Family businesses should seek to maximise the competitive advantage that comes from their strong values-led culture, according to PwC’s Global Family Business Survey 2018.
This year’s survey saw family business leaders globally reporting robust health, with levels of growth at their highest level since 2007. Revenues are expected to continue growing for the vast majority of businesses (84%), with 16% saying it will be “quick” and “aggressive”.
Regionally businesses in the Middle East and Africa were the most optimistic, with 28% expecting aggressive growth. They are followed by those in Asia Pacific (24%), Eastern Europe (17%), North America (16%), Central/South America (12%) and Western Europe (11%).
First-generation family businesses clearly outperform those run by subsequent generations in their ability to achieve double-digit growth, highlighting the need to balance business model continuity with an appetite for disruption.
The top three challenges cited by family businesses are innovation (66%), accessing the right skills and capabilities (60%) and digitalisation (44%). Indeed, 80% see digitalisation, innovation and technology ranked together as a significant challenge.
Most strikingly, the 2018 edition of the survey demonstrates a link between putting values at the heart of strategic planning and strong growth prospects. While 75% of family businesses believe their stronger culture and values gives them an advantage over non-family businesses, less than half (49%) of respondents have those values articulated in written form.
Among those family businesses reporting double-digit annual growth, 53% were able to point towards a codified set of values. This reflects the increasing emphasis needed on integrating business ownership strategies and family business growth strategies.
The PwC Family Business Survey also contains insights into how the pace of technology change and generational differences are informing family businesses’ approach to legacy and succession planning.
Director - Marketing & Communications, PwC Cyprus