Although nearly two thirds of the next generation of Thai family business leaders (NextGen) see business growth as a key priority, adopting new technology to upskill digital capabilities is equally vital, according to the Global NextGen Survey 2022 -- Thailand Report from PwC.
Succession plans for family businesses may have been halted by Covid-19 but the pandemic has also encouraged the current and future generations of leaders to band together more tightly than ever.
The second edition of the Global NextGen Survey is the most extensive of its kind that PwC has ever conducted. Its insights are the result of interviews with 1,036 family business leaders in 68 economies, including 40 respondents from Thailand.
The survey found that Covid had made driving business growth a priority for NextGen leaders. Achieving business growth was a top priority for 63% of respondents, followed by expanding into new sectors or markets (50%).
"The current global situation makes it challenging for family businesses to survive across generations," said Niphan Srisukhumbowornchai, entrepreneurial and private business leader and tax partner at PwC Thailand.
"Our survey shows that NextGen leaders are not only looking for ways to survive, but they also want to drive growth through the power of their mindset, digital capability and new skills. At the same, they want a balance between financial goals and responsibilities to society and the environment."
In addition to growth, digital upskilling of the workforce and the adoption of new technologies are key priorities for the next generation. Doing so will help family businesses strengthen their organisational capabilities to better meet the demands of clients, while establishing a competitive edge.
Some 35% of Thai NextGen respondents are confident of their digital capabilities, higher than the 28% of current leaders who feel the same way. One in three (33%) of NextGen leaders believe the current leadership generation doesn't fully understand the digital opportunities and risks for their family business.
A positive effect of the pandemic has been to increase intergenerational cooperation. NextGen and current leaders are working more closely to solve problems and manage challenges facing their business.
MORE COMMITTED
Nearly half of Thai NextGen (45%) respondents say they're now more committed to, and more involved with, the family business than before the coronavirus outbreak. Communication between the generations about business affairs is stronger than before.
However, it's hard for current leaders to exit and let go of control, with 57% of Thai respondents saying the current generation aren't ready to retire during the pandemic. Meanwhile 18% say the pandemic has slowed or delayed the family business succession plans, higher than their global peers at 12%.
"Although many Thai family businesses have succession plans and bring in NextGen members to be involved with development, the truth is that current leaders are hesitant to hand over all leadership roles in this challenging situation," said Mr Niphan.
"However, that doesn't mean succession will not occur in the future. This is an opportunity for the NextGen to showcase their leadership skills and talent for driving business growth, earning trust from the current leaders."
SUSTAINABILITY ORIENTED
Another side effect of Covid-19 is that it has hastened the adoption and awareness of environmental, social and governance (ESG) practices among family businesses.
The survey found that over two thirds (68%) of Thai NextGen leaders believe their family business has a responsibility to fight climate change, which is in line with their global peers at 71%. More than half say they will ensure sustainability is at the heart of their business practices in the future.
"It's a positive sign that Thai NextGen show a strong appetite for ESG impacts rather than focusing solely on profitability and shareholder returns," said Mr Niphan.
"Covid-19 has transformed the expectations of society and stakeholders. This is a challenging time but a good opportunity for NextGen members to demonstrate their leadership skills by driving sustainable growth under ESG practices."