Despite economic uncertainty, almost two thirds (64 percent) of family businesses have grown over the past year, according to a new global survey conducted by PwC, one of the world’s leading professional services firms,of over 2,800 family businesses in 50 countries.
While the region’s family businesses continue to be active and successful, the changing political and economic environment is affecting both their current performance and their growth expectations, according to PwC Middle East’s latest Family Business Survey.
Respondents to the PwC Middle East Survey said that the three most significant challenges faced by their family firms are: government policy, legislation and regulation (42 percent), skills shortages (35 percent), and market conditions (31 percnet).
Despite the relatively steady outlook, the report warns that family businesses’ growth outlook could be curtailed by the organisation’s own lack of strategic planning rather than economic factors or other external concerns.
In fact, many issues now facing family businesses in the region come back to a lack of strategic planning – the ‘missing middle’ – namely having a strategic plan that links where the business is now to the long-term and where it could be. This results in many families not being able to turn early promise into sustainable success.
While some family firms are managing strategic planning well, many are caught between the deluge of everyday issues and the weight of inter-generational expectations.
PwC found that in the survey, areas such as succession, diversification, digital, cyber security, and innovation, are not being tackled by family firms in the Middle East but also globally.While respondents in the Middle East agree with their global peers about the qualities that characterise a family firm, there are several other factors that have an added importance.
For example, more respondents in the region believe that family businesses take a longer term approach to their decision-making (61 percnet compared to 55 percent globally), and are prepared to take more risks (58 percnet versus 40 percent).
