I recently attended a conference on family businesses in India, where majority of the audience were businessmen running mid-sized companies. During a panel discussion on entry strategies for new generations, one of the panelists, an advisor to family-run enterprises, cited a real life incident, a rather unique case. The son of a certain managing director, second generation, assumed he would be handed over directorship of his father’s company after he completed his education. He walked in on his first day to office and demanded an air-conditioned cabin. His father, the sensible man, wanted sonny boy to start on the shop-floor as a management trainee, just like any new employee would. In true filmy style, the son, angered by his father’s decision, took his dad’s BMW, drove far out, phoned his dad and threatened to bash up the car, commit suicide until his demands were met. The father, unable to handle his son, passed the phone to his mother and called this very panelist to take some critical advice. For the time being, he told him to commit to his son’s demands (so he comes back home alive with the BMW) till they decide on a future strategy.
Of course, this story got a lot of laughs from the audience, but I’m sure it was far from funny for the father. Quite tough, a good business decision vs. the tricky task of parenting a spoilt brat. (Personally, I thought this boy was suited for Bollywood and not business.)
This is infact a dilemma most family-businesses in India face-absorbing new generations into the company, creating roles and maintaining a fine balance-between professional and personal life. While some, like our pal, assume it’s their birth-right, others are made to earn it- the latter being the right way to go, in my view. Also, in the panel were a few entrepreneurs (second and third-generation) who fell into the latter category. Said one, “My MBA never taught me who the right courier company was for my business, why we chose certain distributors over others, our accounting systems, et al. I learnt everything sitting with the ‘Munshi’ on the shop-floor.” This same guy, today, has started his own business in real estate, far removed from his father’s business in chemicals, but it was more than obvious that the training and education he received back home was far more worthwhile than a foreign degree. I later learnt that he became an independent entrepreneur, because he ended up having differences with his father and chose to go his own way. However, at least one can say he’s proved his mettle so far and not demanded fame on a silver platter.
In some of the family businesses I have covered for Entrepreneur (like the NR Group in Mysore or Virola International in Agra), they bet their success on the entrepreneurial spirit of the new generation. In fact, in both these companies, every generation that enters has to create something new-be it a new vertical or new business division altogether, whilst maintaining the basic ethos and essence of the family enterprise.
From what I gathered in these interactions, it’s certainly worked better for both the newcomers and the business in terms of personal and professional growth. A younger generation brings in creativity and high energy, while the older generation continues to keep culture and principles of the organization in check and of course, play the important role of mentors. A fine balance, if achieved, can most certainly fuel the entrepreneurial spirit of our future generations, given that 90 percent of businesses in India are family run.