Strategic planning for family businesses is now more important than ever and represents a business's most important challenge, said a leading businessman in Bahrain.

Khalid M Kanoo, chairman of Bahrain Family Business Association, was speaking a meeting at the Bahrain Chamber of Commerce and Industry, where he unveiled a report on the family business sector.

Bahrain’s economy is rapidly growing and its connection with the GCC and global markets is increasing, he said.

"In the wake of increased global uncertainty and the recent economic downturn, it is ever more important to assess the current state of family-owned enterprises in Bahrain and evaluate the sustainability of these firms across future generations," Kanoo added.

The report points out that family governance structure, its effectiveness and processes among the surveyed family firms were relative weaknesses.

However, this was not raised as an area of major concern or as a challenge to the future sustainability of the firms, it said.

The report said there is a serious gap in terms of the succession planning among family businesses in Bahrain but like family governance, this is not high on the family businesses' priorities.

The majority of family businesses surveyed do not feel that going public is important for their future survival, as they are more concerned with retaining complete ownership control of the firm.

The report concludes that family businesses need to establish a clearly defined strategic direction and a plan which are clearly communicated across the entire organisation.

This plan needs to be reviewed and updated annually, it said.

They need to regularly evaluate opportunities in the market and assess their business lines accordingly, need to embrace the continuous changes in technology and management practices and adapt to new ideas and strategies across the transition of generations.

Equally, they need to have a well-defined management and ownership change-over procedure in place to ensure that the business can transition successfully from one management generation to the next.

And they need to have a well-defined succession plan in place to ensure that the family business can survive if there is a loss of key players in the family business.

The report adds that family businesses need to build a capable and talented management team, including both family and non-family members, which are able to provide input into family business decisions relating to the strategy of the business. – TradeArabia News Service