Casey Wang
17 Mar 2023
The Dilemma of Digital Transformation: Older family businesses struggling with integrating modern technology and digital practices, facing competition from newer, tech-savvy entrants.
The Harrison family's legacy in Melbourne was as old as the city's colonial architecture. Over the centuries, they'd transitioned from shipping magnates to industrialists, and in the modern era, to diversified investors. Their wealth portfolio was vast, encompassing everything from real estate in Melbourne's prime districts, a family-owned winery in the Yarra Valley, stakes in emerging tech start-ups, and a philanthropic foundation.
Despite their affluence, the Harrison found themselves at a familial impasse. The elder members, Mr. Richard Harrison and Mrs. Eileen Harrison , held a conservative view of wealth management. They believed in retaining the family's real estate assets, as these properties had not only historical significance but also yielded regular rental income. In contrast, the younger Harrison , especially Richard Jr. and Amelia, freshly graduated with MBAs from top global universities, viewed these properties as stagnant capital. They pushed for venturing more aggressively into the tech sector, especially sustainable tech and AI.
Moreover, the family winery, a passion project of Eileen, faced challenges. Changing climate patterns meant that traditional grape varieties were struggling. There were operational inefficiencies, outdated marketing strategies, and a distribution network in dire need of modernization.
Amelia's pet project, the family's philanthropic foundation, aimed to support education for underprivileged children. However, it had been making redundant donations, lacking a focused approach to truly make an impact.
These challenges culminated at the annual Hayson family gathering, where what was supposed to be a reunion turned into a heated debate about the family's financial future.
Solution that we provide:
Recognizing the need for external expertise, the Harrisons approached our firm. We commenced with a comprehensive review of their entire portfolio, juxtaposing it against their long-term objectives.
Our initial intervention was in the realm of family governance. Through a series of workshops, each member was encouraged to voice their concerns and aspirations. This paved the way for a collective family vision. We introduced the concept of a 'Family Charter', a guiding document that would outline the principles, values, and strategies for wealth management.
For the real estate portfolio, we conducted a thorough market analysis. While we recommended retaining properties with sentimental and heritage value, some non-core assets were identified for potential divestment. The proceeds were then reallocated to areas identified by Richard Jr. and Amelia, particularly in sustainable tech ventures, under a newly formed family venture arm.
The winery underwent a transformation. Collaborating with leading agronomists, we introduced resilient grape varieties better suited to the changing climate. Operational inefficiencies were tackled through technology integration. On the marketing front, a rebranding initiative was launched, targeting younger wine enthusiasts, and the distribution network was expanded to include online sales, tapping into the digital consumer base.
For the philanthropic foundation, we introduced a more strategic approach. Instead of scattergun donations, we identified key areas where the foundation could make a tangible difference. Collaborating with leading educational NGOs, a scholarship program was instituted, ensuring sustained support for beneficiaries.
By the end of our intervention, the Harrison not only had a clearer financial roadmap but also stronger familial bonds, with each member appreciating the role they played in the family's legacy and future.