Joining a family business is considered a privilege for the next generation, but it also comes with a huge responsibility. Very often than not, the next generation finds themselves not so prepared for this fundamental decision of their life. With the growing uncertainty in the market and the rapidly changing business scenario, the young leaders must think and decide with a lot of clarity. It is estimated that India is home to 108 publicly-listed, family-owned businesses, making it the third-highest in the world behind China and the US and is also the major contributor to the annual GDP. The sustained upward trajectory of these businesses has attracted the attention of academia and given rise to multiple family business management and entrepreneurship development programme. With numerous challenges to navigate along the way, let’s look at some which require immediate action.
- The great expectations – The legacy which the family business carries with it is far more important than any monetary gain for the members and especially the patriarch. So the pressure to take the business to the next level is inherent once the young generation decides to join the business. It comes from the deep-rooted belief that the new leaders who grew up in a better environment and with more resources are bound to be the finer versions of the older generation. This might or might not be true but is always lingering on both the parties. To handle these parental expectations, it’s important for you to have a clear dialogue with the members and try to find common ground where you can work on your strengths and also leverage the learning from the experienced lot.
- What role should I play? – The conventional approach was to pass the business directly to the next kin, but the growing complexities call for a more expertise-based approach. This is crucial because landing up in a place where you cannot play on your strengths is not a great way to begin. Start with ironing our any misperceptions about your intent for joining the business. Then identify your strengths and have clear communication with the senior members about how you can use your expertise and contribute to the business. Clear role setting, when done for the entire organization, will also help in creating a culture of professionalism and accountability across the hierarchy. This is one of the major goals of the family business course at MIDAS, for which the student, along with the Coaches have a detailed discussion with the family members. To make this process more effective, most experts around believe that the next generation, along with their functional role, should focus on developing better communication and conflict resolving mechanism for the business.
- What is the right time to join the business? – Today many family businesses have been proactively encouraging the younger generation to work outside their business at the beginning of their career or undergo formal training at an entrepreneurship program before getting inducted into the business. This experience brings a fresh new perspective and also establishes the credibility of their talent. While there is no “perfect timing” which will eliminate the headwinds, the essential driving force will be your commitment to take the business ahead and give it a new trajectory.
A family business comes with its unique challenges, but as leaders of change, the next generation needs to show patience and spend more time on understanding the business first and then steer their way with care and precision. Along with the growing potential of the family businesses in India, its complexities posed for the next generation and the delicate nature of family dynamics has hugely influenced the program design at MIDAS. As a dedicated entrepreneurship college in India, we strive to create an ecosystem to nurture our future leaders and prepare them for their exciting journey ahead.