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Addressing a very senior group of executives from the GCC's leading business conglomerates during a one-day seminar co-organized by Insead Centre for Executive Education and Research in Abu Dhabi, JPMorgan Private Bank and Young Presidents' Organization, Insead Professor Carlock said that the challenge facing UAE and other home-grown regional businesses is to develop leaders and owners from the family who are capable of adapting to changing social values, new technology, as well as increased competition.
"Family enterprises will remain the pillars of the region's burgeoning economic outlook. Even on a global level, family firms make up more than two out of three companies and employ more than 50% of the international manpower,"
said Insead Professor Carlock.
International studies have shown that seven out of ten family businesses fail to make the transition to the second generation. And only one of ten makes it to the third generation. That's a 60 per cent failure rate per generation.
"Most senior-generation family business leaders across the Middle East will tell you that their greatest fear is that their children will not be prepared for the leadership responsibilities that a successful family enterprise demands, or that family conflicts will arise that threaten harmony and ownership continuity. Yet, the challenges that both current family leaders and the next generation face are not insurmountable."
"Each Middle Eastern family business is unique; therefore, to develop the next generation successfully, a family business needs to think about best processes, not best practices. Think about context and content, and ask 'what is our family's vision for the business?' and 'how can the family contribute'? The answers are crucial to understanding the next generation's developmental needs," said Carlock.
Steve Klemme, managing director and head of JPMorgan Private Bank in the Middle East said "This was a very strategic seminar that responded to challenges that family-run businesses face in the stewardship and transfer of wealth. We have a very strong focus on family and entrepreneurial wealth and regularly support and guide our clients in this respect. Today's event was a valuable opportunity for family businesses in the region to get more insight into how to sustain their businesses and maintain their performance for the long term."
YPO's Regional Education & and Social Responsibility Chairman -MENA, Mr. Waleed Al-Banawi, said, "The content of the seminar was tailored for the main concerns of family businesses and provided the right solutions and guidance for family businesses to secure a smooth transition between generations of leaders."
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Posted by Medilyn Manibo, Assistant News Editor
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