But only 8% have a formalised succession plan for their next generations.
Singapore family businesses are more optimistic than their global and Asia Pacific counterparts (84%) as 89% of them expect to grow in the next two years, the Global Family Business Survey released by PwC found. In relation, more than half is looking to involve their next generations as part of their leadership teams (63%) and senior roles (53%).
Despite this, the study showed that only 8% of said family businesses in Singapore employ a formalised and communicated succession plan which is lower compared to their APAC (12%) and global (15%) counterparts. The study also found that only 34% of the said firms have a costed, formalised and documented mid-term plan, which, according to PwC, could result to ‘major stumbling blocks to success’.
“The biggest challenge standing in the way of family businesses thriving in Singapore today and into the future is the lack of formalised processes in areas of mid-term strategic planning,” Ng Siew Quan, Asia Pacific and Singapore entrepreneurial and private business leader at PwC said. “This is also tied to their strategic competencies including mitigating risk and challenges, digitalisation and innovation, and succession planning,”
According to the study, family business in Singapore saw the need to constantly innovate (79%), economic environment (68%), and international competition (58%) as their top three hurdles.
“This reflects how the open nature of the Singapore economy is an added dimension of complexity for Singapore family businesses,” the report said.
Meanwhile, their global counterpart deemed the need to constantly innovate (60%), accessing the right skills and capabilities (60%), and digitalisation (44%), as their top three challenges.
For the 2018 version of the study, results showed that, strong family values and aspirational purpose which family businesses are often built upon are inherent advantages over non-family business which can be turned into winning strategies to help secure profitable, long-term legacies. However, whilst 71% in Singapore believe that they have a clear sense of agreed values and purpose as a company, only 34% of family businesses in the Lion City have their values articulated in written form.
Amongst those family businesses reporting double-digit annual growth globally, 53% were able to point towards a codified set of values, the study noted.
“In the digital age where ‘innovation’ is the name of the game, and the ability to constantly reinvent the business is integral to securing long-term success and legacy, there’s never been a more pressing time for family businesses to get their fundamentals – underlined by their family business values – right,” Ng commented.
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