Intergenerational communication and mentoring are critical to success
TORONTO, May 24, 2012 /CNW/ - Almost half of Canada's family businesses expect to see an intergenerational transfer of management and/or ownership within the next five years. Yet, over 80 percent have no formal plans in place to manage the family dynamics of the business, intergenerational wealth, and help prepare future generations to continue the family business legacy, finds a new KPMG Enterprise™ report. The report: Family Ties - Canadian Business in the Family Way, developed in cooperation with the Canadian Association of Family Enterprise (CAFE), sheds light on the opportunities and challenges facing Canadian business families and what it takes to build a successful family business today and prepare for the future.
"We know Canadian business families are in good shape and are optimistic about the future," says Allen Taylor, Chair, Canadian Association of Family Enterprise. "However, the general knowledge and understanding of family businesses in Canada is sparse - this study aims to advance the understanding of family businesses, their current and future owners, and the attributes that equate to their success."
Family Ties - Canadian Business in the Family Way solicited the views of both current and future generations of Canadian family businesses. Key findings include:
- The biggest challenge facing future generations is gaining the right experience, skills and business knowledge while overcoming entitlement issues
- Majority of the future generation respondents identified open dialogue, mentorship programs as well as formal training and development as key factors in deciding whether to join the family business
- 90 percent of respondents believe that family business and industry associations play an important role in their success as well as securing the commitment of future generations
KPMG Enterprise Insight
"Transition of the business from one generation to the next is an area where future business needs and family dynamics do not always align," says Beverly Johnson, Partner, National Chair, KPMG Enterprise, Centre for Family Business. "The future generation will ultimately decide whether the family business and legacy continues; managing the expectations of potential successors should be on everyone's agenda."
Family business is a relatively new field of study and KPMG Enterprise knows that to strengthen the legacy of Canadian family businesses, family business owners need to focus on the following:
- Engage future generations early on - future leaders need to become part of the management team as soon as they have proven their abilities, making them wait can lead to lost opportunities
- Establish clear communication channels - more communication among family members can help ensure everyone involved understands the strategic growth plans of the business and helps to maintain a balance of continued business success and family harmony over the long-term
- Embrace and adopt formal business planning processes - seek professional assistance to undertake a formal business planning process as well as adopt practices to professionalize the business to help business families refine their strategic priorities, keep them in view and ultimately ensure the business has a stronger future
About the Survey
The Canadian Association of Family Enterprise (CAFE) and KPMG Enterprise conducted surveys to explore and understand the current opportunities and challenges facing family businesses in Canada. The survey was conducted online in English and French in two phases: The first phase, completed in June 2011, asked questions of family business members. The second phase of the survey, completed in January 2012, was aimed specifically at future generations of family businesses to explore their perspective.
About the Canadian Association of Family Enterprise (CAFE)
For almost 30 years, the Canadian Association of Family Enterprise (CAFE) has been helping families succeed. We are a national not-for-profit organization established in 1983 with the mandate to promote the well-being, understanding and success of families in business. Through chapters across Canada, CAFE provides services, resources and support to those involved in family enterprise including both extended business families and the advisers that counsel them. Through participation in peer groups, seminars and conferences, CAFE has provided a forum for families and their advisers to share ideas, learn best practices and build their collective skills. Visit www.cafecanada.ca.
About KPMG Enterprise
KPMG Enterprise professionals are devoted to helping owners and entrepreneurs of privately held companies to build value in their businesses and grow thriving enterprises. Period. It's all we do. With decades of experience working with family businesses across the country and with many KPMG Enterprise advisers coming from family businesses themselves, we understand that the nature of a family business is inherently different from a non-family business. That's why we pulled together a unique team of professionals within our firm and developed an equally unique portfolio of services that address the specific needs of Canadian family businesses, their owners, and the family.
For further information:
Senior Manager, Media Relations
Allen S. Taylor
Canadian Association of Family Enterprise