Strategic, succession planning key for family firms, says PwC 

Some 43 per cent of the 2,802 family businesses with sales turnovers ranging from US$5 million (Bt ) to more than $1 billion surveyed in 50 countries between May and August, said they didn’t have a succession plan in place, according to PwC’s biennial global survey of family businesses: The “Missing Middle” bridging the strategy gap in family firms.
Only 12 per cent of family firms reach the third generation, and just 3 per cent make it past the fourth generation.
Niphan Srisukhumbowornchai, a tax partner at PwC Thailand, said that although family firms remained a vital part of the world economy as they contributed to the global gross domestic product and created jobs, they faced the risk of lacking a strategic plan that linked to growth and not being open to change.
“A good strategic plan must serve family, owners, and organisation,” Niphan said. “Each aspect of the plan cannot work independently, but rather needs to support one another. Most importantly, there needs to be a clear plan, written down, agreed, and communicated.
“Having a strategic plan that links where the business is now and where it could be has never been more important if family firms were serious about taking their business all the way to the end.”
Other issues surrounding globalisation, digital and innovation are also causes of concerns faced by family firms.
Despite sluggish global growth and uncertain geopolitical developments, almost two thirds of family businesses have grown over the past year, the PwC report said.
The sector has ambitious plans to grow, diversify, and internationalise their businesses in the next five years.
Family businesses in Asia Pacific, in particular, are the most determined, with 21 per cent looking for the quickest and most aggressive growth. This compared with family businesses in Western Europe (10 per cent) and North America (12 per cent). Some 64 per cent of respondents say the most important challenge over the next five years will be the need to continually innovate.
Less than half (45 per cent) also believe their business is prepared for dealing with a data breach or cyber-attack.
Yet, the great majority of family firms still underestimate the impact of digitisation, with only 25 per cent feeling vulnerable to digital disruption and many claiming to have a strategy fit for a digital world.
The survey finds that the new generations will become the change agents for digital transformation as they play a vital role in creating their family business’ future.
Next generation family members are more certain they have to work harder to prove themselves than the current generation believe they do (88 per cent versus 66 per cent). Nearly two-thirds say they are properly appraised (65 per cent versus 59 per cent in current generations).
“The next generation are ambitious, dynamic, and open to change. They come to work with different expectations, different priorities,and are easy to adapt to new technology. 
“Many families are now starting to professionalise their business by hiring an external CEO or professional teams to get fresh eyes on how they should run their operations,” Niphan said.