Family businesses must build trust 

However, to achieve this, family businesses must appreciate the role that trust plays in attaining long term success. This holds true when looking at PwC’s 2023 Uganda Family Business survey results. 

Securing your legacy
The results show that whereas the top priority for 90 percent of respondents is to create a legacy and protect the family business as the most important family asset, only 63 percent of family businesses consider themselves fully trusted by their customers, employees, and family members. 

The results also show that only 54 percent of family businesses are fully trusted by regulators. They further reveal varying levels to which family businesses desire and value the trust of stakeholders: customers, 87 percent; employees, 70 percent; regulators, 87 percent and family members, 57 percent.

These results indicate an opportunity for family businesses.      
First, family businesses ought to recognise that trust is tangible and trust matters. It is a product of one’s integrity, the honesty of one’s intentions, and the actual results of one’s actions.

Being trusted engenders loyalty and confers trust dividends on the family business. For example, customer trust facilitates revenue growth and buttresses against competition, an important aspect considering that 64% of family businesses expect growth in the next two years. 

Employee trust builds and sustains morale, strengthens a sense of belonging, unlocks employee creativity and innovation, and stems attrition. Regulator trust facilitates compliance and helps influence policy formulation. Family trust engenders family cohesion, particularly important for no amount of business success can compensate for family failure. 

Second, bridging the trust gap, the gap between the desired level of trust and the actual trust with each stakeholder, is of utmost importance. The opportunity for family businesses here is to introspect and ask constructive questions: why aren’t we fully trusted by our customers? What does this mean for our competitive advantage? Are we vulnerable to competition? If our talented employees do not fully trust us, do we risk losing them? What would this mean for our ability to create, innovate, and remain competitive? What should we do to improve our trust score with regulators? 

Are we using fair means to compete? Is the continuity of our business at risk of regulatory non-compliance? Is there sufficient cohesion in our family? What does our family trust score mean for the transgenerational resilience of the family business? Does our family have a shared vision for the family business? Do we have robust family governance structures to protect the interface between the family and family business? 

There are many more questions that family businesses should introspect on. However, both owners and managers should have the courage to ask the right questions, even when they don’t have the answers. 

Doing so will activate awareness which in turn should inform behaviour changes that improve family cohesion and the prospects of the family business.      

Ultimately, to reap the benefits, family businesses should introspect on the most important questions: Are we trusted, and are we trust-worthy? And if not, what must we do to improve our trust score?    

Cedric Mpobusingye is a partner at PricewaterhouseCoopers.