Irish Family Business Report 2019

Values represent the “social capital” of a business. Like other forms of capital, businesses need to consider what an appropriate return is, and how to achieve it. Living values needs to be consistent and real.  The study highlights that family businesses with a clear sense of values and purpose have increased revenue and profitability. However, more work needs to be done to articulate them.

The purpose of an enterprise is its reason for existence. Family businesses need to be clear as to the reason that makes them stand together. The family originally founded their business for a purpose, and unless that has changed, the business is still here to realise that purpose. In our experience, the family without a common purpose will not flourish to the same extent.

Irish family businesses remain in robust health, with levels of optimism about future growth being high. However, it pays to plan ahead. 64% of Irish family businesses still do not have a formalised strategic plan compared to over half of their global peers.  Our research proves that those with good strategic plans have higher growth performance.

The world is different from the one family businesses have experienced in the past. Digital transformation requires new technical demands and a new culture. Irish family businesses can do more to embrace emerging technologies to enable their long-term sustainability, including empowering the next generation to ease the business’ digital journey.

Irish family businesses have improved in terms of having robust, documented succession plans over the last four years. But they still have a long way to go. According to the survey, only 18% of Irish family businesses have a formal succession plan. They are also ahead in terms of encouraging the next generation of family members to get outside experience and education.

It has been proven that having a diverse organisation is good for business, leading to better decision-making and better business performance. The survey finds that Ireland is doing better than their global counterparts, having proportionately more female board members and management, more women working in the business who are part of the next generation of the family business.

Family business leaders have traditionally viewed private equity investors as not necessarily compatible with their long-term strategies and values. But it looks like this is changing. With an increasing focus on the long term, including professionalising the business and more robust succession plans, Irish family businesses are considering looking for outside capital to fund the business.