In new research from PwC, 65 per cent of next generation (NextGen) family business members say achieving business growth is a top priority. At the same time, nearly the same number, 64 per cent, say their family business has the opportunity to lead the way in sustainable business practices. More than half, 55 per cent, believe their family business puts sustainability at the heart of everything they do, while 71 per cent recognise their business has a responsibility to fight climate change and its related consequences.
PwC’s Global NextGen Survey 2022, surveyed over 1,000 NextGen members in family businesses, across 68 countries globally, to understand their key priorities and challenges.
While NextGens clearly see sustainable business practices as integral to long-term success, the Survey shows they may need to step up their engagement in the near term. Areas where NextGens say they are actively engaged at present include achieving business growth (59 per cent), ensuring the business is offering the right products and services (50 per cent) and adopting new technologies (44 per cent). Only 28 per cent say they are currently engaged in increasing the focus on sustainability and impact, though 72 per cent say they expect to be involved in it in the future. Similarly, just a quarter of NextGens say they are presently engaged in reducing their business’ environmental impact, where 65 per cent expect to be in the future.
Pandemic impacts NextGen family business participation
The COVID-19 pandemic was a double-edged sword for NexGen involvement in the family business. Close to half of respondents, 43 per cent, say they feel more committed to the business than they did prior to the pandemic and that they are now more involved in the business. More than half, 56 per cent, believe that communication between family members about the business increased during the pandemic. Yet the uncertainty created by the pandemic also appears to have made the current generation less likely to relinquish control and more difficult for NextGens to establish themselves. Only 28 per cent of NextGens say they are given significant internal operations to run, compared to 48 per cent in our 2019 survey; 32 per cent say they are used as a sounding board, down from 36 per cent in 2019; and 45 per cent find it difficult to prove themselves as a new leader or board member.
Reluctance of the current generation to retire poses a particular challenge for NextGens, according to 57 per cent of those surveyed. Further, 39 per cent of the NextGens say there is resistance within the business to embrace change.
A very positive development for NextGens and family business in general is that 61 per cent say the family has a succession plan and 39 per cent of NextGens say they were involved in its development.
NextGens bring fresh perspective
PwC also recently surveyed the current generation of family business owners, and, while they see eye to eye with NextGens in a lot of areas, there are some notable differences. Both generations are focused on growth, but only half of the current generation believe their business has a responsibility to fight climate change and its consequences, compared to the nearly three-quarters of NextGens. There is also a bit of a digital divide between the generations.
Family business can better empower women NextGens
Far fewer of the women NextGens surveyed, 43 per cent, are in leadership roles than are the male respondents, 59 per cent. Not surprisingly perhaps, fewer women, 66 per cent, have a clear idea about their personal ambitions for a future role in the family business, as compared to men NextGens, 79 per cent. Moreover, for the top-ranked priority area of achieving business growth, just half of women, 53 per cent, say they are actively engaged, compared to 69 per cent of men. Women play a relatively active role, compared to men, in areas including improving working conditions (44-46 per cent), increasing the focus on investments for sustainability and impact (33-29 per cent) and reducing the organisations’ environmental impact (27-26 per cent) but there is the opportunity for women to play a larger role in many of the key priority areas.