What digital changes would the next generation of family business leaders have to embrace?

Among the next generation of family business leaders, three in four have big plans to take their business forward. However, generational challenges persist, largely in the areas of digital and innovation.

PwC conducted in-depth conversations with 35 next gens from 21 countries and polled more than 100 additional next gens for its new report, ‘Same passion, different paths: How next generation of family business leaders are making their mark’. The results showed an incoming generation of family business leaders confronting generational gaps and culture change.

Digital is one area that businesses can no longer ignore. It is also one area where the generation gap still lingers. Our research shows that while next gens are excited to tackle digital, but often at a pace that can be uncomfortable for the current generation. In today’s business landscape, all firms – family businesses or otherwise – need to address the digital challenge, and next gens seem to grasp this.

Three quarters of those polled believe it’s very important or essential to have a strategy fit for a digital age. As digital natives, they feel much more comfortable with digital technology and see its potential for change. However, only 7% of respondents believe their firm is currently doing this well.

Partly due to a greater degree of transformation and investment needed to effect digital change, many current generation leaders may be cautious about committing to it. About a third of next gens polled (36%) expressed frustration that the current generation does not fully understand the potential for digital and the risks it could pose.

Likewise, the vast majority of next gens see innovation as a core component, with 82% responding that innovation is very important or essential to business success. However, a mere 15% of those polled see innovation being implemented well at their firms.

Going their own way: Four paths forward

In the study, PwC identified four main approaches next gens are taking to build their own paths to success: stewards, transformers, intapreneurs, and entrepreneurs. Some next gens straddle more than one of these continually evolving paths, but they can provide a helpful way to separate the different challenges, risks and opportunities that the next generation faces, and how success can look and feel different depending on the route they choose to take.

• Stewards – Individuals focused on ensuring the long-term sustainability of the family firm and protecting its profitability by staying true to the established core business.
• Transformers – Next gens who take on the task of driving significant change in the family firm, with the scope and support to do so.
• Intrapreneurs – Those whose families carve out a specific venture for next gens within the family firm – effectively the opportunity to be an entrepreneur within the firm itself.
• Entrepreneurs – Next gens who pursue their own ventures outside the family firm, often in completely unrelated sectors.

These next gens are truly remarkable individuals, who are already making a significant mark, whether inside their family firm or on their own.

Achieving success through the ‘five Cs’

While next gens will take their family firms down different paths, a set of common success factors emerged from the research. Regardless of the chosen path, these ‘five Cs’ comprise guiding principles for all family businesses:

• Culture – The family firm should foster a ‘safe place’ for the next gen to explore and grow.
• Communication – Genuine two-way engagement between the current and next generation, based on mutual respect and trust, ensures that experience is properly valued and new ideas are appreciated.
• Clarity – It is vital to have a clear strategy and agreed demarcation of roles and responsibilities – particularly where colleagues are also relations and emotions are always in play.
• Credibility – As the ‘boss’s child’ a next gen tends to earn the respect of co-workers, possibly gaining experience outside the family firm first.
•  Commitment – The business needs to make a long-term commitment to the development of the next generation, but the next gen should also reciprocate with a willingness to invest time in the business and give it a chance to work.

Given that the next generation may follow different ‘paths’ in the future; the challenge for the current generation is to prepare, equip and support the next gen to be successful whichever path (or indeed paths) they choose in the future. The development of the next generation must be development with a purpose to create the options that will allow the next generation to pursue their passion in the future.

Key findings

• 75% of next gens believe it’s very important or essential to have a strategy fit for a digital age – but only 7% believe their firm is currently doing well.
• 36% of next gens are often frustrated because the current generation does not fully understand the potential for digital and the risks it could pose.
• Similarly, 82% of next gens polled think innovation is very important or essential, but only 15% see it as a current strength at their firm.
• 75% of next gens have big plans about taking the business forward, but 26% of them find it difficult to get the current generation to give serious attention to those ideas.
• PwC study identifies four paths to success for next gens: stewards, transformers, intrapreneurs, and entrepreneurs.

Andries Brink is the PwC National Private Company Services Leader.

How to craft CSI programmes that will make long-term differences

Budgets are under pressure, the role of technology is becoming more important, and the needs of the communities we serve are changing fast.

It’s critical for corporations to invest their social and community development funds in a targeted and sustainable manner.

