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!