Retaining ownership of the business is one of the key elements of family businesses long-term goals, yet only 41% of them feel confident in their succession plans, according to Deloitte’s latest edition of Global family business survey, conducted on approximately 800 businesses in 58 countries across the globe, including Romania. Despite 68% of executives saying they intend to keep the business in the family, only 26% have a stated plan for the CEO position and even fewer have this for other C-suite positions.
The majority of the interviewed executives find essential a long-term view, rooted in shared values, vision and culture, which can help them maintain family control on business over years. Consequently, 65% of family businesses consider long-term values more important than short-term results. Despite that, 71% of family businesses have planned only for the next two to five years and another 6% said that their plan covered only the single year ahead.
“The gap between long term goals and short term planning that we see among family businesses can only be filled in by succession plans. Although perceived by owners as a remote event, succession is crucial for the business stability and it requires thorough planning and solid preparation, as it is a lengthy process. In Romania, we are already advising clients in preparing and implementing the handover of the business from the founders to their heirs,” said Dinu Bumbacea, Consulting Partner-in-charge, Deloitte Romania, and leader of Deloitte Private programme, dedicated to serving private companies of all sizes including local entrepreneurs, SMEs, startups and family businesses.
Profitability is the family businesses’ top priority for the next 12 months, followed by growth of the business and development of new products and services, according to the survey. In this context, about a third of respondents would give up control over the family business in exchange for greater financial success in the long term.
Agility in adapting to changing environments is defined by 61% of family business owners as the most important attribute for the future success of the business and its sustainability. Innovation capabilities rank second, followed by financial position.
Deloitte’s annual Global family business survey, which now reached its fifth edition, taps into the views of hundreds of family-owned companies in four key areas, namely ownership, governance, succession and strategy. The full report is available here.