Here are a few observations that I’d like to share with businesses involved in corporate philanthropy and corporate social investment (CSI).

Budgets are tight

With the US government cutting funding for many programmes in Africa and with some African countries facing lower tax collections as a result of economic headwinds, many projects and programmes are under more financial pressure. They urgently need stability and financing.

Against this backdrop, it is important for corporations to bring a steady approach to the non-profit sector. We need to be committed and strategic in the way we invest so that the communities and organisations with which we partner can plan for the future and make a sustainable difference.

Get with the tech times

Salhu Haile, from the David and Lucile Packard Foundation in Ethiopia, said at the conference: “Africa is changing, philanthropy is not.” The CSI sector should be looking at whether it’s doing enough to support partners at grassroot level with technology that can empower them to do their jobs. From mobile phones to accounting solutions, tech can help NPOs to build capacity and grow efficiencies in their operations.

Don’t get obsessed with short-term metrics

Understandably, companies are eager to ensure that their NPO partners use their grants and donations in an effective and efficient manner. We shouldn’t be putting small NPOs under the administrative burden of producing complex reports every three months — they just don’t have capacity for it.

Most delegates at the conference agreed that it takes around two years for a project to start delivering success, so we need to take a long-term view. The reporting requirements should be as straightforward as possible, while ensuring that we can see that funds are being spent wisely for the long-term impact.

Take a chance

As grant makers, we need to be willing to take risks from time to time because the risky projects are the ones that will sometimes have the best pay-off. The David and Lucile Packard Foundation, for example, gave $2 million to a local Ethiopian bank for a women’s startup/enterprise development project. It understood that there was a chance the project would fail, but it didn’t. It lent the funds with a 2% interest rate and every cent was repaid.

Be a true partner

The areas that need the most attention in Africa include uplifting women and education, renewable energy and healthcare – areas that all need to be approached in a spirit of long-term partnership. As grant providers and CSI partners, we need to take a long-term view and build relationships that will endure for years. It was also clear that leadership on the ground and inclusive community conversations were among the success factors that ensured a positive outcome for the NPOs.

Joanne van der Walt is the Sage Foundation Programme Manager for Africa.

How to beat the silent killers from sitting all day

Research has linked sitting for long periods of time with a number of health concerns, including obesity, metabolic syndrome, increased blood pressure, high blood sugar, excess body fat around the waist and abnormal cholesterol levels.

And there’s a direct relationship between time spent sitting and your risk of early mortality of any cause.

Most workers have gotten so used to the notion of sitting all day, they don’t even think about the damage it could be doing to their bodies.

Our analysis shows that people sit in a car or bus to get to work and once there, sit at their desks, sit in meeting rooms and even sit in the canteen for lunch. And what compounds the problem these days, is the culture of answering emails after work hours.

This can easily add an extra hour of sitting to the day. This means workers will typically sit for between 10 and 12 hours a day without even realising it. And it can have a devastating impact on peoples’ health – even if they exercise frequently.

One study compared adults who spent less than two hours a day in front of a with those who logged more than four hours a day of screen time.

Those with greater screen time had a nearly 50 per cent increased risk of death from any cause and about a 125 per cent increased risk of events associated with cardiovascular disease, such as chest pain (angina) or heart attack.

If there was ever doubt of the effects of sitting, most people ‘shrink’ during the day. The reason lies in the vertebral column, specifically in the inner part of the vertebral disc. The discs in the spine are composed of a gelatin-like material which provides cushioning and protection to the spine.  

It’s your body’s shock absorber. And with the pounding your vertebrae take during the day with by sitting, it needs time to rest, rejuvenate and elongate again. Sitting for hours literally causes us to shrink a little during the work day.

There is however a simple way to combat the negative effects of sitting on our health.

People in offices should take a movement break every 30 minutes. No matter how much you exercise, you still need to do this. Research shows that people who sat for less than 30 minutes at a time had the lowest risk of early death.

While people know they need to move more, guidelines on what the entails should be more specific and should be put up in every office and encouraged by management.

For every 30 consecutive minutes of sitting, stand up and move/walk for five minutes at brisk pace to reduce the health risks from sitting.

Study results indicate that those who frequently sat in stretches less than 30 minutes had a 55% lower risk of death compared to people who usually sat for more than 30 minutes at a stretch.

People who frequently sat for more than 90 minutes at a stretch had a nearly two-fold greater risk of death than those who almost always sat for less than 90 minutes at a stretch.

