I wanted to thank you, for your presence during the event held for family businesses on Wednesday 1st February. I hope that all of you that attended, found the event as being insightful and inspiring.

I am reproducing below the speech I delivered during the presentation of the survey results:-

You can consider this as a call to arms. Not to fight any war. There is way too much of that going around already.It’s a call to arms for family businesses to shape up. Family businesses are today facing a multitude of challenges. I tried to group them.

• Fast changes in market trends & consumer behaviour
• Market disruptions & economic downturns
• Shift in the competitive landscape (with mergers & acquisitions likely to step up)
• Human Resource
• Innovation fuelled by Technology.
• Regulation

To face all this Family Businesses have to continuously transform, change and improve. To do so that can rely on only 1 thing – GOOD GOVERNANCE

So, what is Good Governance made of? In essence it is made up of two things. STRUCTURES and MINDSET. Unless family businesses have a good corporate and family governance structures and unless they have the right planning mindset, it will be very difficult for them to transform and adapt.

SLIDES on GOVERNANCE

Besides Corporate Governance structures, as family businesses move from one generation to the next they will also need family governance structures, like a family constitution and a family forum.

Why is Governance in family business so important? Because we need to find a balance between family and business. What will it be? Family first or business first? Because we need a system to help us understand that family businesses can only survive if the “we” is greater than the “me”! Because we need a forum where difficult conversations can take place, rather than we keep pushing them under the carpet. Because those difficult conversations can lead us to finding the right recipe for governance systems and policies.

I spoke about Mindset. The other element of Good Governance is having a PLANNING MINDSET. A mindset which is not stuck on operational issues, which is like running on the spot- you waste a lot of energy but you get no where!

If on governance family businesses have room for improvement, on the PlANNING MINDSET…we are miles away.

If we all agree that due to external environment family businesses have to Transform themselves, we should also agree that any business transformation needs to start with strategy and its formulation so that we can clearly outline what we need to change to achieve what objectives. Strategic Planning also allows us to be agile and flexible since we would know what is changing and how to react and adapt our plans according to the changing realities.

So it really hurts me and saddens when I see this – Slide on STRATEGIC PLANNING

Do you want to know the fundamental difference between business that make it and those that don’t? STRATEGY – The ability to look around you, adapt, change, pivot, to recover. Be assured that what made you win today, will not make you win tomorrow!!!!

One of the sure way for a family business to build RESILIENCE is through succession planning. But are our family businesses really giving this the importance it deserves? – SLIDE ON SUCCESSION PLANNING

Succession planning is a journey not an event. What do we mean by this? It is a journey as a succession planning journey gives 3 things

First of all that succession planning can really held family business nourish and build on one of their strongest ASSETS – THE FAMILY BOND!

A proper succession planning process also gives peace of mind. It allows to prepare and scale up processes and governance structures to make sure that there are enough checks and balances within which future generations can work within successfully

Finally, a succession planning journey ensures sustainability, thus making sure that the future of the family business is well planned, beyond the lifespan of the present family leaders.

Start the succession planning EARLY. It is NEVER too early. If you are trying to solve issues when the fighting is entrenched….than you are fighting a losing battle!

So I hope by now we all agree that to survive family businesses need to shape up, to be able to transform and change in an ever changing and complex external environment.

So what are the main elements that family businesses need to keep under check to make sure that they can change and transform as needed?

SLIDE ON PRIORITIES

• Talent – HR
• Information & Analysis – to gain insights
• Structure & Processes
• Adequate use of Technology – Not use technology for technology per se

All the above are clearly given priority in the survey. There are 2 major elements, which are not given priority – 1. STRATEGY – Looking outside……….2. HAVING A HOLISTIC VIEW…JOINING THE DOTS  one case in point “Retaining work force No.1”….”Training Managers…no.8”….when it is known that people leave managers not companies

On the positive side environment – Priority no.9…mid way point out of 19 priorities…..not too bad…surely was worse in the past…its rising…

Click HERE to review the Family Business Survey results presentation

During the same event, a holistic service was launched by EMCS and AIS Environment. Such holistic service, called the Business Reality Check, is targeted at family businesses to help them shape up and become more professional in their approach to leading the family business. Click HERE to review what the Business Reality Check is made of.

Feel free to contact me on silvan.mifsud@emcs.com.mt to ask any questions.