Successors to family businesses want to continue the success stories of their respective companies—but on their own terms: 88 percent of the next generation see themselves not merely as stewards of their legacy, but as its architects. They view the challenges that come with this aspiration with confidence: 91 percent are optimistic about the upcoming generational transition in their companies; they feel well-prepared and possess the necessary ambition. Tomorrow’s decision-makers want to explore new markets, business areas, and strategies. These are some of the findings from the international study “Great Expectations: The Next Generation of Family Business Leaders” by the auditing and consulting firm PwC.
Conflicts Over Succession in Family Businesses?
However, no generational transition proceeds entirely without generational conflicts; in particular, the handover of the business can become a difficult task—for both sides. Accordingly, 52 percent of successors are concerned that they will have to spend too much time resolving internal family issues. Sixty-one percent believe that it is difficult for the older generation to let go and step back from the business. Another current point of conflict between the generations is digital transformation. Only 41 percent of successors are convinced that their digital strategy optimally supports the business model. Twenty-nine percent confirm that family businesses are more hesitant to take advantage of technological opportunities than other corporations. Consequently, 40 percent sometimes feel frustrated when it comes to convincing their parents’ generation of new ideas. “When it comes to digitalization, the older generation of entrepreneurs should allow themselves to be persuaded by the younger generation,” says Dr. Peter Bartels, a member of PwC’s Executive Board and head of the Family Businesses and SMEs division. “Technological developments will fundamentally transform the business world over the next five years. Eighty-three percent of the next generation of family business leaders also expect this to happen.”
Christian Weber, CEO of Karlsberg Brewery, shares this view. In the study, he describes his path to the top of the family business. Weber sees the great opportunity that digital transformation presents for his long-established company in improved communication and predictability: “How can we succeed in supplying the restaurateurs of the future even before they place an order?” For the CEO, an environment that fosters innovation is the key to a company’s competitiveness.
Gaining Experience Outside the Family Business
A solid education and the ability to think outside the box are important to the next generation of entrepreneurs. Accordingly, 70 percent first work at another company before taking on a role in the family business.
But for the next generation, it’s not just about their own expertise. For them, having a well-educated workforce overall is important. 74 percent of respondents cite this factor as a top priority. This includes, for example, greater support for women. A breakdown of the survey results for the 73 female successors surveyed shows that only 30 percent of them are members of the executive board of their family business—compared to 55 percent of male successors. In addition, the next generation is relying on outside expertise: 69 percent would like to hire external managers. Three-quarters of family businesses want to expand their technical expertise in this way, while about half aim to professionalize the company and drive growth. Ninety percent of the family businesses surveyed are satisfied with this collaboration.
