Successors of family-owned businesses expect disruption but lack skills
Over 25% of successors think they will lose market share to new entrants
22 May 2017
Of the next generation of leaders of family-owned businesses interviewed by Deloitte, 47% expect the market in which they operate to face disruption in the next two to three years. 27% also expect to lose market share to new entrants. However, 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%). These are the results of Deloitte’s NextGen Survey.
Deloitte talked to over 250 family-owned businesses across the EMEA region and discussed specific challenges such as succession but also growth, strategy and the speed with which 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 Mennolt Beelen, leader of EMEA Family Business with Deloitte.
The next generation
The next generation of leaders of family-owned companies say 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% do not have the skills, 35% only partly have these skills).
Fast and agile
The next generation is more aware of the meaning and effect of disruption than the previous generation. Interviewees indicated that the biggest advantage family-owned businesses have in times of disruption is that they are ‘fast’ and ‘agile’ when compared to other organisations. 73% state that succession is a natural moment of disruption.
Notes to editors
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 conducted between January and April 2017.
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
The information contained in this press release is correct at the time of going to press.
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