Australian family businesses are optimistic about their future growth prospects with 78 percent reporting a positive view of their outlook according to the Family Business Survey 2015, undertaken jointly by KPMG Australia and Family Business Australia.
The bi-annual survey of Australian family businesses this year highlights the embracing of disruptive technology as a positive force by more than half of respondents. This openness, together with strong entrepreneurial characteristics and diversity in leadership, were listed as some of the key approaches of successful family businesses.
Bill Noye, Head of KPMG Australia’s Family Business practice said the focus on innovation, diversity and entrepreneurship demonstrated that family businesses were abreast of the times.
“Embracing disruptive technologies and keeping up with rapid change, together with entrepreneurship, the willingness to take risks, delegate authority and proactively seek new ideas and opportunities, are all important attributes for developing a sustainable competitive advantage which technology can help to harness.” he said.
While 78 percent were optimistic about their future growth prospects, they also wanted to understand the effect of technological change on their businesses.
Survey respondents agreed that technological change was creating disruptions in the way business is done, with more than half reporting that this change was creating a positive impact on their business. However, more than 20 percent indicated that technological change is increasing the costs of doing business, as well as increasing competition.
One of the greatest challenges reported in the Family Business Survey 2015 was balancing business objectives with those of the family. Top family objectives included financial security for the family, personal challenge, satisfaction and rewards, and quality of life outside work. Results from this year’s survey also suggest that this is one of the top reasons for conflict in family business.
The top business objective for this year’s survey was a focus on product and service quality (number two in the 2013 Survey), followed by cash flow (number one in the 2013 Survey), and net profit (unchanged). Sales growth had overtaken productivity as the fourth business objective.
“Family businesses are aware of the need to look after customers but also maintain cash flow and sales growth.” said Mr Noye. “It is notable that the main competitive business strategy adopted by family business varies according to ownership and business lifecycles with second and later generations and family businesses of larger size less likely to employ a ‘Prospector strategy’, a term referencing Organisational strategy research defining this as innovators who are willing to take the necessary risks to develop new products and services.
He said that while this might reflect the adoption of a lower risk management approach the ‘Prospector’ strategy was linked with high performing family businesses and competitive strategy was vital to support growth. Mr Noye highlighted the reported characteristics of family businesses that are able to achieve a business/family objective balance.
The KPMG Australia and Family Business Australia (FBA) Family Business Survey is the longest running Australian survey into family businesses, produced in collaboration with the University of Adelaide's Family Business Education and Research Group.
Since 2005 we have sought to better understand the unique nature, opportunities and challenges of family owned businesses who make up two thirds of the business community, and in this year’s survey we have gone deeper, to identify the characteristics of high performing family businesses in an ever changing business environment.
Head of Communications, KPMG Australia
Mobile: +61 411 110 953