Welcome to the third edition of the African family business barometer, which this year was done in collaboration with the Nelson Mandela University Family Business Unit and the Africa CEO Forum.
Our bi-annual survey, which was undertaken during the COVID 19 pandemic, received 122 responses from family businesses in 9 countries across Africa. The barometer shows that the pandemic has had an impact on the confidence levels of respondents and uncertainty concerning the economic prospects for their family businesses over the next 12 months exists. Despite this uncertainty, they remain optimistic for the future.
Family businesses face many challenges and the pandemic has tested their resilience, innovation and leadership during a difficult period. Several of these challenges have remained the same compared to the previous barometer, which focused on improving turnover and profitability, accessing finance, as well as dealing with volatile currency and political uncertainties.
Family businesses have traditionally focused on the long term and are risk-averse, but the new reality and way of conducting business, as a result of Covid-19, has resulted in families reassessing their purpose as well as reaffirming their values and the role they play in the wider community. In addition, there is an accelerated focus on succession and the role of the next generation in governance, ownership and leadership. It is therefore critical that a detailed succession plan be put in place to ensure adequate preparation for an uncertain future. This uncertain future is acerbated by the technological and digital explosion and requires that families become more entrepreneurially oriented in their business operations. This year we assess two important topics in the barometer, namely level of Entrepreneurial orientation (EO) of African family businesses and the importance they place on Socioemotional wealth (SEW).
Whilst the immediate future is uncertain, African family businesses are well placed for the recovery of their respective economies due to their natural characteristics – patient capital, a clear sense of purpose and community and a long-term focus on the future. Patient capital in a family business context refers to more than the material value of equity and represents business owners who are willing to balance the current return on their investment against longterm transgenerational potential and success. A key change from the results of previous barometers, is that African family businesses are looking to diversify their businesses to continue growing in this rapidly changing global and African business environment.
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