Next generation of family business leaders embracing digital change, but facing hurdles

20 September 2017

 

  • 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.

Among the next generation of family business leaders, 75% have big plans to take their business forward. But generational challenges persist in the areas of digital and innovation, according to new global research by PwC, Same passion, different paths: How the next generation of family business leaders are making their mark.

In today’s business landscape, all firms—family businesses or otherwise—need to address the digital challenge. 75% of next gens polled believe it’s very important or essential to have a strategy fit for a digital age, yet only 7% believe their business is currently doing this well.

Over a third of next gens polled (36%) expressed frustration that the current generation does not fully understand the potential for digital and the risks it could pose.

Sian Steele, UK family business leader at PwC, said:

“It’s encouraging that the majority of next gens recognise the opportunities and threats of digital disruption, but concerning that so many feel it isn’t yet being adequately addressed.

“In the UK, less than half of family businesses say they have a strategy fit for the digital age. For next gens, there is a clear opportunity here to educate and advise current family business leaders on how they can adapt and re-skill to embrace new technologies.”

Additionally, the vast majority of next gens see innovation as a core component, with 82% responding that innovation is very important or essential to business success. However only 15% of those polled see innovation being implemented well at their firms.

In the study, PwC identifies four main approaches next gens are taking to build their own paths to success: stewards, transformers, intrapreneurs, and entrepreneurs. Some next gens straddle more than one of these continually evolving paths, but they can provide a helpful way to separate the different challenges, risks and opportunities that the next generation faces, and how success can look and feel different depending on the route they choose to take.

  • 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

Sian Steele comments:

“70% of family businesses in the UK have members of the next generation working in the business. Whichever route a next gen chooses to take, succession planning is key to making their transition into leading the family business a success. The longer the whole businesses has to understand the process and adjust, the smoother the handover will be.”

Explore all of the study findings here.

Find out more about our Next Gen activities and network via our dedicated website here.

Sian Steele | Family Business Leader
Profile | Email | +44 (0)122 355 2226

 

 
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