‘Transforming a family business in turbulent times requires new mindsets, strategies, and practices’

Seasoned accountant and consultant Hilary Galea-Lauri on Saturday stressed the need for family business leaders to implement “new mindsets, strategies, and practices” if they want their organisation to succeed in today’s dynamic world.

Mr Galea-Lauri, who recently bid farewell to KPMG Malta after almost 38 years working at the corporate service provider, is vastly experienced in assurance, audit quality and readiness, among other skills. Last week he was appointed Independent Non-Executive Director and Audit Committee Chair at dLocal, a major global payment gateway platform focused on the African, Asian, and Latin American regions.

Utilising his wide range of experience in the business world, he remarked that any strategy ultimately requires “a clear vision, strong leadership, and a commitment to innovation and social responsibility”, and this is especially the case for family businesses.

The importance of the future of family businesses has been a topic that has been highlighted on various occasions over the past few months, particularly since over 70 per cent of Malta’s SMEs are family businesses. Many of these businesses do not have a written strategic plan, and even less also have a written succession plan, both core elements which help ensure the future of a family business.

Adding to these points, Mr Galea-Lauri remarked that a successful strategy for many family businesses is to require that the children and grandchildren who wish to join the business to get “outside business experience first”.

“This gives the potential family employee the benefit of knowledge in another environment, which shows them alternative ways of working, managing and producing products and services,” he added.

He also highlighted that in order for family businesses to oversee change, and hence conduct a “substantive and irreversible shift” in its identity, value system, and capabilities, it must undergo three difficult acts.

Firstly, it must develop a “deeper sense of purpose” that guides strategic decisions and shapes the workplace culture. Additionally, it also needs to reposition its core business, as well as create new sources of growth.

However, in order to stand the test of time, family businesses must depend on the abilities of the next generation of family business leaders.

Mr Galea-Lauri remarked that in order to be successful, these business leaders need to be both able and willing to lead the business and to drive a “powerful transformation agenda” that is “daring, bold, and different”.

In this respect, the new generation must employ the strategic skills of “purpose, resilience, networks, long-term lens, adaptation and agility, as well as people and culture”.

“Transforming a family business in turbulent times requires new mindsets, strategies, and practices that are essential for implementing a new family business model to succeed in today’s complex, fast-paced, and hyper-connected world,” Mr Galea-Lauri affirmed.

“Owners themselves must lead the charge from the inside and insist on new directions and transformative action to ensure success in the years ahead,” he added.

Zampa Debattista Co-Founding Partner Matthew Zampa emphasised this point earlier this year, stating that business leaders need to identify the individuals who can succeed the existing leaders and the roles that need to be fulfilled, as through this, they can “set the structure of the future”.

“One has to ask whether these people are competent enough. Unless these people have the right competence, leaders should be looking outside the organisation to see if external people can ensure the long-term viability of the business,” he said.