When I speak with the leaders of successful family enterprises, each discussion usually begins with a focus on one specific issue or challenge. For instance, I’ve had leaders start conversations with statements such as:
“We are having a lot of conflict in our family trying to figure out what is fair for everyone in the future when it comes to the leadership of the family business. We just can’t seem to sit down and talk it out.”
“The next generation in our family is ready to take on far more responsibility and to make the changes necessary for the future of the business, but we can’t get my father/mother to agree.”
“I don’t think my children are well prepared for the significant responsibilities and wealth that will be coming to them in the future and I’m worried about them.”
More often than not, by the end of our initial conversation, that one particular issue has snowballed into a more complex web of concerns—often with high degrees of stress, anxiety and emotion thrown into the mix. This is understandable as owners want both what’s best for their business and what’s best for their family—all while creating a legacy they can pass along to future generations.
In my previous post, I spoke to how our Family Enterprise team is working with family businesses to navigate these very uncertain times. The challenge for many of the families I work with is that navigating this ongoing state of uncertainty is only heightening their awareness of other critical issues—like how to adapt, how to achieve a sense of business continuity and how to get succession right. These enterprising families are feeling immense pressure to get everything correct. Why? Because for them, it’s never just about business. It’s about so much more than that. It’s personal.
In a world where the business of family enterprise is only becoming more complex, it’s important to embrace a multifaceted approach to providing advisory support for each family. In this post, I’ll explain why.
Almost every business today has struggled with the rapid evolution of technology, the rise of digitally enabled competitors, the ongoing shift in talent and skills requirements and the need to manage their leadership succession. The sudden shift in consumer behaviours and the acceleration of digital trends experienced over the past eight months have only exacerbated these challenges.
The one thing that sets family businesses apart from other businesses is that one key word: family. But this differentiating element can either provide the business with a strong foundation for the future or present a host of formidable challenges. In addition to dealing with a diversity of other business issues, the owners, Next Gens and other stakeholders in a family business have the added pressures of living up to their family legacy and needing to create additional wealth to sustain future generations.
No one wants to be responsible for a long-standing family business turning in the wrong direction, or the erosion of a family empire. This pressure only increases the stress and anxiety associated with making critical investment decisions, operating decisions and governance decisions—particularly when family members are at loggerheads.
At PwC Canada, our team has forged incredible working relationships with many of Canada’s notable family businesses. But in recent years, we’ve noticed that the needs of these family enterprises are evolving well beyond the traditional scope.
In addition to their operating company needs and their wealth management needs, many are now also dealing with transformation conundrums. The business world is evolving, innovations are changing what family businesses do and how they do it, the next generation has different desires and the skill-sets needed to help businesses thrive are vastly different than they were in the past. Family businesses are increasingly looking for advice on how best to tackle these complex—and highly interconnected—challenges.
The intersection between family, business and ownership can be complex, but the balance between them is critical in order for family businesses to succeed and thrive. My colleague, Elisabeth Finch, recently explored the interconnectedness of these three family enterprise considerations in a recent article: 3 relationships to strengthen the health of your family business.
Our fulsome approach is possible because of our extensive network and competency areas. When working with owners of family businesses, we can leverage the skills and knowledge of a wide range of experts in all areas of business—from international tax advisory and charitable and philanthropic endeavours to talent development and communications.
Looking forward, there is no end in sight to the rapid amount of change occurring within family businesses in Canada. Over the next few years, 70% of family business owners are expected to sell or pass on their businesses. Given family businesses account for CA$1.3 trillion of Canada’s GDP, this isn’t an insignificant percentage.
In our uncertain world, it’s not easy choosing the right path to maintain and build your legacy. When we work with family enterprise leaders, we want to help them understand and manage ownership and growth at every stage by providing support when it is needed on their journey – from family governance, succession planning and business continuity to next generation education and transition, wealth management, values and more.
In future blog posts, we’ll delve into several specific challenges unique to family businesses. In the meantime, visit our Family Enterprise Services page to explore our approach and how we can best help your family.