family business press release

Press releases

Family business leaders still skeptical of business ecosystems, according to Deloitte study

Press Release

Monday 18th June 2018

A large majority of survey respondents agreed that business ecosystems enabled their family business to innovate beyond its individual capabilities, but old habits are hard to change.

Luxembourg, 18 May 2018: To thrive in today’s dynamic, complex business ecosystems, many family-owned businesses will need to shift their mindset to take a more expansive view of the kinds of business relationships they can use to drive value, according to a new study from the Deloitte Family Business Center: Next-generation family businesses: Exploring business ecosystems. The study showed that while most family-owned businesses view ecosystems as an opportunity for growth, they do not necessarily take any concrete actions to expand their own ecosystems by entering into alliances with other companies. This finding also applied to organizations whose leaders view themselves as more open to collaboration.

Ecosystems offer opportunities for innovation
A large majority (89 percent) of the 575 survey respondents from Luxembourg and 51 additional countries worldwide agreed that business ecosystems enabled their organization to innovate beyond its individual capabilities. Yet when asked about their actual participation in innovation projects, more than half (53 percent) said that they rarely or never cooperated with other organizations during the past three years, pointing to a lingering reluctance among at least some family-owned businesses to engage with external parties. Further, 32 percent of the global respondents said that their businesses would only work on new services and/or products with organizations with which they already had a long-standing relationship. Conversely, local results showed that the majority of Luxembourgish respondents displayed a more open mindset towards engaging with new organizations.
According to Georges Kioes, Family Business Leader at Deloitte Luxembourg, this result reflects his own experience: “Most family businesses indeed have a tendency to work and operate within a stable and well-known network of partners with a traditional emphasis on close and trustworthy business relationships. However, we also see a gradual change in the willingness among the younger generation of family business leaders here to explore new business ecosystems.”

Outward-facing mindset required
“In today’s business ecosystems with more fluid and diverse modes of interaction, the next-generation family business leaders will have to adopt a flexible, outward-facing mindset in regards to new types of business relationships if they want to exploit the opportunities offered by modern business ecosystems,” continues Kioes.

More than half of the survey respondents believed that they needed to change the approach of their business to collaboration, mergers and acquisitions (M&A), and alliances, either to some extent (53 percent) or substantially (17 percent). Georges Kioes then summarized: “The challenge for next-generation family business leaders in Luxembourg and elsewhere is to consider how their business model can work effectively in an evolving business ecosystem, without neglecting the history and traditions embedded within the family.”

To access the full report Next-generation family businesses: Exploring business ecosystems, go to: https://www2.deloitte.com/lu/en/pages/strategy/articles/next-generation-family-business-exploring-business-ecosystems.html

About Deloitte

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited ("DTTL"), its global network of member firms, and their related entities. DTTL (also referred to as "Deloitte Global") and each of its member firms are legally separate and independent entities. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.

Deloitte is a leading global provider of audit & assurance, consulting, financial advisory, risk advisory, tax and related services. Our network of member firms in more than 150 countries serves four out of five Fortune Global 500® companies. Learn how Deloitte's approximately 264,000 people make an impact that matters at www.deloitte.com.

About Deloitte in Luxembourg

In Luxembourg, Deloitte consists of 100 partners and over 2,200 employees and is amongst the leading professional service providers on the market. For over 65 years, Deloitte has delivered high added-value services to national and international clients. Our multidisciplinary teams consist of specialists from different sectors and guarantee harmonized quality services to our clients in their field. Deloitte General Services, société à responsabilité limitée, is an affiliate of the Luxembourg member firm of Deloitte Touche Tohmatsu Limited, one of the world’s leading networks of professional services firms.

Did you find this useful?