As we enter the new decade family businesses have a world of opportunity in front of them but need to take stock and act accordingly.
The world is changing so it is important for family business owners/leaders to recognise that things are changing and to consider the impact that these may have on their businesses, this week, this year and in the years that lie ahead. Those that take a long term strategic view, and the emphasis is clearly on strategic, will undoubtedly be better placed to survive and thrive for generations to come.
The CEO of tomorrow’s family firms will need different skills to the CEO of today and ‘yesteryear’ and whilst it is an obvious statement to make, time needs to be give to addressing the future skill needs of the next generation of leaders so that they can gain the skills now, and not be playing catch up later on.
Obviously the past couple of years have been tricky with economic and political uncertainty in abundance, and to a certain extent this will prevail whilst key macro decisions are being taken and implemented. But there are other changes taking place that should be on the family business radar, if they are not already. Climate change and sustainability, sustainable business goals, globalisation and the rise of the millennial generation continue to fill the media pages and these are just some of the signs of things to come. The High Street is suffering and the retail sector is changing almost daily, shopping habits continue to evolve and the continued growth of ‘home shopping’ is seriously affecting many family firms too.
Add to the mix the inherent pace of change with technology and the rise of AI and robotics and things that may have been ‘out of reach’ may become game changers going forward. Consider the impact of new ways of doing things and the impact these may have, the role of drones, driverless vehicles and the like and how the family firm may need to adapt.
Families also have to address the role of social media and the impact on their businesses or ‘real time’ marketing, brand voice and messaging and how this may impact on their business and customer engagement going forward – not easy by any means and something that some find a lot harder than others, but social media is here to stay and will need to be part of an ongoing communications plan for all family businesses to explore and address.
The family business world is also facing changes to the very nature of the family firms as more and more families are approaching key stages in the transition of their business to the next generation and notoriously over the years succession planning and such transitions have been difficult and trying times for many. Given the rate of change in the world at large, the worlds in which family firms operate, time needs to be used wisely and not spent focusing on internal matters.
There is also the need for the right people and with a near fully employed workforce, recruiting and retaining the right people to meet the ongoing and future needs of the business will become even more critical but families have the benefit of their history and heritage that can come to bear in this regard. Research suggests that people are attracted to family firms with the right roles, opportunities for growth and empowerment to do their job so by their very nature, family firms can have an advantage when it comes to finding the right people with the right skills going forward.
Communication is also key. Open and honest conversations underpin the very essence of family businesses and families and their broader management team are encouraged to take time to reflect on where their journey is taking them, considering what is the purpose of the business and where their journey is going to end up. Collective, shared vision and purpose is essential as family firms continue to embrace the changing world around them as is the need for clear communication within a family and within the family firm, empowering boards, management teams and employees to contribute to the underlying goals and ambitions of the family.
Family firms that have already survived for generations prove that longevity is possible and that with the right governance frameworks, strategies and conversations, plans can be put in place to continue to thrive. But it is not always easy and there is also a need from time to time to step back and look at the business going forward and take stock of some of the ‘bigger picture’ challenges that may also be serious opportunities for the family business too.
The pace of change currently is fast but as a result family firms face opportunities as well as challenges. Family firms that will be successful going forward will be responsive to the opportunities present and deal with the challenges head on. One of the keys is taking the time to think of what the real challenges are and to plan for them appropriately. The next generation have different skills and can be of great value in developing new approaches and embracing new technologies and develop new approaches too so the need for conversations between the generations is crucial to assist the development of the right plan for the business.
There are also pressures from regulatory bodies too and the need to ensure compliance with the changing nature of regulations, not least the corporate governance reporting that all private businesses need to have taken on board to some extent as well.
The world is changing but family businesses have the opportunity to once again rise to the challenge but need to take the long term view and plan. As always there is a lot on the family business agenda but thinking strategically about the business and removing the barriers to take time out to work on the business rather than in the business is essential for long term success.
As we enter the new decade, family firms should be encouraged to take stock and spend some time on their strategic vision and plans for the business, and all that entails, to help them move on with the next stage in their family business journey too. Time is something that is often in short supply but when it comes to the family business and plans for the future, finding time to think about the future will undoubtedly be time well spent.