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Survey shows family firms need to embrace technology and develop clear ESG strategies for the best chance of future growth.
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Family businesses are bouncing back post-pandemic: PwC
27 March 2023
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Family businesses globally are bouncing back from the pandemic with almost four out of five expecting to grow over the next two years, according to PwC.
It said 71 per cent of family firms expanded in their latest financial year and 77 per cent were confident of growing to mid-decade despite the challenging economic conditions.
However, PwC’s Global Family Business Survey found that continued success depended on family organisations being open to change and a key area was ESG.
The survey found businesses which communicated a sustainability plan were more trusted by customers than those without – 62 per cent to 49 per cent – but only a third of family businesses had put any focus on ESG.
Global family business leader at PwC Peter Englisch said family operations needed an ESG approach to keep building trust with consumers.
“Family businesses are showing they can grow by welcoming change and building trust with digital communication and diverse boards – even in a changing landscape,” said Mr Englisch.
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“To continue this trajectory, firms will need to re-orient to focus on delivering value not just for customers, but for society.”
“Transformation, purpose and legacy are no longer converse, but intertwined.”
PwC said customers now more than ever expected action from businesses on social issues, which was reflected in a growing level of trust for purpose-driven family businesses.
The report also revealed family businesses that embraced digital technology were more likely to experience double-digit growth in the past year and gain customer trust.
Despite this, the survey found just two in five family organisations believed they had strong digital capability and only 52 per cent ranked it as a top five priority for the next two years.
“While market pressures and rising costs mean survival is the main priority for family businesses globally, our latest data shows that those family businesses which are focused on digital transformation and diversity are reaping the rewards,” said Mr Englisch.
“Now more than ever, building competence and achieving strong financial performance are linked to corporate responsibility.”
“The message is clear, for family businesses to survive, they must transform and that transformation is now.”
PwC’s Global Family Business Survey conducted 2,043 interviews globally, including 630 in the Asia-Pacific and Australia.
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