“In family business, the first generation are the entrepreneurs, the second generation are the caretakers, while the third are the undertakers”.
The anonymous quote sadly reflects the fact discovered by the Egyptian Center for Economic Studies that only around 30 percent of family businesses survive past the first generation, while just 3 percent continue until the fourth or fifth generation. This represents enormous lost opportunities for business, the economy and the society at large, considering that small and-medium sized enterprises are considered the birthplace of family businesses and make up roughly 80 percent of Egypt’s GDP. Many family businesses fail to sustain across generations due to overlooked and unaddressed problems related to ownership and management structures, governance issues, succession planning, inter-generational transitions and business sustainability. Some businesses are aware of these challenges, but struggle to find suitable models to address them, or face family issues while trying to do so, while others continue with a business as usual approach, and overlook such issues until they develop into serious conflicts that threaten the business’s continuity.
Acknowledging the important role family businesses have in the economy, their impact on society, and realizing the need for more in-depth and experience-based understanding of the dynamics of family business, AUC School of Business initiated a year-long initiative focused on family business to assist their leaders in addressing typical challenges that threaten their business longevity and sustainability.
This initiative included a series of webinars and public talks focusing on family business, in addition to providing knowledge-focused content on the School’s social media channels and through Business Forward throughout the year. A roundtable discussion on the resilience of family business was included in The AUC Annual Business Forum in its 2023 edition, where international speakers from family businesses’ leadership and academia deliberated on the resilience of family business and related challenges. To provide an additional resource for academic research on family business, a virtual international family business research day was organized in collaboration with ESCA Ecole de Management and MCI | The Entrepreneurial School. 14 researchers from four countries, namely Egypt, Morocco, Japan and Austria, presented and debated 11 research papers on family businesses. These events created a pool of knowledge of academic research, shared experiences and working knowledge on challenges facing family businesses and best practices required to address them.
The highlight of the year-long initiative on family business was our Business Forward annual interactive campaign #IMovedMyBusinessForward themed in its third edition on family business. The objective of the campaign was to showcase and disseminate the working knowledge about family business by presenting successful examples and business models that were able to overcome the typical challenges they faced, as well as engage participating family businesses in sharing their own stories that tell their family business journeys, their experiences and challenges.
We received 40 applications to join the campaign through the campaign page, and 14 family businesses were shortlisted and presented in short videos screened on the campaign page. These stories were evaluated through a jury track, and an online audience voting track where the public audience voted for the most inspiring family business story. This family businesses and audience engagement served to raise the much-needed awareness on typical challenges facing family business among both the elder and younger generations. It was crucial to raise such awareness and create a forum through the campaign’s closing event where the working knowledge can be shared, questions answered, and best practices highlighted to inspire other family businesses to follow suit.
Additionally, since its launch in December 2022, the campaign circulated the obtained knowledge and research through written and audiovisual content that emphasized the skills, strategies and structures required to address family business challenges, reaching more than 1.5 million people from the business community via social media and in person events to benefit the business community from the pool of generated knowledge base.
We hope we have managed to contribute to raising awareness about the importance of addressing family business issues early on and to have provided insights, shared experiences and recommendations to assist family businesses of all sizes in implementing best practices conducive to family business growth and sustainability across generations.
We are dedicated to making a positive impact that is scalable and sustainable in Egypt and the surrounding region, which we strive to achieve through the engagement of our readers from the business community and our academic partners.
We hope you find this special edition on family business informative and useful.
