When the patriarch just can’t leave…..

I read an article of the Emperor of Japan,  Emperor Akhihito planning to address the nation today. The article states that he may indicate , ” that it’s time for him to step down from the world’s longest-running hereditary monarchy. Taking that step may not be easy, however. No Japanese monarch has abdicated in nearly 200 years, no law governs such cases, and the popular 82-year-old monarch’s retirement could raise delicate questions about a ban on female succession and the imperial family’s place in society.” 

(EDIT: FT reported that he had mentioned that the Emperor did indicate a desire to abdicate, the first Japanese emperor to stand down since 1817)

I am in no position to and hence will not comment on the above article in any manner at all.

But this article triggered some thoughts  on a different context. i was thinking of cases in family businesses, where during my discussions with the patriarch or the operating head of the family business, have admitted in a moment of candour, that they feel helpless, and stuck in the family business and cannot leave. This causes them to remain even though they would leave, given a choice.

I think that this is a phenomena that I have heard from one of the successors, in a top 10 Indian Industrial house make!

This brings us to consider a point, what if the head of the family business wants to exit? do we have rules which allow him to do so, or is the rules in the society, family or business, prevent him from doing so?

Usually, patriarchs design the processes and systems which revolve around them, so as to consolidate their position, and to maintain a control over the different aspects of the business, but this also results that the business cannot run without them! This may be great for the patriarch’s self esteem, but could be disastrous for all the stakeholders, if the patriarch was not able to operate for some reason. In fact, I have met many small scale entrepreneurs who claim that they are so busy that they did not have time for a holiday, or even if they did take one, they were too busy on the phone all the time! and then they want me to advise them on why they are not growing!

While there are usually emotional and personal individual reasons for most patriarchs not retiring, which have been exhaustively covered, it is interesting to note that there are other reasons, which compel a member to remain at the helm. Family traditions of primogeniture, have been the norm in societies, royalty or in family firms.

Which brings me to the fact that every family member needs to examine the social, family and business reasons surrounding the family firm, to be aware of such circumstances.

While a work life balance is definitely suggested for every individual (What’s the use of all the money, if you are not able to enjoy it? How much is enough? What are your goals and what are you exactly hoping to achieve? Is there a finish line or does the bar just keep on getting higher and higher? are questions that may help to determine the answers..)

Given the fact that the youth today are becoming more assertive and independent, seeking opportunities outside that of the family business, it becomes imperative that the the patriarch seek options to professionalise or sell the business. Furthermore, the rules binding him in the family business can be re-examined with all the stakeholders to update these with the current environmental realities. There is no reason, that while we talk about stepping into the next century, we, our families and family businesses  still continue to adhere to norms which may be hindering family relationships and family well-being. It may be a time to do a re-think.

The question is, are we ready to take the first step?

 

 

 

 

Done Deal! Few thoughts…

Todays TOI states that Nimesh Kampani has chosen to step down in favour of his son Vishal Kampani as the head of JM Financial.

This is at a time, the report states, when the firm has demonstrated, that it maintained its ability to make deals successfully.  This is a good move at an opportune moment. I have met many patriarchs who refuse to pass the baton on, under the excuse that the next generation will not be accepted by the customers who would prefer to deal with the patriarch, and the younger generation, feel inadequate at the lack of exposure in being prevented from engaging with customers or other stake holders.

It is very difficult in family businesses, especially those, which are successful, for the head to step down. Because this would mean sacrificing the positions of power, status, and sometimes even meaning to one’s life, as the family business may be everything around which his life may have revolved.

there is also the argument, that a business is a relationship business, and that the firm will lose a lot, if the relationships are not maintained, or if the existing customers reject the next gen.

In both cases, the arguments are superficial. Globally, there have been cases of relationship businesses being successfully transitioned, with the next generation still maintaining the traditions and customer service that was provided earlier, so as giving a seamless transition. Secondly, if the choice of the successor is based on merit, then the transition should not pose any issues, for the customers, who will be eventually looking for solutions, more than relationships.  (Controversial, i know, but think about it, would the customers stay with a supplier, if they were not getting “acceptable” solutions to their problems?  “Acceptable” is to allow for the leeway that they may give, for working with slightly different operational styles of organisations)

The last concern, that I have, and I may be completely wrong on this, is to point out that most transitions are successful based on what the retiring patriarch does post retirement. Does he stay out of the business or does he still carry on, as if nothing has changed? Does he have something to keep him occupied, outside work ?

These questions will, in the long term determine the success of any succession which family businesses have to keep in mind. Coming back to JM Financial, this is a good move and let us wish that this leads to more future success!