An added benefit of moving every 30 minutes was to encourage older workers to move.

As we age we tend naturally to become more sedentary, but this increases the risk of poor health. Everyone will benefit from moving every 30 minutes. It’s important people just make it a habit.

Richard Andrews is the Managing Director of Inspiration Office.

Why is the nation starved of justice?

South Africans are angry. And South Africans are hungry for justice. As a society, we have had to endure a significant amount of frustration at the lack of accountability from a clearly corrupt cabal of individuals who have plundered state resources for their own ends for several years.

It is no surprise, then, that the dramatic fall-from-grace of KPMG and Bell Pottinger has been received like a welcome gift by the public. Finally, we have been shown the soft underbelly of implicated organisations, and we are not going to miss our chance to punish them: we delight to see senior staff resign; we seethe while reflecting on the damage caused by the now-discredited SARS report; and we wait with bated breath for the next large corporate to fire its auditors …

Indeed, if some of the commentary in the media is anything to go by, it appears that South Africa will not be satisfied until there is nothing left of these companies.

Meanwhile, no matter how many civil protests take place, President Jacob Zuma remains in power, innocent until proven guilty for his 783 counts of corruption. And the Guptas remain comfortably ensconced in Saxonwold. Something doesn’t add up.
      
What factors cause us to be able to hold KPMG and Bell Pottinger to account, but unable to deal with the bigger problem?

There are two main factors.

The different pace of choice in the commercial vs political arenas

The first factor is choice, also known as competition. In the private sector, clients can take their business elsewhere; many have done so, and many more are likely to do so. To have a shot at survival, the implicated companies need to come clean. They are facing something worse than legal sanction, and that is becoming a social pariah with whom no-one dares be associated. There is nothing like having its sustainability threatened to make a company take note of its moral responsibilities to society.

In the political system, choice is a much slower wheel to turn. Political customers (citizens) only get every five years to decide whether they want to take their political business elsewhere. And even then, political parties can count on deep loyalty from the electorate, with voters seemingly being more likely to change their sports team than their political affiliation.  
 
In the shorter term, it is possible that parliamentarians could drive necessary change but, on the whole, they don’t. And that brings us to the second factor.

Power vs independence

Of the many who are calling for the implicated companies to fall, most have no vested interest and would not suffer from their destruction. They have the power to influence society and, in many cases, they are the decision-makers that can remove contracts.

The same cannot be said for parliament. Those who have the power do not have the independence. The ordinary parliamentarians might on paper have the power to hold the executive to account, but in practice they are the political juniors of those embroiled in corruption, and are dependent on them for their continued employment.

A cynical observer might say that this is the same lack of independence that sees KPMG International marking the homework of their affiliate, KPMG South Africa. But, in reality, it is a lot worse.  In reality it is closer to KPMG middle management being asked to investigate the KPMG executive. This would clearly put them in an untenable position and society would not stand for it. And yet that is the only option that we have in parliament.

In theory, we also have independent institutions such as the police, the Hawks, and the National Prosecuting Authority. In practice, most of their heads are appointed by the president, and they are more like the Internal Audit function in an organisation. Useful, until they find something against the CEO.

What should we take from all of this?

As South Africans, we need to start thinking about how to build sufficient independence into our government to prevent us being held at ransom for years on end in future. We also need to start thinking about how we influence the next batch of parliamentarians to bring about the necessary changes.

Finally, a word of caution that we should not let our hunger for any justice blind us in our quest for systemic justice. We should remain firm but rational in our judgement of implicated companies, without giving up on the bigger prospect of finally witnessing the architects of state capture being brought to book. Save some appetite for the main course.

Kris Dobie from The Ethics Institute.

Why wait for things to happen?

Science has proven that our subconscious mind remembers everything that happened to us before we were six years old.

Everything we ‘absorbed’ until the age of six soaked into our mind like water into a sponge and, without us being aware, became our subconscious beliefs that have influenced our ability to manifest success and wealth and to achieve BHAGs (Big Hairy Audacious Goals).

