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Family-owned businesses expect disruptions over next decade and look to the Next-Gen for brighter future
Over 25% of successors think they will lose market share to new entrants
23 May, 2017 – Of the next generation of leaders of family-owned businesses interviewed by Deloitte, 46% expects that the market in which they operate will face disruption in the next two to three years. 27% also expects to lose market share to new entrants. These are the results of Deloitte’s NextGen Survey.
Deloitte talked to 268 family-owned businesses and discussed specific challenges such as succession but also growth, strategy and the speed with markets change nowadays.
“The global economy is changing rapidly and fundamentally, due to the exponential speed of transformation in digital infrastructure, among other things. 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,” says Walid Chiniara, partner and head of Family Enterprise Consulting practice, Deloitte, Middle East.
The next generation
The next generation of leaders of family-owned companies says they are well prepared to anticipate disruption. The survey and the conversations show that they have a clear picture of the direction in which their industry is moving and that they understand the nature of the disruptive forces in the market and in their company. They do indicate that 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% does not have the skills, 35% only partly has these skills).
Fast and agile
According to the next generation, the biggest disrupting factor for family-owned businesses is not market disruption (20%), but the changes in family relationships (24%). Succession is seen as the biggest disrupting factor by 14% of the interviewees. 73% states that succession is a natural moment of disruption.
The next generation is more aware of the meaning and effect of disruption than the previous generation. Interviewees indicate that the biggest advantage family-owned businesses have in times of disruption is that they are ‘fast’ and ‘agile’ when compared to other organizations.
About the NextGen Survey
The NextGen Survey 2017 is a Deloitte initiative and was conducted by holding in-depth interviews with 268 successors of family-owned companies in the EMEA region (Europe, Middle East and Africa). Themes such as succession, disruption, growth and strategy were discussed. The survey was held from January to April 2017.
To view the results of the survey, go to: http://bit.ly/2qPBeru
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About Deloitte & Touche (M.E.):
Deloitte & Touche (M.E.) is a member firm of Deloitte Touche Tohmatsu Limited (DTTL) and is a leading professional services firm established in the Middle East region with uninterrupted presence since 1926.
Deloitte provides audit, tax, consulting, and financial advisory services through 26 offices in 15 countries with more than 3,300 partners, directors and staff. It is a Tier 1 Tax advisor in the GCC region since 2010 (according to the International Tax Review World Tax Rankings). It has also received numerous awards in the last few years which include best employer in the Middle East, best consulting firm, the Middle East Training & Development Excellence Award by the Institute of Chartered Accountants in England and Wales (ICAEW), as well as the best CSR integrated organization.