In the current environment, when people hear the words ‘business transformation,’ the context is often one of a corporate/technology, process/ systems change. But business transformation and digital transformation are not synonymous, and that is particularly the case among family businesses. The adoption of new technologies and the transformation of a company’s digital capabilities enable broader transformation efforts, and they may be good places to start, but they are only one piece of a larger end game.
Among family businesses, for example, the transformation agenda typically includes issues and opportunities that are important to all their stakeholders — from customers to suppliers, employees and the communities where the family lives and operates. They have a very different mindset about ‘change’ and a unique concept of ‘transformation’ that sets them apart from other types of businesses.
In a typical corporate setting, roles and responsibilities are narrowly defined and who is accountable for what is more prescribed. As an employee, you have a title, a role description and you work within the scope of that role. Other team members do the same.
With a more flexible structure compared to corporate enterprises, family businesses are also often known to change and evolve with the entry of next-gen family members who bring new skills and expertise to the table. However, some family business leaders are concerned that if a family is running the business and owning it, they are essentially reporting to themselves, which could lead to potential problems If they aren’t answerable to someone who has an objective perspective and holds them to account by asking the right questions.
The importance of a culture of continuous transformation combined with shared accountability is the bedrock of many family business discussions, and it evolves over time and across the generations. In a typical corporate setting, roles and responsibilities are narrowly defined and who is accountable for what is more prescribed. As an employee, you have a title, a role description and you work within the scope of that role. Other team members do the same. In family businesses that are more fluid, family members might take on multiple roles and they’ll often lend an extra helping hand wherever and whenever it’s needed.
In the early days of the pandemic, those involved in this line of business had to undertake quick fixes to make sure they could continue to operate in a hybrid or remote working environment. The focus leaned toward digital transformation of back-office operations. The focus then turned to the front office — the route to market and channel to the customer — where massive changes were often necessary for companies to be able to continue to meet their customers’ needs. Competitors that already had a good online presence were a step ahead. They gained market share, and suddenly online became the way to trade.
Competitive threats drove family businesses to consider how to digitize their front-end strategy as one aspect of the transformation of their business, and digital transformation took the spotlight again. In what is now considered to be the pandemic recovery phase, it appears that back-office operations are becoming a priority again.
The excerpt was taken from the KPMG Thought Leadership publication Pushing boundaries - Why family businesses are the drivers of change (kpmg.com)