The next generation of family business owners remain pessimistic about the digital progress of their inheritance, with less than half feeling their company strategies are fit for digital purpose.
That is a key finding from PWC’s global Next Generation family business survey. The 2016 survey returned to the earlier participants of its 2104 research to provide a valuable longitudinal study of hundreds of diverse businesses, linked by their familial ownership structure.
The survey, which has been running for over a decade, reported five key findings:
- 70 per cent of next gen leaders had worked with outside firms before joining the family business. They left the family fold to gain both skills and credibility, often with the encouragement of their parents.
- 88 per cent of next gens felt driven to be more than merely caretakers of the family business. They want and expect the business to look very different by the time they retire.
- In a closely related finding, only 41 per cent believed their company had a strategy fit for the digital market and 40 per cent confessed to feeling some frustration in getting new ideas accepted by the current generation.
- More than 70 per cent of respondents across the generations identified recruiting and retaining skilled workers as a number one priority.
One thing which has not changed? Succession anxiety. Both this generation of leaders and the next are worried about the handover process. Speaking during a live-stream of the survey launch, PWC’s Henrik Steinbrechen said he found ‘ambition and high expectations’ characterised the research findings about the next generation, which was ‘very good news’ given the importance of family-run businesses for job creation around the world.
PWC Australia separately released a local perspective on the wider survey. The end of the long boom has seen confidence in growth fall away. Political changes have emphasised the national conversation about innovation and ideas as drivers of growth, cutting across the survey’s finding that younger business leaders in family companies worry about pushing through digital strategies.
“It’s understandable the current generation is cautious about making big investments in digital, considering how fast technology is changing. However, standing still is not an option” said Stuart Morley, Head of PwC’s Family, Business and Wealth team, echoing the concerns of the next gens.
Surprisingly, although many younger business leaders expressed their frustration at the lack of a digital strategy, locally more than 70 per cent did not believe their business was at risk of digital disruption. This might be evidence of deep denial, or an honest belief in the ability of the next generation to adapt.