PwC has recently released a report “Agent of Change: Earning your license to operate, PwC’s NextGen Survey 2019 – Malaysia Report”. The theme of the report is to explore what the Malaysian NextGens of family business members can do in this era of disruption and change. Specifically, in making their presence felt and contribute positively whilst building trust among the current generation. While they have ambition and wealth of ideas for the future, Malaysia NextGens feel they have not been able to make the impact that they want to achieve.
The Four NextGen Personas
In PwC’s Global NextGen Study 2017, it has described four distinct NextGen persona, that is, the key characteristics exhibited by NextGens based on their skills, contributions, and career goals. Each persona is distinct, highlighting different ways in which NextGens build their own path to success.
The personas are:
Transformers are self-confident future leaders looking to inspire change within their family business. As shown in the findings, the majority of Malaysia NextGens see themselves driving change as future leaders in their family business.
Stewards aspire to add value to their family business in ways that promote long-term sustainability and tend to stick to tradition, with the aim of protecting the profitability of the family’s business.
Intrapreneurs feel the need to prove themselves and often to do so by setting up ventures under the family’s wing and designing strategies fit for the digital age.
Entrepreneurs follow their own path. These individuals tend to be more sceptical about their family business long term success and prefer leading their own businesses, with none of the profits going back to the family business.
The majority of Malaysia’s NextGens surveyed are ‘Transformer’, meaning they strive to lead change and more likely to aspire to executive director positions (67% hope to achieve this by 2025). To give this context, most Malaysia NextGens today are in management roles, accounting up to 80% of respondents. Meanwhile, other major roles Malaysian NextGens are taking on are ‘Stewards’ and ‘Intrapreneurs’ accounting for 27% of survey respondents, respectively.
According to PWC’s NextGen Survey 2019, 88% of the respondents are ready to take over their family business and most Malaysia’s NextGen are in management roles that account for up to 80% of the respondents. 57% of the respondents are executive directors, 23% held the position of Head of division/business unit and 3% have a junior role in their family business.
According to the report, a majority of the NextGens say that they are being actively engaged in their family business through leadership roles in specific projects or initiatives within the business. On the other hand, 30% of the respondents feel the need to prove their worth before they are willing to share their ideas for change. 20% of the NextGens believe that they need to have in depth knowledge on the way their family business operates before they can suggest any changes and 17% admitted that they are being ignored and their suggestions are hardly ever listened to.
When it comes to making an impact in the family business most NextGens face constraints in their level of experience (37%) and confidence (30%). 27% of the respondents also cite a lack of experience outside the family business and 23% claimed that their level of expertise is the potential constraints that prevent them from making an impact in the family business.
Most NextGens do not seem to regard themselves as technology savvy, with only 24% rating themselves 5 and above in this area. A significant number of respondents also do not consider themselves to have a high level of leadership competency skills as only 33% of them rate themselves highly regards to this. However, the NextGens are confident in their problem solving and strategic thinking skills with 67% of them rating themselves highly in this competency while competency in understanding business and economic trends comes in second.
Malaysian NextGens appear to be highly active in their family business. They understand the skills family businesses need and believe that they have what it takes to succeed at the top level. Nevertheless, they may not have the chance to fully explore their potential as they work to build trust and seek the full support of the incumbent generation in both decision-making and suggesting change. They want their voice heard, but with a degree of guidance from the incumbent generation on the issues where they think they can add the most value.
Based on the findings that were validated in workshops with NextGens and current business leaders, there are four tailored recommendations for each of the NextGen personas, that could help NextGens in becoming agents of change in their organisations.