To protect the family business legacies, PwC has recommended the adoption of the next generation (NEXTGEN), saying families are upskilling the younger generation to institutionalise their organisations.
This was contained in PwC’s 10th global bi-annual survey of family businesses, which revealed the current thinking and outlook of 2801 family business leaders across 87 territories including Nigeria.
PwC noted that the NextGen are the ones to bring in a more evidence-based approach both for the business and philanthropy as well as leverage technology and digital trends, saying the time to act is now if family businesses would keep their legacy for future generations.
It noted that family businesses were essential to the success of the global economy, responsible for half of the global gross domestic product (GDP) and employment.
“The largest 750 alone have combined revenues of $9 trillion a year and employ more than 30 million people. They helped the world reboot after the financial crisis; they need to be strong to do it again after COVID-19 and provide the legacy they want.
“It will surprise no one that family business is the most trusted form of business (Edelman trust barometer – 2019 family business 67 per cent vs. publicly owned 58 per cent). That they have been more resilient may come as a surprise to those outside family businesses.
“Only 21 per cent needed to seek outside capital to weather the pandemic in 2020. The survey suggests that family businesses have weathered the pandemic relatively well.”
The report noted that the key priorities facing Nigerian family businesses are somewhat different from the global trends, which reflects the market condition.
It noted that over the next two years Nigerian family businesses are introducing new products/services, rethinking/changing/adapting their business models, expanding into new markets/client segments, improving digital capabilities and increasing the use of new technologies.
“This means whole scale transformations are the order of the day. However, they could benefit by thinking strategically. This could include: finding new markets for existing products. A better understanding of how the African Continental Free Trade Area (AfCFTA) agreement can help.
“Radically rethinking business models – for instance how can we serve international clients using Nigerian brains sitting in Nigeria? How we can be structured to ensure we build lasting businesses that defy changing generations and provide the much-needed stability to over 60 per cent of the Nigerian economy. These range from governance, tax efficiencies and great indices on the financials; and how can we leverage technology especially digital capabilities. Only 40 per cent feel they have strong digital capabilities in Nigeria.”
According to Lead for Family Business and Private Client Services Nigeria, Esiri Agbeyi, “Nigerian Family Businesses have had a challenging year – but rewarding as well. They have had to face tremendous headwinds with the currency issues and stock market fluctuations in addition to the pandemic. Growth is slowly returning to the market. We have seen how they have stepped in with their generous support of the communities during the pandemic.”