Family business survey reveals urgent need for strategic planning and training

A comprehensive survey conducted by the Malta Chamber of Commerce has revealed significant gaps in strategic planning and succession planning among Malta's family businesses, while highlighting an urgent need for leadership and technical skills training.

This recent survey, a follow-up to one conducted between November and December 2022, covered a broader range of topics and offered deeper insights into the operations and strategic priorities of family-run enterprises in Malta.

Key findings from the survey indicate that while most family businesses maintain a functioning board of directors that meets regularly to discuss current performance and future direction, the majority do not prioritise appointing independent non-executive directors.

Strategic planning remains inconsistent, with only a third of businesses having a written strategic plan. Half of the respondents acknowledged the need for such a plan but have yet to develop one.

Succession planning is similarly varied, with one-third of businesses having a plan in place, though some face challenges in implementation. Many businesses focus more on day-to-day operations rather than long-term succession strategies.

Operational concerns dominate the agenda for family businesses, with 86% prioritizing these over strategic issues. The survey also highlights a critical need for employee training, particularly in technical and interpersonal skills.

Additionally, there is a recognised need for training family business owners and directors in leadership skills specific to family enterprises.

Decision-making within these businesses often relies on collective discussions among key stakeholders rather than data-driven research. Interestingly, most family businesses lack a formal employment policy for family members, despite the informal integration of family into business roles being common practice.

Improving financial performance has surged to the top of the priority list for 2024, a notable shift from its position as the third priority in 2022. Retaining the current labour force and investing in new technologies to enhance automation and efficiency are also high on the agenda.

The survey reveals a stark contrast between businesses with robust corporate governance, including independent directors, and those without. The former group is more likely to have and regularly review a strategic plan, emphasizing the importance of good governance for long-term sustainability and strategic performance.

Regarding funding, most family businesses reported no significant issues in securing financial support, though a quarter still face challenges in this area.

This survey sampled approximately 160 family businesses selected based on size, economic sector, and maturity, with most participants remaining anonymous.