The future depends on future leaders
PwC’s Global NextGen Survey 2019 - Thailand Report makes for interesting reading. Research conducted by the multinational professional services network reveals that digital transformation is the top challenge facing Thai family businesses over the long term, even as a looming recession and the Covid-19 outbreak create more immediate worries.
Niphan Srisukhumbowornchai, who heads the Clients and Markets, Entrepreneurial and Private Business sections, says PwC Thailand’s survey makes it clear that the next generation perceive digital disruption as their top challenge for family businesses and want to find ways to transform these businesses by designing a strategy fit for the digital age that will help them stay competitive. Other top priorities include attracting and retaining talent and upskilling and reskilling their staff. If they want to be sustainable and grow in the future, then leaders – especially those in the next-generation – need to have a multi-skilled entrepreneurship and leadership approach to dealing with this fast-changing world.
The first Thailand Report is part of PwC’s Global NextGen Survey 2019 which assessed the views of more than 950 NextGen family business leaders worldwide, including 31 respondents from Thailand. Of total sample size, 69 per cent of the respondents from the second generation mainly worked for the industrial and manufacturing sectors (35 per cent), building, construction and real estate (18 per cent), retailing (14 per cent), hospitality and leisure (7 per cent), with 81 per cent of this group now actively engaged in family business. Over the next five years, the next generation are looking to move away from management roles into executive leadership roles and/or a majority shareholder role since they perceive professional management team would be key to success of their family business.
When asked to compare their family business to its competitors, young leaders have the same perspectives: that they are lagging behind competitors in using technology effectively, that they need professional and modern management practices, and also to foster an entrepreneurial culture that embraces market competition and technological change. On the other hand, the competitive advantages they have over competitors are being customer-focused, having a strong sense of purpose and employee engagement.
Family-owned firms must balance business goals and family goals, which are generating family wealth and maintain family values that last for generations. Optimizing balance needs a smooth transition when passing the baton from generation to generation. To do this, the heirs must thoroughly understand the business and be ready to take ownership and full responsibility In this respect, the next generation show that they have a good understanding of their family business and also know that they can improve the business utilizing the capabilities they have to close the gaps.
Niphan adds that every organization, including family businesses, must pay close attention to digital transformation and upskilling since they will be beneficial to the firm in the long run. From the survey results, the companies that adopt new technologies into their operations smoothly can manage costs and enhance production efficiency in the current economic downturn situation better than if they were not in place.
To help these young professionals fulfill their own aspirations to become good leaders and take their family businesses to the next level, PwC Thailand is organizing the second NextGen Club on the topic of ‘Agents of Change: Earning Your License to Operate’. This offers three months of free training courses for those aged between 25-40 years who have assumed managerial roles in family businesses with revenue greater than Bt1 billion. The training courses will be conducted by various experts from PwC and industrial experts in selected sectors. In addition, field trips and out-of-classroom experiences will be provided to pave the way ahead for and support these future leaders in the succession period, particularly in SME family businesses which are highly exposed to higher potential risk factors and globalization.
The training also support SMEs’ second and other next generations to gain more knowledge, skills and competencies, connections and insights in order to preserve the legacy of the businesses, build up trust from their families and stakeholders, and manage human capital with long-term strategic planning for sustainability and growth.
