Deloitte: Family-Owned Businesses Expect Disruptions Over Next Decade and Look to the Next-Gen for Brighter Future

-Over 25% of successors think they will lose market share to new entrants

23 May, 2017 - Of the next generation of leaders of family-owned businesses interviewed by Deloitte, 46% expects that the market in which they operate will face disruption in the next two to three years. 27% also expects to lose market share to new entrants. These are the results of Deloitte’s NextGen Survey.

Deloitte talked to 268 family-owned businesses and discussed specific challenges such as succession but also growth, strategy and the speed with markets change nowadays.

“The global economy is changing rapidly and fundamentally, due to the exponential speed of transformation in digital infrastructure, among other things. Quicker than ever, the past is being left behind—a tendency that in the perception of many goes against the tradition of family-owned businesses. That is why, especially now, it is important to listen to the leaders of the future,” says Walid Chiniara, partner and head of Family Enterprise Consulting practice, Deloitte, Middle East.

The next generation

The next generation of leaders of family-owned companies says they are well prepared to anticipate disruption. The survey and the conversations show that they have a clear picture of the direction in which their industry is moving and that they understand the nature of the disruptive forces in the market and in their company. They do indicate that they face two big challenges: the structure of leadership revolves too much around the family/management and there’s a lack of skills among staff to optimally perform in a disruptive environment (17% does not have the skills, 35% only partly has these skills).

Fast and agile

According to the next generation, the biggest disrupting factor for family-owned businesses is not market disruption (20%), but the changes in family relationships (24%). Succession is seen as the biggest disrupting factor by 14% of the interviewees. 73% states that succession is a natural moment of disruption.

The next generation is more aware of the meaning and effect of disruption than the previous generation. Interviewees indicate that the biggest advantage family-owned businesses have in times of disruption is that they are ‘fast’ and ‘agile’ when compared to other organizations. 

About the NextGen Survey

The NextGen Survey 2017 is a Deloitte initiative and was conducted by holding in-depth interviews with 268 successors of family-owned companies in the EMEA region (Europe, Middle East and Africa). Themes such as succession, disruption, growth and strategy were discussed. The survey was held from January to April 2017.