Family business priorities, perspective and even views on topics such as artificial intelligence are revealed in a new survey of 160 family businesses.

Prairie Family Business Association annually, in partnership with USD’s Beacom School of Business, surveys family businesses about the topics, issues and programs they view as key to their success and longevity.

“At PFBA, listening to our members is crucial, and our annual survey is a data-driven tool that helps us achieve that,” executive director Stephanie Larscheid said.

“The insights gathered from this survey shape the programs and services we provide, ensuring we deliver high value to the family businesses we serve.”

Of the 160 participating family business members, almost 80 percent are based in South Dakota, with 10 percent from North Dakota, 5 percent from Minnesota and the rest representing at least eight additional states. Almost all businesses that responded have 500 or fewer employees.

The respondents span a broad range of generations and age groups, with more than 50 percent between 30 and 50 years old.

Ninety-seven percent of participants said preserving the family dynasty in business was important to them, with more than half – 54 percent – saying it was very or extremely important, and 80 percent saying they agree or strongly agree that family legacy and tradition are an important goal for the family business.

While the family at large is a key priority for these firms so are their customers – 85 percent of firms indicated that the business exists primarily to serve customers.

“This suggests that strategic choices made by leaders take customer desires into consideration rather than solely focusing on family needs,” said Marek Kolinski, assistant professor of decision science and management at USD’s Beacom School of Business.

“These and other results indicate that Prairie Family Business Association continues to foster a strong family business climate where current families are interested in preserving the firm within the family rather than selling it to an outside party such as a private equity firm – a phenomenon becoming more prevalent in family firms elsewhere, often due to a lack of interest among children in succession.”

Considering AI

The survey indicated that many family business are just beginning to consider how to integrate artificial intelligence. Thirteen percent of firms have implemented AI into their business practices, and only 18 percent of companies feel they have the necessary skills to do so.

When asked whether AI can provide a higher return on investment, a surprisingly high number of respondents – 58 percent – indicated “neither agree nor disagree.”

“This ambivalence was also observed in other questions related to the perceived benefits of AI in business,” Kolinski said.

“These responses suggest that firm owners may be unaware of the benefits AI can bring and the requirements needed to successfully implement it.”

This is a key takeaway from the survey, he said.

“Given that many businesses globally invest millions of dollars in AI solutions, it is crucial for Prairie Family Business members to understand this advanced technology and view its implementation as a strategic business decision that could provide a significant competitive advantage.”

The survey results indicated that education is needed there, though. Only 11 percent of family businesses agreed that top management promotes AI as a strategic priority, and 17 percent said they agreed that their company has AI skills.

This marked the first year the survey has touched on AI, and future years will continue similar questions as a way to track change among family businesses.

Valuable programming

Overall, PFBA members reported high satisfaction with their membership, experiencing a positive return on their investment.

“Engagement with PFBA leads to growth, maturity and enhanced success for family businesses as evidenced by testimonials in the survey,” Larscheid said.

“Our mission at PFBA is to empower family businesses to thrive across generations. This survey not only highlights our successes but also identifies areas where we can enhance our programs and services to better meet the needs of our members.”

According to the survey, 87 percent of those who participate in PFBA affinity peer groups found them to be valuable or very valuable. Similarly, 91 percent of respondents indicated that the annual conference is a valuable experience.

One of the key sections of the survey focused on the topics PFBA members want to explore in the coming year.

Consistently, leadership development ranks at the top of their preferences, and this year is no exception. This is closely followed by interests in communication and conflict resolution, culture and compensation strategies.

“When families participate in our programs, we aim for them to gain valuable insights, actionable takeaways and a supportive community to help them achieve their family and business goals,” Larscheid said.