For the past four years, Swinburne University of Technology and Pitcher Partners have collaborated in an ambitious study of family business planning, supported by the Australian Research Council.
The findings of the Pitcher Partners Succession Reset: Family Business Succession in the 21st Century Report 2014 were launched on Tuesday 6 October 2014 by the Federal Minister for Small Business, The Hon. Bruce Billson MP.
The global research project identified that only 18.5 per cent of Australia’s Baby Boomers - who currently control trillions of dollars’ worth of private businesses - have completed their succession plans.
Swinburne’s Professor Michael Gilding said family business succession planning is becoming more uncertain and that many of the participants of the study acknowledged that they keep putting off their succession planning and just hope for the best.
“One reason for this is obvious: the business environment has become more volatile. Another reason is not so obvious: that is, families have become more fluid and open-ended.
“Parents no longer assume that the business automatically will go to the sons, rather than the daughters. More generally, parents are much less inclined to direct their children’s choices,” Professor Gilding said.
Family business succession planning has become an accomplishment, which depends upon the personalities and emotional intelligence of family members, especially founders and incumbents.
“It is no longer enough to rely on family business succession planning to look after itself. Nor is it possible for the family patriarch to lay down the law. Instead, skills of engagement, negotiation and institution-building have become paramount.
“Putting off family business succession planning ramps up the probability of succession failure, decisional paralysis and family feuds.”
Professor Gilding said research on family business worldwide has exploded over the past five years – not just in quantity, but in quality.
“As a result, we have an increasingly rich appreciation of family business, what makes them tick, and how they contribute to our economy and our society.”
The study involved a large-scale international survey with more than 1500 respondents and an intensive qualitative study with 77 participants from 49 family businesses.
For copies of the Pitcher Partners Succession Reset: Family Business in the 21st Century Report 2014 visit growth.pitcher.com.au