Entrepreneurial and Private Business Consulting

PwC India Family Business Survey 2021

We have witnessed a challenging year, as the COVID-19 pandemic disrupted lives and livelihoods to unprecedented levels. While the health and safety of their people remained top of mind, business leaders were forced to react with agility and re-prioritise, showcase character and resilience, and also reflect on their larger purpose in society. Family businesses , with their significant contribution to the global economy and employment generation, played a key role in this regard.

Our tenth Global Family Business Survey reinforces both this resilience and optimism on recovery. We reveal the current thinking—and future outlook—of family business leaders in India. Our findings show that it’s no longer enough to rely on values and legacy to propel the business forward. Tomorrow’s family business requires a new approach for lasting success—one based on accelerated digital transformation, prioritisation of sustainability goals and professional family governance.

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Family businesses are most trusted and resilient. Strengthening digital capabilities, prioritizing the ESG agenda and enhancing overall family governance will be value accretive to such businesses, while further cementing their legacy for future generations.

N V Sivakumar

Senior Relationship Partner
Entrepreneurial and Private Business, PwC India

Key takeaways

The time to act is now if family businesses want to keep their legacy for future generations. Watch an overview of the key findings from the Global Family Business Survey 2021.

Transcript

Explore the survey themes

The COVID-19 pandemic has been an extraordinary test of resilience for family businesses. Through a people-first approach that prioritised the well-being of their employees and communities, 85% enabled staff to work from home and 26% repurposed production to meet pandemic-related demand. Only one-third of family businesses had to cut dividends, and only 30% needed access to extra capital. Such resilience also extends into the outlook for the future, with 88% believing they will be back to pre-pandemic growth rates by 2022.

For more insights, as well as global peer recommendations and tips on how to get started on them, download the full report.

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The pressure on all businesses to contribute to a cleaner environment and fairer society is increasing, so actions around a sustainability agenda - not just commitments - will take on a new urgency.

Family businesses have a head start to lead on sustainability. They are the most trusted form of business, are potentially more agile and are relatively free from short-term market pressures. This sets them apart as natural leaders on sustainability, a role that 68% of respondents to the survey say they are ready and willing to adopt. But there is a risk that established approaches and ways of thinking, particularly regarding what sustainability means and how family businesses are governed, could hold them back. For now, they are not prioritising ESG or sustainable practices, with only 42% currently having a developed and communicated sustainability strategy in place. This must change; as pressure increases for businesses to contribute to a better environment and society, family businesses must step forward, and take more active steps in investing in ESG and driving long-term sustainability practices.

For more insights, as well as peer recommendations and tips on how to get started on them, download the full report.

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The pandemic demolished any lingering doubts about the benefits of digital transformation. Digitalised services became the norm overnight, and businesses with established digital capabilities fared better than those that had to scramble to keep up. This was true for family businesses, as well. Those with strong digital capabilities and access to good data performed better than others.

But these businesses are the minority. Although 87% say that initiatives related to digitalisation, innovation and technology are a top priority, progress in these areas has been slow. Only 15% say that their digital journey is complete, and 74% believe they have a long way to go. More worrisome, 27% recognize they don't have strong capabilities but admit that developing these capabilities is not high on their action agenda.

For more insights, as well as peer recommendations and tips on how to get started on them, download the full report.

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Relationships are what make a family business strong—but when emotionally charged conflicts arise, they can also be a hindrance to success. Disagreements are to be expected. Only 67% say that all family members share similar views about the company’s direction. When sensitive topics like succession are on the table, a family business can benefit from approaching internal governance with the same professionalism that’s applied to business strategy and operations. But for many family businesses, there is still progress to be made. Only 55% have some form of governance policy or procedure in place, with only 11% having conflict resolutions mechanisms established.

For more insights, as well as peer recommendations and tips on how to get started on them, download the full report.

Explore the theme in more detail

Supporting private businesses during the COVID-19 pandemic

With the COVID-19 pandemic continuing to evolve, we understand your need to shift focus to reviving your business and adjusting to the 'new normal'. We have identified key areas of focus to enable you to make that shift - from effectively mobilising resources during this time, to stabilising business operations in the new environment and strategising for what's next.

