This year’s findings reveal that, while the threat of digital disruption is being felt by Senior Executives, many family firms lack robust strategies for the digital age.
The need to continually innovate came out as the biggest single challenge respondents see over the next five years with 54% of family businesses discussing digital disruption at board level.
Despite this, only half of all businesses recognise the importance of digital and 37% of the next generation say they struggle to get their business to understand the importance of having a digital strategy.
One of our 2nd generation firm family business respondents stated that “Family firms need to be able to break free from ‘success syndrome’ – if they aren’t open to change it can lead to complacency, arrogance, and an excessively internal focus.” Having the right leadership and culture are the most crucial ingredients for ensuring innovation is at the heart of strategic management.
While many Family Businesses have begun to use simple analytics based on MIS and reporting systems, we expect to see an increasing development of more descriptive and predictive analytics that combine internal and external structured together with unstructured data. This enhanced insight will enable Family Businesses to come up with the right strategies for growth in their business, operational efficiencies and effectiveness.
The question of security is an increasing concern both for family firms and their respective clientele. Wealthy families have always been ripe targets for cyber attacks and advancements in digital and technology have equipped criminals with new tools to operate. Family Businesses should be continually reviewing the protection they have in place to keep up with this pace of innovation, including threat and vulnerability assessments, contingency planning, data backups and network monitoring.
It is critical that Family Businesses provide training and guidance for both their employees and clientele on how to adopt a digital mindset and achieve greater levels of digital fluency. Our survey findings reveal that the older the participant, the less they knew about their digital strategy, and it is important that these clients be brought into the digital conversation. This can include digital collaboration, new forms of data usage and the efficiency of assembling new digital systems as opposed to coding from scratch. This will enable Family Businesses to take full advantage of new technologies and ways of working.
"So many people I meet, work with will say 'well actually I didn’t believe in digital strategy but now I’ve got one I would never be without one'"