Australian Family Business Survey 2022

Entrepreneurial orientation

54 percent of Australian respondents identify as having a high level of entrepreneurial orientation, but they also demonstrate

• relatively low levels of risk taking compared to global peers
• significantly less pro-activity than their peers in the Americas
• low levels of innovativeness

Entrepreneurial spirit is vital for sustained success. How does the entrepreneurial orientation of a family business adapt to changes in ownership and management? In the report, we explore risk-taking as a key factor in assessing the entrepreneurial orientation.

Leadership styles and adaptation

Here we look at the capacity of the leader to adapt their leadership style to maintain momentum and family engagement.

Australian respondents identified 'transformational leader' as the prevalent leadership style (50 percent), yet the survey results indicated a more single-minded attitude. Leaders should be conscious of not 'saying one thing and doing another'.

Globally, the transformational leadership style stands out as a preference and we explore the implications. We also suggest practical questions that all leaders of family businesses should ask themselves.

Measuring family business performance

What does success look and feel like in your family business? For most it includes moving beyond financial performance to the emotional elements that make the businesses resilient and durable.

Australian respondents reported low levels of external and internal social performance, indicating there is still some important work to be done.

We see that a focus on Environment, Social and Governance (ESG) will enhance future financial performance and family businesses need to respond accordingly.

Family engagement and commitment

What is the glue that binds a family business together? Those that cultivate a deep commitment to the business from the family itself, exhibit a high level of 'socioemotional' wealth - we unpack what this means for family business success.

Close to 75 percent of Australian survey respondents report having a medium to high level of socioemotional wealth (SEW) – the highest of all regions.

Family businesses should reinforce this competitive advantage by continually investing time and energy into the family's emotional attachment to the business.

Embrace governance and succession planning

According to our survey, only a minority of family businesses have family boards and only eight percent have formed a separate 'family council'.

Good governance can offer a diversity of views, the encouragement to think more broadly and the capacity to manage experimental risk-taking.

Family businesses that adopt at least one governance structure are more likely to exhibit higher levels of entrepreneurial orientation – the secret sauce of sustained business success and competitive advantage.