of next gens think their family business has a strategy fit for the digital age
of next gens have big plans about taking the business forward
of next gens think innovation is key but only 15% think their own firm has a clear plan
of next gens struggle to get the current gen to give serious attention to their ideas
In 2016, we published, Great Expectations: The Next Generation of Family Business Leaders, hearing from the next generation about their ambitions, their challenges, and the future – both their own and their firm’s. This year, we dig deeper into these issues to understand how next gens are tackling key issues to ensure success: digital, innovation, social impact and professionalisation.
Everything we’ve learned about next gens - both from this year’s interviews and our experience in working with them - tells us the same thing: they have a clear vision of the future of their family business, and strong ideas about how to get there. This holds true whether they are inside the family firm looking out, or outside the family firm looking in.
Their own experience and education mean they assign particular importance to areas like digitisation, innovation, and professionalisation, and their global outlook makes them keen to diversify, whether in terms of products, markets, or ways of working.
The common denominator is strategic direction: the need for a compelling corporate strategy and practical execution plan for both the short and medium term. This ties in with themes in the 2016 Family Business Survey: the prevalence of a ‘missing middle’ in the strategy of many family firms. Many have effective short-term business plans, and a long-term vision that is measured in generations; it’s the five to ten-year period that is not being adequately addressed.
Fortunately, the next gen priorities align strongly with medium-term strategic thinking. This bodes well for family firms as a whole if the current generation recognise the skills, drive and experience of the next gen to drive the business forward.
From our extensive work with family firms across the world, we see four main approaches that next gen are taking to build their own paths to success. These paths do, of course, evolve, and some next gens straddle more than one.
Likewise there is no ‘right’ way: all four are routes to success and many will move between them during their careers.
But these are nonetheless a helpful way to separate the different challenges, risks and opportunities faced by the next generation, and how ‘success’ can look and feel very different depending on the route they choose to take.
It can also open up new ideas and possibilities and highlights options for different ways of building a path for the future.
“Stewards” lean towards following a conventional family business career path, training, studying and preparing themselves to keep the firm profitable and professionally managed.
Pg 13 of 80; PDF, 3.2mb
“Transformers” focus on innovation and reinvention of the family business. They rely both on their own talent, as well as support from the current gen.
Pg 21 of 80; PDF, 3.2mb
“Intrapreneurs” also have transformative ideas, but they choose to carve out a specific venture within the firm, rather than overhaul the entire business. These new ventures can look and feel like a start-up, but they still enjoy the secure support and funding of an established family business.
Pg 30 of 80; PDF, 3.2mb
"Entrepreneurs" make a clean break from the family business to start their own ventures.
Pg 38 of 80; PDF, 3.2mb
“When I came into the business I asked the question, 'Where am I going to be in five, ten, fifteen, twenty years' time?' but no-one in the older generation could answer me. I need to see what am I working towards and where am I going.”
As we talked to next gens and looked at the four the paths next generation are pursuing, it is also clear that there are a set of common success factors whichever path they pursue. This is what we refer to as the ‘five Cs’.
Pg 65 of 80; PDF, 3.2mb
We asked our next gen poll respondents what advice they would give to other next gens as they prepare to ‘go their own way’.
Pg 72 of 80; PDF, 3.2mb
We spoke to Kaushal Dugar of Teabox, Christina Sorbara, of The Sorbara Group of Companies and Arjun Jindal of Machino Polymers Ltd., to find out how they are tackling some of the key issues faced by next gen leaders.
“The tea industry has run the same way for 150 years, and the attitude has been if it’s not broken, why fix it? - going my own way"
"I want to be part of shaping the future growth of the company for the next generation"
“Preparation starts from when you are born. I've been going to office with my grandfather for as long as I can remember.”
Global Leader - Entrepreneurial & Private Business, PwC Australia
Tel: +61 3 8603 3183
Global Next Gen Club Lead, PwC UK
Tel: +44 (0) 207 213 1214