“The biggest challenge faced by family businesses right now is generational change. 1 in 5 family businesses are going through [it]” said Amin Nasser.

Faisal A. Al Mutawa noted that 95% of businesses in Middle East are family businesses – the same as in Italy.  

Amin Nasser added that only about 8% of these survive the 2nd generation.  “The first generation are entrepreneurs, the second generation are caretakers and the third generation are often the undertakers” he said.

A clear separation of roles was agreed to be an important component in overcoming this challenge.
Touching on the reasons behind this “We have a system [in the region] that is prone to disaster whereby the owner is the manager and everything else” said Abdulaziz Kanoo.   

He added “the challenges for family businesses are internal, not external. As they say in the USA you have to take the family out of the business.”

Faisal A. Al Mutawa cautioned that “The owner isn’t necessarily a good manager.”  

The issue of family businesses feeling obligated to hire family members without the appropriate skills was also raised by Faisal A. Al Mutawa.

Amin Nasser agreed: “a lot of young people feel it’s their birthright to work in the business whether they are good or not and that’s wrong. Families must create a standard – such as education or experience.”   

“Family businesses must ask ‘how we will address issues when our family of 5 grows to a family of 30? The challenge is to come up with the protocols and framework that will keep the family/business together” concluded Amin Nasser.