these potential shocks. Family businesses need to improve portfolio liquidity and geographical diversification. This means rebalancing and, where necessary, overhauling their portfolios to reduce concentration on core businesses. Taking some of their assets public can boost liquidity, and also allow them to benefit more directly and faster from government stimulus packages during times of crisis. Geographical diversification can also reduce potential market risks.

Related: The How-To: Building A Successful Family Business

2. Digitize their core operating businesses and invest in "stay-at-home"

Before the pandemic, online shopping and working from home was on the rise. Now, it is likely to become a structural "way-of-doing-business" for consumers and businesses alike. Thus, family businesses, particularly those in retail or financial services, will need to adapt their operating companies' business models to the new "stay-at-home" economy. They will need to open digital channels and offer services remotely. For that, they will need to invest in digital infrastructure and cybersecurity and develop the appropriate digital capabilities for their core operating businesses. In considering new investment opportunities that will benefit from the "stayat- home" economy, family businesses should look at digital business enablers such as cybersecurity, distance learning tools, remote work platforms, digital banking, and delivery services.

3. Take advantage of localization opportunities

The closing of national borders to protect populations from the COVID-19 pandemic has accelerated the examination of critical supply chains and how to increase localization efforts. For family businesses, investing in local production capabilities and supply chains can reduce reliance on imports and protect against potential supply chain disruptions. Opportunities in manufacturing could be particularly attractive given the manufacturing sector's stable performance through oil cycles in Saudi Arabia. They can also consider domestic tourism and entertainment opportunities given the expected drop in international travel.

4. Pursue private sector participation (PSP) opportunities

Government deficits in the region are increasing, a result of lower oil revenues and higher spending to support economies. For example, the Saudi Arabia government announced stimulus packages totaling SAR120 billion (US$32 billion) as of April 9, 2020. Governments will therefore need family businesses to fuel the economic engine more than ever. Family businesses should respond by taking on significant PSP projects such as infrastructure opportunities by, potentially, creating partnerships between multiple family corporations to combine capabilities and share risk. To adapt to these changes and enhance the performance of their businesses and investments, family businesses must strengthen their corporate holdings by attracting the right talent, improving portfolio construction and value-creation capabilities, and investing in digitization initiatives. In this manner, they can be ready for growth after the pandemic.

Related: What The COVID-19 Crisis Will Mean For Family Office Investment Disputes

Marc-Albert Hamalian

Partner, Strategy&

Marc-Albert Hamalian is a Partner with Strategy& and a member of the family business, investments and real estate practice in the Middle East. He leads the family business and investments offering, working primarily with family conglomerates, investment companies/private equity firms, and sovereign wealth funds

Related Topics


2022, The Year That Was: Rami Shaar, Co-Founder And CEO, Washmen

According to Shaar, 2022 will be classified -in his company's books at least- as "the year of wins," given that his enterprise was able to celebrate three key accomplishments over the course of the last 12 months.


If You Want People to Follow You, Stop Being a Boss — 8 Steps to Truly Effective Leadership

Understand the key differences and embark on the journey from boss to leader with these eight vital steps. This article unveils how to inspire and lead teams with passion and purpose.

Starting a Business

This Couple Started Renting Rooms in Their House As a Side Hustle. Now They Run 11 Airbnb Units Full Time.

In the new book, "Start Your Own Airbnb Business," Airbnb Superhosts share how they have grown lucrative rental businesses.


4 Out of 5 Entrepreneurs Step Down as CEO — Here Are 3 Things You Need to Do So You're Not One of Them.

Navigating the journey from entrepreneur to CEO is a profound transformation, one that often separates visionary founders from effective business leaders.



Nadeera is an enterprise that is instilling circular economy practices in our societies through technology-enabled interventions.

Business News

This Influencer Has Nearly 150,000 Instagram Followers and Makes Over $10,000 a Month. There's Just One Catch—She's Not Real.

Aitana López has over 149,000 Instagram followers and brands love her. Is she the future of social media marketing?