Next generation of family business leaders embracing digital change, but facing hurdles
- 75% of next gens believe it’s very important or essential to have a strategy fit for a digital age—but only 7% believe their firm is currently doing this well.
- 36% of next gens are often frustrated because the current generation does not fully understand the potential for digital and the risks it could pose.
- Similarly, 82% of next gens polled think innovation is very important or essential, but only 15% see it as a current strength at their firm.
- 75% of next gens have big plans about taking the business forward, but 26% of them find it difficult to get the current generation to give serious attention to those ideas.
- Study identifies four paths to success for next gens: stewards, transformers, intrapreneurs, and entrepreneurs.
- Stewards – Individuals focused on ensuring the long-term sustainability of the family firm and protecting its profitability by staying true to the established core business
- Transformers – Next gens who take on the task of driving significant change in the family firm, with the scope and support to do so
- Intrapreneurs – Those whose families carve out a specific venture for next gens within the family firm, effectively the opportunity to be an entrepreneur within the firm itself
- Entrepreneurs – Next gens who pursue their own ventures outside the family firm, often in completely unrelated sectors
“These next gens are truly impressive individuals, already making a significant mark whether inside their family firm or on their own,” said Wills. “Our research indicates that ‘success’ can take many forms, and there are many different routes to achieve it.”
- Culture – The family firm should foster a “safe place” for the next gen to explore and grow.
- Communication – Genuine two-way engagement between the current and next generation, based on mutual respect and trust, ensures that experience is properly valued and new ideas are appreciated.
- Clarity – It is vital to have a clear strategy and agreed demarcation of roles and responsibilities—particularly where colleagues are also relations and emotions are always in play.
- Credibility – As the “boss’s child” a next gen needs to earn the respect of co-workers, possibly gaining experience outside the family firm first.
- Commitment – The business needs to make a long-term commitment to the development of the next generation, but the next gen should also reciprocate with a willingness to invest time in the business and give it a chance to work.
“Sustainable success in the world of family business depends on give and take, and the ability to balance the needs of firm and family—next gen and current gen,” said Siew Quan Ng, PwC’s Asia Pacific Entrepreneurial & Private Business Leader. “If any of these pieces are missing or misfiring, the succession process becomes a risk not an opportunity.”
Nicholas Braude-United Statesnicholas.firstname.lastname@example.org+1 617 530 5435
Ahpy BokpePwC global marketing and communicationsUnited Kingdomahpy.email@example.com+ 44 20 7804 6253
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