In my everyday work, I’m in constant contact with the owners and leaders of many private and family businesses. As we make our way beyond the pandemic in the future, these conversations give me a great first-hand perspective on how they’re looking to drive their companies forward.
What steps are they taking? Two stand out in particular. First, they’re rethinking the composition of their boards, seeking greater diversity in all dimensions – gender, age, culture – and a wider range of views. For example, instead of appointing retired executives from their own industry, they’re looking for younger people with experience in other sectors, including relevant expertise gained on specific projects like ESG programs.
Second, even mid-sized private businesses are now setting up venture arms of the type that were once the preserve of large corporations. Their goal: to get access to ground-breaking innovation and technology capabilities, including through collaboration with startups.
The common thread? In making these moves, private business leaders are recognising that doing more of the same – and relying on what’s worked in the past – won’t necessarily work in the future. They know they need to look at today’s new challenges with fresh eyes. And to harness new technologies to address them and sharpen their competitive edge.
These actions spring to mind when I look at the findings from PwC’s inaugural 2021 EMEA Private Business Heatmap.
At the heart of the Heatmap scoring is the fact that the enabling environment for private businesses in any jurisdiction is determined by a wide array of factors. From the legal, tax and regulatory regime to the quality of digital infrastructure, and from the level of corruption to the standard of transport links, a combination of myriad elements influences private businesses’ ability to thrive in a particular place.
What’s more, unlike multinational corporations, most private businesses can’t simply relocate elsewhere if they don’t like the jurisdiction where they’re based. They just have to deal with its shortcomings. And in the wake of the pandemic, the relative weighting of the factors that make up a positive enabling environment has changed: witness the higher importance today of health systems, social and environmental sustainability, and digital engagement with customers, business partners and employees – especially those working remotely.
These are just some of the challenges private businesses in every jurisdiction now face. But how to address them?
Here I’d like to draw on Beyond Digital, a book written recently by two of my PwC colleagues, Paul Leinwand and Mahadeva Matt Mani. Based on years of in-depth research, the authors describe how twelve iconic companies have radically reimagined and transformed their business models. And they highlight an emerging set of leadership imperatives that I believe provide a powerful blueprint for private businesses.
I’d like to single out three that I feel are especially pivotal for private businesses – and resonate strongly with the actions many are now taking:
A vital enabler for all three of these imperatives – and, as you’ll have noticed, a recurrent theme throughout this blog – is smart and focused use of technology. Gone are the days when a Chief Executive Officer (CEO) could simply leave the application of Information Technology (IT) to the Chief Information Officer (CIO). Today, technology is a pervasive force that drives and sustains the competitiveness of any business. And since technology never stands still, leaders must ensure they keep pace with it and understand what the latest innovations can bring to their business.
If you’d like to discuss any of the insights in this blog, please get in touch – we’d love to hear from you.
Global Family Business and EMEA Entrepreneurial and Private Business Leader, Partner, PwC Germany