In order to manifest success and wealth and to achieve BHAGs (Big Hairy Audacious Goals), you first need to establish what it is that you REALLY want. Then you need to make a plan or strategise how to make that happen. Use your diary or calendar to prioritise your time in order to focus on your plan and continue to take steps towards your goal, one-step at a time. You do not have to have all the answers straightaway – that can be daunting and could be what is preventing you from taking your very first step. Once you have taken your first step and become closer to your goal, it will seem easier and more attainable. Take one-step after another – just like learning how to walk. Each step you take leads you to the next step. Do not look at the ‘big picture’ and all the things you need to do to achieve your goal, as this may seem too overwhelming.

Whatever it is that you are dreaming about, stop thinking about it … and start doing it! Step up and discover what you are truly capable. Whatever is holding you back (your success blocker), push through and be an action taker not an excuse maker. Stop procrastinating and doubting yourself, that is preventing you from taking action.

“It always seems impossible until it’s done.” – Nelson Mandela

It often takes great loss, a huge setback or hitting ‘rock bottom’ (later identified as a ‘turning point in life’) to give you that intense hunger to finally pursue your ultimate goal or passion. Try to use your ‘turning point’ as motivation and look for the possibilities and opportunities it presents to make your goals a reality. Remember, you cannot only survive, but you can also grow from your ‘all is lost’ moments. It is up to you how you view these moments and what you are prepared to do to turn them around. Find a new path and change your story. Somehow, you need to find your inner strength.

The most self-sabotaging position to be in is to be ‘living comfortably’. If you are comfortable, you have not reached rock bottom and are still somewhat satisfied with your life. There is no ‘fire in your belly’ to change your situation and bring about the incredible life that you desire. You are not as hungry to go after what it is that you want, as compared to someone who is absolutely desperate to change their situation and bring about positive results.

My mum regularly quotes these words to inspire and remind me of ‘nothing ventured, nothing gained’:

“Shoot for the moon. Even if you miss, you’ll land among the stars.” – Norman Vincent Peale

Some people are so afraid of failing that they do not try to pursue what they want, so no one can say that they failed. That is not truly living life and giving it all you have. Instead, that is what I call ‘just going through the motions of life’, living safely and not daring to believe in or invest in yourself.

“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.” – Nelson Mandela

If something seems impossible, think of creative ‘out of the box’ solutions to make it happen. There are shortcuts in life, but sometimes we think we have to reinvent the wheel and start from scratch. Think about what it is you are trying to accomplish. What needs to come together for a successful result? Are any of these components readily accessible, or is there someone or a business that complements what it is you are trying to achieve? Follow what other successful people have done to achieve similar results to what you are aiming for. Be resourceful. Whom can you build a rapport with whereby you can both help each other and benefit? Building relationships is very important to your future success.

There are many pathways to success and to achieve what you want to accomplish. For example, if you did not get the high school/senior school results you needed for your desired university or college degree, you can take a bridging course and then apply again as a mature age student. While education is very important, you do not only get one opportunity to get it right. It does not determine your future success, and not everything depends on it. Find another path, another way around to get to where you want to be. Be determined to succeed, one way or another, and do not give up!

Whatever your goal may be, I hope the steps that I followed to write my book and establish my own successful business help you save time (and not over think or overcomplicate things):

1. WRITE your dream/goal down
2. RESEARCH your idea (‘what?’, ‘when?’ and ‘how?’)
3. SET a realistic deadline (not one that is impossible to meet)
4. BREAK it down/set a timeline (work backwards)
5. TELL someone about it (become accountable)
6. MAKE time for your dream/start – do not worry about what your first step should be, it does not matter. Start anywhere. You can adjust how you approach it as you go, just like adjusting the sails if the wind changes direction.
7. FOLLOW it through until completion.

Just take one-step, then another, and then another, solving each problem as it arises until there are no more problems to solve. The first step is the most important, is always the hardest and the one that most people never take.

Many people never start the journey to make their dream a reality. Either they are too afraid, too overwhelmed, too busy, have too many responsibilities, or whatever they tell themselves. It is such a shame because without taking the first step, their dream remains just an idea in their head.

So many people are too scared to admit that they want something and actually go for it. When there is something that you want to accomplish, do not think! Do not say, ‘I could never actually do that’ but rather, ‘I COULD do that and I WILL do that’. Play to win. Do not play it safe to avoid defeat.

This does not mean you have to become a selfish person. What it means is becoming more assertive and honest with yourself. There is so much out there to go after in life, so why not put your best foot forward and go after it?

Nikki Arnold is a Speaker, Coach, and Director of Inspired Living International.

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