Families Need to Find their own Answer to Professionalize Business
Marico Chairman gave #6 tips on running family businesses.
Working out a way out of hiring an external professional to run the family business while keeping intact the values and tackling the difference of opinion among family members is the mantra for professionalizing family managed business. There is a chance of family may bounce back if any mistake done by the professional. With the changing times have been growing clashes among qualified youngsters and retiring elders while deciding who will be the front of the family.
It is important for the entrepreneurs to have family counseling, as in the large family run businesses there have been people with differing vision, ambitions and way of doing things. It is very important that all this issues should be discussed openly. The recurring things like lifestyle and selfish race to be the front of the company adding to the complexity of professionalizing family managed business. Hence talking about successive ways of professionalizing the family managed businesses learned through his legacy of entrepreneurial journey over the years Harsh Mariwala, Chairman, Marico Ltd. spoke exclusively to Entrepreneur India. Following are the excerpts from his interview.
Have family counseling
Key thing is to have family counseling as in the large family run organization you always have people with differing vision, ambitions, way of doing things and it is very important that all this issues should be discussed openly. The family has to find its own answer about the approach towards elders retiring and the qualified youngsters joining the business as there is no right answer the family has to find its own answer. We have seen very complex families. I saw in my family business that there is a huge potential to expand and grow. We can only expand and grow if we improve or hire the right quality talent and I saw that it was the only way forward. Ultimately behind changing the structure of the organization the key reason was have a sustainable growth.
Hire highly qualified people with growth but not initially
When you are a small organization you will never need highly qualified people. When I say professional I mean the person who will join you on merits he need not be the MBA he could be just graduate. We had to recruit some people who were working at very low level at Hindustan Unilever, not highly professional and qualified. Because, there was no way if I had taken somebody higher and we can’t afford the cost nor they will be effective because I think they would want much larger scale. Every time there was attrition in my company. I wanted to improve the talent when I started growing. Whenever there was vacancy we use to hire a person with higher talent and salary. I look for people who are self motivated.
Create values and build cultureEvery founder brings something to the table and it is very important to identify what is that value he has brought to the table and that is known as founder’s mentality. So these are the things like values in the
company. I have spent a lot of time in building the culture in the organization and it is very difficult. It is very important that the organization understand what culture it needs. It is very important that the management sets the right examples. Finalizing value is very easy but building a culture is very important. Also the key challenge for the organization is reinforce values.
Create the culture of innovation
For being an innovative organization creating the culture of innovation, culture like people enjoy working, values like openness and risk taking is important and we wanted people to take risk. But if I punish failures then risk taking will lead to failures and it is not going to succeed, and that to me it is very important in attracting talent, retaining talent and people enjoy working in the organization
Trust your employees
To build that trust with employees we gave the right of self authorization to them. They don’t need to go to their boss if they spend something on behalf of the company. We did away with the muster in the organization, allow them to take sick leave because we trust you and maintain your own leave records. People should enjoy having dialogue with anybody else, don’t need to take permission to talk to somebody else in the organization.
Protect the interest of the board
At one level I have taken a successor who is managing the company. On the other hand I had protected the interests of the board and the board will play a very important role if something happens to me to ensure that whoever is managing the company he is the right person and fulfill the vacancy.