Next generation key to helping family firms survive digital disruption

15 Nov 2016

From left: Rachel O’Connor, business development manager, Colourtrend; Maura McAdam, DCU Family Business Centre; Kevin O’Connor, managing director, Colourtrend and Paul Hennessy, leader, PwC Family Business. Image: Maxwells

Irish family businesses are failing to leverage the opportunities from digital, a new study by PwC reveals, and it is time to let the next generation get involved.

The PwC 2016 Irish Family Business Survey found that family firms are failing to use digital technologies to achieve customer engagement, and are in poor shape to stave off a cyberattack.

Only 45pc of family businesses say they are keeping pace with digital and new technologies.

‘Listening to the next generation as change agents for the digital transformation might prove fruitful’

But only a quarter think their business is vulnerable to digital disruption.

Across the board, family businesses are struggling with the usual problems, from succession plans to strategy, innovation, skills and finance.

Nearly half (49pc) have no succession plan and 26pc do not have procedures to deal with family conflict.

Unsurprisingly, 57pc say their ability to attract and retain talent is a key challenge, up from 43pc two years ago.

They say it is harder to retain talent than non-family businesses.

Keep IT in the family

But when it comes to digital, family firms have a lot to do.

Just one in two say they have a strategy that is fit for the digital age.

Less than half (45pc) believe that their business is prepared for dealing with a data breach or cyberattack.

The key, suggests Teresa McColgan, tax partner at PwC Ireland’s Family Business Practice, is to involve the next generation to navigate mobile, social and digital.

“The next generation play an important role in creating the family business’s future,” McColgan said.

“The majority of family businesses believe that they are not vulnerable to digital disruption, and just over one in two think they have a strategy fit for a digital world. In our experience, they underestimate the opportunities and potential risks of digitisation.

“Every business is vulnerable in some way to digital disruption, and those who think they are immune will soon find out that this is not the case. Listening to the next generation as change agents for the digital transformation might prove fruitful.”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years