Despite Australia’s next generation of family business leaders remaining more confident and better prepared for senior roles, they are facing more challenges than ever, according to a new report from PwC.
PwC’s global Next Generation Survey showed almost one third of the next generation think family businesses are slower than other types of businesses to keep up with new technology, and 40 per cent said they had experienced frustration trying to get new ideas accepted by family members.
“It’s understandable the current generation is cautious about making big investments in digital, considering how fast technology is changing. However, standing still is not an option,” said PwC’s head of family, business and wealth, Stuart Morley.
Despite the influence of technology, less than half of respondents noted that they had never discussed the threat of digital disruption at board level, with 72 per cent indicating that they do not believe that digital disruption poses a threat to their own business.
“Digital is playing a significant role in shaping the business environment. The trick for family businesses is to harness the unique qualities that make them different, such as ownership structures that allow decisions to be made for longer-term pay-off, and use this to their advantage,” Mr Morley said.
Succession planning was also examined within the survey, with 61 per cent of the next generation believing that there is a reluctance among the current generation to ‘let go’ of the reins.
“As the number of family members and in-laws grow, so too does the risk of misunderstanding and conflict. These challenges need to be considered early and regularly, and in a structured and consistent way,” said PwC’s executive chairman of family, business and wealth, David Smorgon.
“Succession planning is a process, not just an event. Only when the right structures and processes are in place, supported by regular and effective communication and the appropriate training and education, will the family give itself the best chance of continuity and harmony,” he concluded.
Publication date: 13 Apr 16
Source: Publicaccountant, Institute of Public Accountants