My thoughts on the nextgen having to take over businesses that they consider unethical, in Forbes India, March 14, 2018. (http://www.forbesindia.com/article/spjimr/successors-dilemma-to-or-not-to-take-over-an-unethical-family-business/49669/1)
I was speaking in a conference when I was asked about the Silver Spoon kids. This led me to write this article.
In defence of the Silver Spoon Kids, People Matters, January 3, 2018, https://www.peoplematters.in/blog/culture/in-defence-of-the-silver-spoon-kids-family-run-businesses-17144
Three articles (!) published in Business World.
The first is on how family businesses need to stay relevant especially in todays fast changing environments, which are threatening the erstwhile stable businesses. I have taken the example of how some companies have coped with this.
The second is on family members stepping down in favour of professionals and how this would help companies grow, inspired by the recent activities in Asian Paints.
The third article discusses how to raise the next generation in business families.
My latest article appears in the Huffington Post . It talks about some ideas on how one can raise kids without the downsides of wealth and to raise kids who are grounded and responsible. Since this is a constant concern with parents!
I was invited to be a speaker on family business for the family business owners at Cebu last weekend. My topic was legacies in family business and what families need to do, to ensure that they can sustain their legacies.
While the talk was well received, I was fascinated at the cultural similarities in the ways families behave. I found remarkable parallels that one could derive between Indian families and those in the South East Asia region. It was an honour to be speaking in the same forum as Her Excellency Leni Robredo, The Vice President of the Philippines and Joni Aboitiz, a fifth generation family member.
Was touched by the warm reception and the fascinating experience of addressing a packed hall of entrepreneurs from all over South East Asia!
Ok I must confess that this piece in BusinessLine was somewhat not quite recent, but highly overdue.
This took some time to get the research, but I consider this as a fascinating story of how one family patriarch, Y Hamied of Cipla has shown vision in ensuring the longevity of his firm.
This is not new, and the Japanese have been doing this already for centuries, resulting in perhaps some of the oldest firms in the world still being Japanese. But the fact that this has been done in India within the purview of the law, to secure the single largest shareholder is a first.
The issue of LGBT in Business Families has never been discussed. My take on the issues that business families may have to face, in today’s Economic Times. I have addressed implications on marriage, employment, family dynamics, succession planning, level of comfort for the family members and social relationships.
Two related articles in the FT, “Tears in Tokyo” and “Dealmakers salivate over succession survey” caught my eye. The articles deal with the lack of succession planning, and the first article speaks about how small and mid sized organisations are being sold to other buyers. The second article describes how the M&A firms are awaiting the results of a survey, which the listed companies have been asked to fill in, by the Govt. of Japan seeking responses for their succession plans. the lack of which, indicates suitable M&A targets.
In a traditional economy like in Japan, large number of businesses are still family owned and family run. The lack of successors and/or succession plans have led to the existing generation seeking to sell these off, with the co-operation of the next gen who would prefer the sale proceeds to start their own new business with, rather than take over the headaches of the family business.
This is a sign of things to come, and if the current trends are any indication, then it is a matter of time before we start seeing similar scenarios playing out in india too. Families will have to overcome their long held beliefs that the family firm is a long term family wealth, and maybe, this would also influence successor traits in the long term as each successor would be expected to operate like an investor rather than as a family business owner. This would have repercussions on the training and expectations of the next gen. This would also need a separate skill sets for these next generation family members are expected to continue in the longer term.
this would mean that families would have to consider including these skills in the training of the next get. are we ready?
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!