Long-term trends, driven by public policy and exponential rates of change in digital infrastructure, are fundamentally altering the global business environment. In this disruptive environment, family businesses need to challenge themselves – and this is an important responsibility for the next generation of family business leaders.
The next generation of family business leaders interviewed for our survey claim to be well-equipped to anticipate disruption, have a clear view about the direction of their industry, market and business, and understand the nature of disruptive change. However, 39 percent believe that their executive management has the right skills to thrive in a disruptive environment.
The biggest perceived challenges are internal rather than external, as they affect not only the business but also the family system: they are about internal organization, such as changing family relationships and leadership succession, more than about the markets in which the company operates.
Still, some 47 percent expect their markets to disrupt within the next 2-3 years, and around a quarter expect to lose market share to new entrants on their markets.
Family business challenges
When radical changes and disruption emerge, family businesses face different challenges to non-family businesses.
In particular family businesses benefit from independence and leeway. Their fast structures – including their autonomy based on the way most of them are financed – allow them to react quickly as conditions on the ground change. This is an immensely valuable asset in times of disruption.
On the other hand, family businesses also need to find methods to alleviate their weaknesses in a time of disruption, such as limited funding and resources.