Developing a strategy to help manage, protect and grow your family wealth, both for current and future generations, is essential. This is all the more pressing today amid the increasingly complex and often duplicative tax regimes.

We can help with:

Investment strategy
Asset and wealth management
Family office
Privacy and security
Tax and legal structure
Fragmentation of shareholding
Exit planning
Philanthropy and impact investing

This encompasses governance both of your business and also of family matters. For your family business to flourish and grow sustainably, you need both to be right.

Questions to consider:

Have you formalised business relationships between family members?
Do you have a family advisory board?
What about a family employment policy?
Do you have a family constitution?
Have you thought about setting up a holding company board?
And what about family education?

As a family business, your values and purpose are an inherent competitive edge. You have an opportunity to generate real gains from your values and purpose, by adopting an active approach that turns these intangible attributes into valuable assets.

Questions to consider:

Does your family have a shared mission and vision?
Is this clearly formulated and communicated?
Do you have a clear set of values on which business and investment decisions are taken?
Are you active in philanthropy and impact investing?
Are there specific mechanism/activities to promote and ensure family cohesion?

You don’t just think in quarters but in generations. Achieving a smooth and well managed succession of your family business is critical. An effective business continuity/succession process should include aspects from leadership and ownership, to values and purpose, to wealth management and stewardship.

Questions to consider:

Have you started planning what happens next?
Do you know what your next generation’s ambitions are for the future?
Have you thought of an appropriate educational programme to prepare younger family members to become owners/shareholders?

The digital transformation of family-owned companies – like any other transformational change – should be ingrained into the owner’s strategy and built around the family’s shared, long-term vision and values. No matter where your business is on its digital journey right now, we’ll be at your side with the insights and solutions you need to stay fit for growth and moving forward at the right pace.

We can help with:

Digital strategy and transformation
Business model design
Cultural change management
Improving productivity
Innovation

When it comes to managing and sustaining growth – whether organic or inorganic – family businesses face some distinctive challenges. While sustainable growth can be achieved in many ways, it is key to ensure that the chosen strategy is the right fit for your family business, in terms of long-term vision, control, values and readiness to embark on the growth journey.

We can help with:

Deals
Divestitures
Managing for a downturn
Cooperation with startups
Growth
New revenue models
Sales and Marketing
Pricing strategy
Internationalisation
Post-merger integration

We understand the importance of profit to fuel future growth and innovation, to motivate your family in owning the business, but most importantly, to pursue the businesses’ long term purpose and ambitions.

We can help with:

Enterprise performance management
Internal and external reporting
Business intelligence and big data handling
Efficiency improvements
Cost optimisation
Operational restructuring

For more than 160 years, we've helped privately-held businesses navigate victories, challenges, and opportunities to stand out and amplify what makes each unique. A large part of that comes from attracting, retaining and developing high-quality talent that can take your business to the next level while remaining aligned with the owning family’s values and ambitions.

We can help with:

Leadership and board management
Performance management
Compensation and rewards (both family and non-family)
Workforce of the future
Talent development
Diversity and inclusion
Global mobility

Managing risk and complying with regulation in ways that mirror the underlying values of your family and business. When it comes to managing risk, the approach taken by family businesses is often deeply rooted in your values and purpose. This can give rise to complex scenarios due to the fact that the risks at hand often apply across both your business and family. Reconciling these sometimes conflicting agendas is challenging and requires a multifaceted and sophisticated approach.

How we can help:

Optimising compliance
Navigating global trade
Risk management systems
Control environment
Cyber security
Sustainability
Tax compliance and planning

Effective management of your family business's capital and finances is key for sustaining growth. However, whilst maintaining a robust financial base for your business is key, it is also important to consider opportunities to tap into new sources of capital to fuel further growth.

We can help with:

Capital and financing structure
Financing of innovation and growth
IPO and other third-party investing
Bank reporting
Treasury
Working capital

Managing family ownership is one of the most unique and complex challenges which sets family businesses apart from any other type of business. It’s your life, your legacy, your future – not only for you, but for your next generation and the communities you operate in. We’re here to help you approach your ownership strategy with intellect and heart, focusing on four critical areas: wealth, governance, continuity and purpose and values.

