The release of the ninth PwC Global Family Business Survey comes at a time of extraordinary transformation. Digital technology is disrupting whole industries; sustainability is becoming central to the conduct of business; in the corporate and financial worlds, winning trust is more important than it’s ever been; and millennials represent an enduring demographic change.
We believe that family businesses – often built around strong values and with an aspirational purpose in mind – have a competitive advantage at a time like this.
They are trusted more than non-family businesses by a 16-point margin globally, according to a special report in the 2017 Edelman Trust Barometer. And it’s long been recognised that a family firm – ranging from a global enterprise to a business in a small community – is more likely than other companies to treat each day’s activity as an investment in the long term, prioritising broad stakeholder interests over satisfying the quarterly earnings cycle.
Yet one consistent finding since we started this biannual survey in 2002 is that many family businesses are not yet turning these inherent advantages into a winning strategy to help secure profitable, long-term legacies. This latest survey suggests there is a great opportunity here. Indeed, a healthy 75% of our survey respondents felt that having a clear set of values created a competitive advantage.
There was also evidence that businesses with annual growth of 10% or more tended to be those with a clear sense of agreed values and purpose. This plays into legacy in an important way. Family businesses are being propelled towards a vastly different landscape. The strategies that worked well in the past might not be sufficient to sustain their businesses in the future. How can family businesses harness the legacies of the past and strive for strategic renewal, using their values as a key differentiator? And how should the next generation play a role in tackling digital disruption while preserving the values of the business?
There is an enormous opportunity for family businesses to start generating real gains from their values and purpose by adopting an active approach that turns these into their most valuable asset. No global survey of the health of family business in 2018 would be complete without looking at the challenge of digitalisation. There was a marked jump since our last survey (2016) in the number of businesses feeling vulnerable to digital disruption – a trend highlighted in PwC’s latest annual flagship CEO Survey as well.
Many family business leaders recognise the digital challenge, and many are preparing for it. But there’s a real opportunity to boost engagement in the digital realm by enlisting the help of the next generation.
Overall, our respondents expressed enormous optimism about future growth but also increasing concern about changing business models, digitalisation, cybersecurity, regulation and protectionism. They are thinking carefully about innovation and attracting and keeping the right talent for their business. This suggests that there’s never been a more pressing time to get the fundamentals right.
For this year’s report, we surveyed 2,953 companies in 53 territories, covering a wide range of sectors, from agriculture to technology. We would like to thank the respondents for taking the time to participate. We were also privileged to speak with leaders at 10 of the world’s most prestigious and successful global family businesses. We would like to express our sincere thanks to them for being so generous with their time and insights.
We hope you’ll find the report valuable and that its insights will help you make better decisions for your family business.
Download and read the full report below:
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