Family businesses reign supreme in the Gulf region, where an estimated 80 percent of non-oil & gas large businesses fall under their control. These family offices, which account for more than 90 percent of the private sector, are the heartbeat of regional economies, driving job creation while exerting power to sway markets.
The Great Transition: A groundbreaking shift in family enterprises underway
A dramatic paradigm shift is unfolding in family enterprises across the region. This revolutionary transition marks an important milestone for generations of entrepreneurs and heirs who bring renewed ambition and creative energy to build on the legacies of their predecessors.
But taking charge of a progressive transformation is a gruelling task that requires overcoming adversaries who are content with the status quo, and convincing doubters to embrace the new order. So how can family businesses transcend the boundaries of their traditional systems to adapt to new realities and become leading enterprises in the modern world?
From a ‘maintenance culture’ to proactive maintenance
A ‘maintenance culture’ is an expression of a company’s ethos—its values, thought processes, interactions and core beliefs that shape the way it operates. The transition from a reactive maintenance culture to proactive maintenance is becoming increasingly common among family offices as stakeholders focus on long-term growth.
An effective strategy for proactive maintenance is building a culture of communication, taking preventive measures, and utilising data-driven decision-making to identify potential problems before they require costly solutions. By addressing issues before they arise and taking an anticipatory approach to problem solving, family businesses can improve the longevity of their operations while minimising disruption due to unforeseen challenges.
So much more than a simple burden reduction tactic, proactive maintenance can enable stakeholders to leverage their resources efficiently and achieve optimal results, ensuring lasting success.
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Rise of inter-generational leadership shaking up the family business model
As the Gulf region sees a rapid shift from traditional family businesses to progressive enterprises, inter-generational leadership is playing an increasingly pivotal role in reshaping the business model. The rise of this new breed of leadership involves both older and younger generations working together to create a vision for the organisation that transcends their respective eras.
Empowering employees to play a role
Many family businesses are facing the challenge of transforming their operations to remain competitive and stay ahead of evolving industry trends. Empowering employees to do their part in this transformation is essential, as they can provide valuable feedback, insights, and ideas that can shape the future of the business.
By adopting a bottom-up approach to change, family businesses can ensure their new strategies are well-informed and likely to succeed. Giving employees a say in transformation supports a more team-oriented working environment and fosters engagement with the company’s objectives.
Positioning family offices as employers of choice for Gen Zs
Attracting the next generation of wealth management professionals begins with positioning family offices as magnets for Gen Zs to build their careers. As young people increasingly become more informed about their career paths, it is essential that family offices are seen as desirable organisations to work for. From enabling meaningful work experiences to offering attractive salary packages and a healthy corporate culture, family offices must stand out in the recruitment landscape.
Going green from the ground up
One of the biggest trends in running family businesses today is converting to green operations. This means implementing measures such as using renewable energy sources like solar panels and wind turbines to power factories, reducing harmful emissions through cleaner production processes, and incorporating cost-efficient waste management solutions.
Such changes bring huge potential not only for improving environmental sustainability but also helping family offices save money in the long run. Family businesses that embrace sustainability and make it a priority are investing in healthy relationships between generations and establishing themselves as industry leaders.
Embracing ESG reporting
As society moves towards valuing businesses based on their ethical outputs, family-run organisations should take the lead in embracing ESG reporting. Sustainability reporting is proof of a business’s understanding that environmental and social impacts, both positive and negative, can be just as influential on its bottom line as traditional financial measures.
Taking a proactive approach to ESG reporting is not only beneficial for society at large but also provides family business with a competitive edge in an ever-evolving market, in which transparency is becoming increasingly important to win and retain customers.
Prioritising communications for a successful listing journey
Effective communication is essential for any successful listing journey, particularly for family businesses. As a large proportion of family businesses rely on multiple generations working within the organisation, it is vital that clear and consistent messaging is delivered across all stages of the listing journey in order to ensure internal clarity and external stakeholder engagement.
Through emphasising the importance of strong communications both internally and externally, family businesses can showcase their objectives, credentials and reliability. Engaging in an open dialogue between stakeholders will also help foster trustful interactions, ultimately leading to a smoother IPO process.
Pushing ahead with digital transformation
As the modern-day global economy continues to evolve, family businesses are truly embracing digital transformation. From appointing dedicated roles to investing in innovative tech solutions, business owners are well aware of the opportunities that digitisation offers for long-term strategic growth.
Consumer patterns and behaviour have changed as a result; and family businesses must continuously adapt their strategies as part of a continuous plan of engagement. In an environment where disruptive technologies progressively compete for attention, there is no question that embracing change is key for family businesses to remain competitive.
Achieving ethical excellence through strict compliance
In a time of corporate scrutiny, many family-owned businesses strive to attain ethical excellence. One effective way to do this is through strict compliance with the relevant laws, regulations and codes of conduct. Beyond mere legality, voluntary self-regulation bolsters the company’s reputation, optimises its performance and ultimately boosts customer and partner confidence. Adherence to ethics at both the micro and macro levels serves as a template for how future generations of family business leaders can prioritise moral matters over material gain in a multifaceted environment.
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