New PwC Report Finds Family Businesses Need New Ways To Build Trust
PwC has released a new report that shows that what family businesses in the Middle East achieve in the coming years will be built on trust. Most Middle Eastern family businesses believe that the trust of customers, employees, and family members is essential to their success. This is highlighted in trust levels in the Middle East among these stakeholder groups being two thirds higher than those globally.
However the report also noted that there's a disconnect between traditional views about trust and their impact on how family businesses operate today. Family businesses need new ways to build trust with their customers, employees and family members. Today, customers want to know how the companies they do business with operate, what their values are and how they demonstrate those values, found the report.
Dr Adil AlZarooni, Chief Executive Officer, Al Zarooni Emirates Investments and author of Sustaining Family Businesses: The Essentials, pointed out that family businesses in the Middle East have low survival rates, with 23 years the average lifespan of family firms in the GCC.
Mohammed Essa Al Ghurair, CEO at Karam Foods Industries and Vice Chairman at Essa Al Ghurair Investment, acknowledged that the dynamic landscape of family businesses is seeing a significant transformation, powered by technology, reshaping how these businesses communicate, market, sell, and operate.
“As customer preferences continue to evolve, we prioritize convenience, personalized, experiences, ethical sourcing, and driving a meaningful social impact,” Al Ghurair added. “We have adapted our products and services to meet these evolving expectations, ensuring our offerings resonate with the changing needs of our audience. Our fundamental approach is anchored in agility and adaptability, forming the foundation of our strategy. We foster a culture of innovation that can quickly respond to the ever-changing market dynamics. In navigating the shifting terrain of family businesses, long-term success is within reach as we openly embrace these key principles, not just in our work but also for the benefit of our valued consumers.”
The message from this year’s survey is clear: family businesses not only need to make transformative changes to build trust, they also must show and tell—by making their efforts visible and communicating them clearly to their stakeholders.
For the employee stakeholder group, family businesses in the Middle East are faced with a significant trust gap: only 55 percent say they are fully trusted by their employees. Yet only 11 percent say increasing employee trust is a priority for the next two years (compared with 32 percent globally).
According to Al Ghurair, “to remain competitive, the seamless integration of innovative technologies has become an imperative. The unprecedented shift towards flexible work arrangements and remote collaboration, prompted by recent challenges, has prioritized adaptability for both our employees and consumers.”
AlZarooni agreed. “Family business leaders are realizing the need to make their operations more structured and become sustainable by staying relevant. One of the ways they do this is by focusing on innovation. To maintain trust, family business leaders need to ensure that other family members want to keep their wealth together and receive payments promptly from the returns on investment.”
For the family stakeholder group, one outward expression of the way family businesses are falling behind on demonstrating their values is the composition of their boards. 28 percent have only family members on the board, 45 percent have no-one under the age of 40 on the board, 19 percent have no-one from a different industry background on the board, and 59 percent have no women on the board.
“As we look to the future, a meticulous succession strategy is underway, ensuring a seamless leadership transition, to secure long-term stability,” reiterated Al Ghurair. “Trust, as we recognize it, is cultivated through consistent commitment and collaboration, involving all members of our family and the dedicated individuals within our workforce. Trust in both without and outside our organization is a cornerstone of our journey. It is not just a goal but a commitment we renew daily, ensuring our legacy of reliability, integrity, and enduring success continues to flourish.”