14 June, 2016 – A new generation of
young, highly motivated and mostly well-educated men and women is
ready to take over leadership of their family businesses, according
Deloitte's latest report conducted across the Europe,
Middle East and Africa region entitled "Next-generation family businesses
Evolution, keeping family values alive." They are resolute
and ready to face the challenges ahead in order to maintain the
family character of the business and keep the family values alive.
They want to grow the company in a rapidly changing economic and
business environment, and to retain independence of ownership,
though 40% of respondents do not rule out the possibility of
The new Deloitte survey was conducted across the Europe, Middle
East and Africa region and its findings are not region specific.
"This is extremely refreshing; it suggests that we are aligned
across the world and that the next generation will have their
international counterparts to work with and build the future."
explains Walid Chiniara, partner and
Deloitte Private Leader in the Middle East.
According to the report, the next generation family business
leaders intend to make changes when they take over. 80 percent say
that their leadership style will be different compared to the
previous generation, 56 percent will change the family
company's strategy, 56 percent will change corporate governance
structures, and 51 percent intend to take more risks than their
predecessors did, but in a more controlled way.
"In this light, it is a positive sign that a healthy 32
percent of next generation leaders confirm having been groomed to
take on leadership roles since their early childhood years.
However, it remains that 64 percent still do not have a written
succession plan in place," commented Chiniara. "That
being said, it must be noted that the number of family businesses
that have written succession plans in place has increased
dramatically (16 percent) from a decade ago."
Other key findings of the report include:
Innovation and risk.
Contrary to the common view, family businesses are not risk-averse
and are willing to innovate, with innovation being a top 3 priority
for 76 percent of respondents. The challenge for the next
generation, however, is to convince their family members of the
importance of innovation. According to the report, 61 percent of
the previous generation of family members are well aware of the
need for innovation, out of which only 40 percent are willing to
take on the associated risk.
control. Although more than 50 percent next generation
leaders expect to change the governance structures within their
businesses, maintaining business ownership and control within the
family remains a top priority. Reasons attributed for the need to
change governance arrangements include amongst others, the need to
bring in knowledge and experience from non-family members
suggesting an openness to invite non-family members to join the
board of directors.
areas. The investment areas over the next five years for
the next generation of family businesses include the following:
Expansion, whether in geographical markets or in products and
services; Innovation and research & development; and
Accelerated use of new technology in the business.
"The next generation of family members are the future of
our economy, and our findings show that we have good reason to be
optimistic and upbeat," concluded Chiniara.
About the NextGen Survey
The EMEA Next Generation Survey 2016 is an initiative of
Deloitte. Between January and April 2016, 92 in-depth and
face-to-face interviews were conducted in 19 countries in EMEA
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