Family businesses are successful primarily because they care about the long-term perspective. They are often connected to local communities and their staff is loyal. Usually such businesses are relatively small, which means they may experience problems when seeking top talents or credit. This might explain why only 12% of family businesses still stay in the family three generations after they were founded. No less than 88% of successors-to-be know that they will have to fight hard in order to win the trust of their employees and customers. They know that a good brand and name is not enough for new customers. This is shown by a study conducted by the PricewaterhouseCoopers company entitled Bridging the gap: Handing over the family business to the next generation. It was published in April 2014 and based on 207 interviews conducted in 21 states around the world.
New technology and organisational changes
Altogether 86% of future successors are planning to realise substantial changes. Often they admit there will be some job losses. The younger generation wants to utilise more social networking sites and invest in modern technologies. Organisational changes are also expected because the new generation feels the need for a higher level of professionalism. Training and development planning will be key tools for achieving this goal.
New bosses want to achieve higher growth
Nearly half of those who are to take over a family business are graduates from business or management schools. They want to improve financial planning and budgeting, modernise IT systems and improve the style of management and reporting.
Communication is of the essence
A successful takeover requires years of advance planning. Internal conflicts full of emotions are common in family businesses; thus it is essential to define clearly mutual expectations regarding the roles the new generation should have. When founders want to pass on their business, things often go wrong because the younger generation wants to pursue a different path. Family businesses are strong as far as external pressures are concerned but are often ruined by internal conflicts.
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