Lagos, 22 May 2019 - Family businesses should seek to maximise the competitive advantage that comes from their strong values-led culture. This is according to the Nigerian report of PwC’s 2018 Family Business Survey launched today in Lagos.
The Family Business Survey is a global market survey among key decision makers in family businesses within a number of PwC's key territories. The goal of the survey is to get an understanding of what family businesses are thinking on the key issues of the day.
This year’s report with the theme “Building a lasting competitive advantage through your values and purpose in a digital age” saw family business leaders globally reporting robust health, with levels of growth at their highest level since 2007.
Regionally businesses in the Middle East and Africa were the most optimistic, with 28% expecting aggressive growth. They are followed by those in Asia Pacific (24%), Eastern Europe (17%), North America (16%), Central/South America (12%) and Western Europe (11%).
Growth among Nigerian family businesses over the last 12 months is lower than the global average with only 53% reporting growth in the last 12 months against 69% globally. However, 87% expect to grow over the next two years with 40% saying growth will be quick and aggressive against 16% globally.
The top three challenges cited by Nigerian family businesses as militating the personal and business goals are economic environment (70%), corruption (67%) and regulation (57%). Corruption which PwC estimates could cost up to 37% of Nigeria’s GDP by 2030 if unchecked, is associated with lower investment, higher prices as well as barriers of entry for businesses.
Most strikingly, the 2018 edition of the survey demonstrates a link between putting values at the heart of strategic planning and strong growth prospects. While 67% of Nigerian family businesses have a clear sense of agreed values and purpose as a company, less than half (43%) of respondents have those values articulated in written form.
Uyi Akpata, Country Senior Partner, PwC Nigeria says:
“The message is clear: adopting an active stance towards company values generates practices that pay off in real terms. A commitment to a clearly defined set of values can act as an ‘inner compass’ and provide a competitive edge for a family business as it navigates the challenges of technological and competitive disruption.”
“What this survey clearly indicates, however, is that family business values are not simply the same as family values. Business values should be clearly defined and articulated, but also strongly embedded in the business culture and the day-to-day decision-making regularly reviewed.”
The PwC Family Business Survey also contains insights into how the pace of technology change and generational differences are informing family businesses’ approach to legacy and succession planning.
Esiri Agbeyi, Partner and Head Private Wealth Services, PwC Nigeria says:
“A key take away from our findings is that there is an opportunity for family business owners that are committed to and adhere to a deep sense of social responsibility and sustainability to invest their resources in a manner that is consistent with their values.
“Also, the next generation is key to a family business’ lasting legacy and not involving them in plans to pass on the business risks disengagement. It’s crucial to have a written and documented plan for the continuity of the business to improve transparency and trust. The next generation need time to build a collective sense of purpose and be supported in developing their own framework for success.”
“Our conversations with family businesses show that often they recognise the need to start the process, but those conversations can be difficult. Timing is crucial and so is communication to all stakeholders.”
The report was presented at a well-attended event which held at the Metropolitan Club, Lagos and had in attendance many top business leaders including Chief JK Randle, Dr ABC Orjiako, Chairman, Seplat, Mrs Udo Okonjo CEO Fine and Country, Mr Oscar Onyema, DG of the Nigeria stock Exchange among others.
Senior Manager/Head Marketing & Communication, PwC Nigeria
Tel: +234 1 271 1700