Family businesses grew at a slower pace compared to the global average, PricewaterhouseCoopers (PwC) Global Family Business Survey 2018 has revealed.
The study released yesterday shows Kenyan family businesses have grown by 74 per cent compared to a global average of 89 per cent as corruption and competition from multinationals as factors hinder growth.
For many Kenyan businesses, corruption, at 72 per cent, is the key challenge. Others are access to skills, costs of energy and raw materials. More than half of respondents blamed competition from moneyed multinationals
In terms of important personal and business goals, the maintenance of the best talent for the business is crucial at 93 per cent followed by innovation and profitability.
Even so, 30 per cent of family business operators in Kenya are optimistic that growth will be quick and aggressive compared to the global average of 16 per cent.
Regionally businesses in the Middle East and Africa were the most optimistic, with 28 per cent expecting aggressive growth. They are followed by those in Asia Pacific at 24 per cent, Eastern Europe ( 17 per cent), North America ( 16 per cent), South America ( 12 per cent) and Western Europe ( 11 per cent).
Despite family businesses’ confidence and growth potential, Peter Ngahu, Country senior partner PwC Kenya cautions that the growth expectation is not always achieved.
“While the aspiration is strong, focusing on strategic planning remains a blind spot for too many businesses,’’ Ngahu said.
According to the study only 48 per cent of businesses have a formal mid-term strategic plan in place while 11 per cent have no plan at all. Furthermore 22 per cent of family businesses in the country expect to change their business model over the next two years.
The study further revealed a strong values-led culture in family businesses in Kenya can help to bridge that gap, as the 2018 survey clearly shows.
While 75 per cent of family businesses believe their stronger culture and values gives them an advantage over non-family businesses, less than half ( 49 per cent) of respondents have those values articulated in written form.
“The message is clear: adopting an active stance towards company values generates practices that pay off in real terms. A commitment to a clearly defined set of values can act as an ‘inner compass’ for a family business ,” he said.