Companies face a profound transformation. The economic uncertainty of a global market evolving at different rates, regulatory and market changes that run chasing the new economic and commercial realities, the rate at which prices and margins are adjusted, and the emergence of technology as a strategic factor multiplying the complexity of corporate management.
Family businesses are not immune to this. In Spain, family businesses contribute 70% of the GDP. Responsible for eight out of ten jobs, sustainability is an essential requirement for social stability, and responsible for the success of all that somehow participate in this market. It’s important to hear their aspirations and address their concerns.
Among the traits that I admire about the family business over other organizations, I like to highlight the entrepreneurial nature and vocation of sustainability for generations and personal connection to the brand, since there’s no guarantee of commitment to the project, with its feasibility and with its reputation.
The economic uncertainty of a global market
These values fit very well with the integrity and ethics in corporate governance that increasingly demand that society and stakeholders, especially after the deep recession, begin to let go of target figures after five hard years in which we’ve all learned to quickly interpret the changes. Faced with new challenges, new solutions are needed.
The unstoppable development of new technologies and increased global competitiveness, now that globalization is already an established reality, are just some of the major processes that align that it’s imperative to survive in this new era.
They know well that family businesses are increasingly seeking opportunities in new markets die with innovative and differentiated products and services. Although the task is very complex, as the market expands with the participation of emerging countries, increasing the purchasing power of the BRICS countries, the windows of opportunity are multiplied in the same proportion.
The complexity of corporate management
New technologies are business’ allies in this process of change. The environment demands such reaction rate that it’s possible not to recognize what may be the greatest technological revolution of all time, with mass access to the Internet, that will exceed almost 40% of the world’s population by the end of 2013.
The increasing connectivity and democratization of access to information represents invaluable business potential and there’s no stopping companies who can take advantage, not only for new consumers, digitization is also crucial to increase operational efficiency and reduce risks and costs. Therefore, it’s becoming a priority in the strategic agendas of many companies.
It’s true that the galloping pace of change requires investment and betting that will not be possible without funding. However, in the current environment, with bank financing, it’s worth exploring other available alternatives, from the Alternative Investment Market to the newly released Alternative Fixed Income Market, to hedge funds, venture capital, or private equity.
The entrepreneurial nature of family business
At KPMG, we try to help identify the needs of the family business with initiatives such as the Centre of Excellence for Family Business – a global Think Tank involving representatives of many companies, as well as our team of experts.
We will all be sharing experiences and seeking solutions to challenges such as governance, growth, internationalization, regulatory compliance, heritage conservation, and social responsibility – ends for which good planning is crucial. While the economy starts to recover, the world in which we will work in the future is very different than before the crisis.
But different does not mean worse; the complexity can also be a source of growth. And in this new era, family businesses will remain natural actors who know how to successfully participate in the common progress.