A personalised and holistic approach, just for you.

PwC India’s family business consulting team We gets that your decisions aren’t always just about business. They’re personal. That’s why we help you manage family business ownership and growth at every stage, and especially during these times of change and uncertainty. Our unique framework considers your needs as both an owner and a business leader to ensure family business longevity. PwC’s family business advisory services calls this framework the “Owner’s Agenda.” Take a look at how we think about financial and strategic considerations holistically, from governance to succession planning in family business to technology

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Next Gen - Our commitment to young entrepreneurs in family businesses

Family-owned businesses are the heart and soul of the Indian economy and by nature, also more challenging than their corporate counterparts. With the next generation joining the leadership board, these businesses are exploring new territories, new sectors and are also considering inorganic growth. When actions are strategically planned, family businesses are destined to succeed for generations.

Fast-forward to your future

What is needed for you to earn your license to operate – and drive change? In our 2019 Global NextGen study, almost 1,000 NextGens in 69 territories across five continents and 11 industries helped us to understand how you see yourselves and what support you need to help you achieve individual success. Drawing on those findings, we are delighted to introduce you to PwC NextGen 2020, founded on our commitment to supporting your journey as an entrepreneur and successor in your family business – every step of the way.

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PwC Next Gen Education

NextGen

Be the inspiration. Drive the change.

As a NextGen member of a business-owning family, you have a lot of choices. But you also carry many responsibilities, and face complex challenges and expectations – today more than ever, as we all adapt to a new world. As you think about your future role in this new world, you may be planning to become a responsible owner, competent board member or visionary leader. All three roles are vitally important to ensure your family business continuity. But whichever one you choose, you need to understand the responsibilities and critical competencies that it involves – and how you can best prepare yourself to become an agent of change, making the greatest possible contribution to the long-term success of your family business growth and legacy.

As you embark on your journey of discovery and achievement, we at PwC are ready to support and guide you through the process of NextGen leadership.

Join PwC NextGen Club

Connect

PwC NextGen Club: Connecting the leaders of tomorrow.

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Learn

PwC NextGen Education: Developing the leaders of tomorrow.

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Lead

PwC NextGen Leader Insights: Inspiring the leaders of tomorrow.

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You can and will make a difference.

Today and beyond: The next generation challenges the status quo of family business

PwC’s Global NextGen Survey 2022

PwC’s Global NextGen Survey 2022 is an international market survey among next-generation members in family businesses. The goal of the survey is to get an understanding of what NextGens are thinking on the key issues of the day, what role they are playing and what roles they think they should play. The survey was conducted online, with 1,036 interviews in 68 territories, between 8 October and 12 December 2021.

nextgen-survey

NextGen: Be the inspiration. Drive the change.

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PwC’s Global NextGen Survey 2022

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PwC NextGen Club: Connecting the leaders of tomorrow

Become part of our global NextGen network and meet your peers from around the world. We can help you make connections to networks that matter most to you.

Join PwC NextGen Club

PwC NextGen Education: Developing the leaders of tomorrow

PwC's NextGen Education is geared toward experiential learning, inspiration and personal development. You can learn first-hand from renowned academics, business practitioners and your peers from around the world in an environment that is both exclusive and inclusive.

Find out about our NextGen offerings

PwC NextGen Leader Insights: Inspiring the leaders of tomorrow

Develop your own personal brand and let us support you in shaping your vision for your own venture or building your family business legacy. Our unique NextGen Leader Insights series are designed to leverage your personal strengths and talents.

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Family Business

Helping family businesses grow, prosper and professionalise to ensure continuity for future generations

Family Office

Working with family offices to preserve and then grow the wealth for current and future generations

PwC@Slush

Supporting the next wave of entrepreneurs as they take their business to the next level

Startups

From starting out to becoming a unicorn, we can help you become the company you want to be

NextGen Club

Connecting the leaders of tomorrow

Entrepreneurial and Private Business

PwC India Family Business Survey 2021

Key takeaways

Explore the survey themes

Supporting private businesses during the COVID-19 pandemic

Explore Further

A personalised and holistic approach, just for you.