Asian family business must adapt if they are to thrive
New consumers with new expectations are turning Asia’s growth markets into major consumption economies. At the same time, new technologies are disrupting industries and creating new opportunities for businesses to meet this demand. For family businesses to make the most of these opportunities, they must look to expand into new areas and markets. This means understanding the value of trust and renegotiating their relationships with five sets of key stakeholders.
There are five key pillars of trust that Asian family businesses must remodel if they are to maintain their trust advantage.
Elevate trust to an inter-family and board-level strategic priority
Trust and responsibility should be central to the C-suite’s vision of the business, guiding decision-making and succession planning. The profound long-term benefits of a trust advantage should be favoured over shorter-term revenue gains or cost savings. A family constitution can help ensure an optimal trust environment.
Build trust with the next generation of employees
The workforce of the future prizes employers that share employees’ values and expects to be empowered. Family businesses are already perceived as more value-driven than non-family rivals and must now give employees and teams ownership of individual initiatives. Decentralized decision-making will help make organizations agile enough to capitalize on new opportunities in a fast-changing environment.
Establish digital trust with consumers and customers
Consumers have traditionally trusted family businesses more than competitors. Those businesses must tread an especially careful line between adding value as they personalize their products and services, and being intrusive. Data sharing with business customers can unlock new value and help to deepen relationships, but also requires a renewed commitment to trust.
Safeguard trust with new partners
New types of broader ecosystem partnerships and platform-based business models can increase cybersecurity risks. Consistent protocols for transparency, data sharing, traceability and security will help to maintain trust inside and outside ecosystems.
Demonstrate trust to external investors
The investor community places more and more weight on environmental, social and corporate governance (ESG) factors. Family businesses that demonstrate a genuine commitment to transparency and responsible business will be more likely to earn the trust of external investors and secure funds that might be needed for growth.
Seeding a bright future
As leaders start to rethink trust in the digital age, there are some key actions they need to consider.
- Board and leadership teams must embrace trust as a core component of vision and strategy. It should be a key influencing factor in strategic choices.
- To embed trust across the organization, make decision-making transparent. Decentralization and data-driven decision-making can help with this, so can building a culture of celebrating trust.
- Develop a ‘listening infrastructure’ to understand what matters to consumers and build this into products and services. Be transparent about how their data is used.
- What gets measured gets done. To confirm current positioning on trust, use the Competitive Agility Index or some other robust measurement. To set expectations for internal and external behavior, deploy trust metrics (e.g. ESG commitments) and share them with partners.
- When building ecosystem partnerships, incorporate best practice on protecting data flows. Ensure there are clear data principles and governance to guide the extended ecosystem.
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