Passing on the Baton
There is good judgement all around and the larger consensus is not to refute what young brings to the business but rather try to balance the new thinking with the old style of doing business
India has an overtly strong family-business culture with more than three quarters of all companies, public and private, being family-owned and can include everything in between from unsung millions of modest firms to corporate giants.
Most of the well-known companies at some point had listed their shares at the stock markets, thus opening their ownership beyond the ranks of the families that founded them. Yet even among so-called ‘public’ companies, many remain controlled, or at least to some extent influenced, by the very same families. Indeed, the majority of businesses are familycontrolled.
The transfer of power in a family business has always been a matter of debate, sometimes heated ones. However in 21st century, where everything is changing fast, there is also a notable ease in transition being noticed in family business where one school of thought is that the dilution which came into being in age-old business practices is not just good to have but it is a must.
The second school of thought is that old businesses can continue the way it was operated by exiting family members with the help of a professional team at the helm and the young member starts his own line of business which often are not in line with the existing business.
Most importantly, there is good judgement all around and the larger consensus is not to refute what young brings to the business but rather trying to balance the new thinking with the old style of doing business.
The next generation members, who are often Passing on the Baton educated and trained in world class institutions, might not find it as challenging to take the legacy forward. In this issue, we have focused on the second (or third) generation leader, who have carved their own niche or tried to explore a new dimension in the existing businesses. In the same vein, we have also captured the legacy business of the Ayurveda industry which has strong family business presence, is slowly becoming a consumer lifestyle choice.
As new players like Patanjali should be credited for pushing it forward, few early movers in this sector like Dabur, Baidyanath and Dr Vaidya’s are trying re-establish their brand value with new products and aggressive marketing. It has not been an easy year for start-ups and most of all for the e-commerce sector. The sector while seeing an uptick in sane capital has fast lost its sheen as a professional and entrepreneurial choice. People (especially midsenior to senior level) are sceptical to go back to the sector as around 15,000 employees were fired by their e-commerce employers over the last 20 months or so.
(This article was first published in the June issue of Entrepreneur Magazine. To subscribe, click here)