Disruptions in the market, competition and even family relationships concern the next generation of leaders of family-owned businesses interviewed by Deloitte.
The Next Gen Survey 2017 found almost half (47%) expected the market in which they operated to face disruption in the next two to three years. Just over a quarter (27%) also expect to lose market share to new entrants. However, according to next-gens, the biggest disrupting factor for family-owned businesses is not market disruption (20%), but the changes in family relationships (24%).
Next-gen leaders of family-owned companies said they were well prepared to anticipate disruption. Deloitte said the survey and conversations showed they have a clear picture of the direction in which their industry was moving and they understood the nature of the disruptive forces in the market and in their company.
They indicated they face two big challenges: the structure of leadership revolves too much around the family/management and there’s a lack of skills among staff to optimally perform in a disruptive environment (17% do not have the skills, 35% only partly have these skills).
The next generation was more aware of the meaning and effect of disruption than the previous generation, the report said.
Interviewees indicated the biggest advantage family-owned businesses have in times of disruption is that they are “fast” and “agile” when compared to other organisations. Almost three-quarters (73%) said succession was a natural moment of disruption.
“The global economy is changing rapidly and fundamentally, due to the exponential speed of transformation in digital infrastructure, among other things,” Mennolt Beelen, leader of Europe, Middle East and Africa (EMEA) Family Business with Deloitte, said.
“Quicker than ever, the past is being left behind—a tendency that in the perception of many goes against the tradition of family-owned businesses. That is why, especially now, it is important to listen to the leaders of the future.”
The Deloitte initiative was conducted by interviewing 268 successors of family-owned companies in the EMEA region. Themes such as succession, disruption, growth and strategy were discussed. The survey was conducted between January and April 2017.