Family Businesses in India not only form a major quantum of our economy, but also have some unique characteristics. These make them different from other businesses. The spirit of entrepreneurship, a focus on family values, mindfulness of legacy and a tendency to do things differently and quite creatively are some of these. They also face their own unique set of challenges. The Inheritors by Sonu Bhasin takes a look at the dynamics of family businesses in India through a few unique case studies.
Bhasin uses storytelling as a tool to drive many important points about family businesses in India.
Family businesses in India : Professional involvement
When a family business reaches a certain level it is pertinent to bring in professionals. Separation of the ownership from management is something that many family owned businesses have done and contemplated. However, this is fraught with questions and issues that need to be tackled. What kind of model works well here? The different business discussed in the book have all looked at professionals taking over the reins. However, they have followed different models to that effect. Example, at Berger Paints the profit sharing model is used. Other companies have different strategies that work for them.
Who’s the boss?
The case studies give an insight into leadership in the context of family businesses. Traditionally, family businesses have had a strong patriarchal presence. Nepotism and adhocism are often the bane of family managed businesses. In one of the case studies the author makes the following comment:
In a family business, a clear line of leadership is an asset. Many fine businesses have failed due to the lack of an accepted patriarchy.
The book discusses the specific issues pertaining to leadership in the context of family businesses in India.
The importance of communication between the family stakeholders is vital to a family business. The stories draw out the manner in which different companies have achieved the same. Whether it is the family council system at Dabur or the family charter at Marico Industries, the book throws up interesting ways that families have figured out to keep channels of communication clean and open.
Family businesses have their share of family divisions as well. As a family grows over generations many dynamics change. Sometimes, it becomes important to divide businesses and go separate ways. Through the stories narrated here the readers will also get a glimpse into how families have handled these issues.
The gender angle
Do we see a hint of patriarchy in the Indian family business scenario? Is that changing now? Bhasin presents her cases as they are without commenting on what should or could be- but she does question and talk about the role women have played or are playing in the business concerned. This is an area that does require some deliberation. While women are shattering the glass ceiling in the professional domain and corporate arena, when it comes to family led businesses, a traditional mindset and cultural factors come into play.
She brings out diverse approaches followed by these business houses to the involvement of female family members in day to day running of family businesses right from the conservative approach to one where women are involved in day to day affairs of the firm and are an integral part of the firm. The firm Cyril Amarchand Mangaldas exemplifies the latter approach. Some other firms may choose to involve female family members in the business. Still others have doors open for whoever wants to enter in- be it the son or the daughters.
Legacy – boon or burden
While being part of a legacy has its share of advantages, it could well be stressful for the younger generation who have to live up to expectations. The case studies also through light on how the different ‘Inheritors’ handle this aspect.
Storytelling at the fore
The different stories in the book talk about the growth, expansion and challenges faced by family businesses. We get a sense of how different businesses and their owners have navigated and negotiated their way through varied challenges over the years. Some of these challenges include decisions to professionalise the business, intricacies involved in the running of a family business, managing the interests of the family members in the context of a professionally run business and so on.
What I like about this book is the element of storytelling that makes the case studies quite interesting to read. For example, in the chapter on Motilal Oswal Group she talks about how she is feeling a bit cold due to the air conditioning in the group’s office and then moves on to narrate how Motilal Oswal did not know what a fan was in his village in Rajasthan, which used to be seeking hot in the summers.
There is a conclusion at the end of every case study where Bhasin ties up the points mentioned and also highlights the future challenges for the business.
The ethos of the book is clearly encapsulated in the words of Anand Mahindra, who says, in the foreword to the book, “I am sure that The Inheritors will provide insight and inspiration not only to members of family businesses but also to anyone who aspires tone an entrepreneur. Learning from someone else’s story is a very powerful incentive to fashion your own.” For those concerned with family businesses in India, this book is indeed a must-read!
The Inheritors by Sonu Bhasin, 2017
Published by Penguin Random House