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Family-Owned Businesses (FOBs) |
Globally, FOBs play a very important role. In the US,
around 70% of the top 1000 companies by turnover would be FOBs. India isn't far
behind. About half of the top 50 Nifty firms are FOBs. About 50 % of the top 100
companies by market cap in India are FOBs – and that figure has remained almost
constant since 1991. Of the top 500 companies by turnover in India today, around
80% are FOBs. In a rapidly growing Indian economy, FOB’s contribution has
improved over the last two decades. FOB remains the predominant form of modern capitalism in India. The family-owned businesses (FOBs) in India, like its global counterparts, offer commitment, stability, long-term growth centricity plus resources-laden companies.
FOBs in India can be classified into following major categories:
1. Size: Small, medium, large and conglomerates .
2. Generation/Longevity: First, Second, Third or fourth generation of FOB enterprises .
3. Holding : Closely-held/widely-held or Unlisted/listed companies.
4. Management: Family-member managed or outsider-professional managed .
5. Location: Within India or outside-India or both .
Mentoring of family-members of FOBs is a different cup of tea despite the fact that much of the owner-leadership of FOBs is now being trained in the business schools. There are many who think inducting family members into a business comes at the cost of meritocracy; there are others, who suggest that 'business families-members' and 'hired- executives' are not necessarily polar opposites. What is fascinating is the continuing resilience of FOBs in the new context of liberalization. Those, who have survived beyond the second, third or fourth generation, have undertaken herculean efforts to transform themselves, have managed inter-generational succession, have kept family conflicts out of board rooms and have incorporated managerial capitalism.
From mentoring-point of view, FOBs present a very unusual challenge to the mentors- the career-graph of business family members is, generally much steeper than their “hired” counterparts. Their progression to the corner-room is much faster and this is where, the challenges lie. The non-alignment of the learning-curve and the career progression-graph of a member of the family owning the business is very much like a ticking bomb waiting to explode and when it occurs, it brings down the performance of company several notches, usually accompanied with scaled exodus of hired-executives and denting of confidence of the stakeholders in the business. A half-hearted or less-prepared family member is a potential danger for the business.
The graph-below depicts the challenges faced in career transition by members of family owning the business:
CEOVista designs and executes its mentoring services for members of family owning the business in a manner that meets the ground zero needs and takes into account the varied factors of each mentorable- situation. Some of these factors which are given due weightage in designing the interventions are listed-below:.
1. Engagement-stage: early, mid or late career
2. Personality and Academics related features
3. Current, future and potential role
4. Business-family work-culture and dynamics
5. Explicit and implicit expectations of the stake-holders
In addition to performance-mentoring, CEOVista offers few more services for FOBs:
1. Strategic Advisory Engagement : to generate a clear picture on what success looks like in numbers and how to achieve it.
2. Good practices Guidelines : policies for conduct of members, career-growth of members, member's entry into or exit from the business.
3. Succession Planning including Role-Clarity : Family Council formation, Family Constitution drafting etc.
4.Conflict Resolutions : to shift focus from current problems to future possibilities; Stabilizing the conflict- situation, calming the conflicts and soothing the fears.
When focused properly and structured right, the FOBs achieve wonderful heights - but when it loses direction and turns on itself, it can culminate in conflict and division. Sadly, it can even destroy family-relations and businesses.
Please contact us with details of specific support required at info@ceovista.com
1. Size: Small, medium, large and conglomerates .
2. Generation/Longevity: First, Second, Third or fourth generation of FOB enterprises .
3. Holding : Closely-held/widely-held or Unlisted/listed companies.
4. Management: Family-member managed or outsider-professional managed .
5. Location: Within India or outside-India or both .
Mentoring of family-members of FOBs is a different cup of tea despite the fact that much of the owner-leadership of FOBs is now being trained in the business schools. There are many who think inducting family members into a business comes at the cost of meritocracy; there are others, who suggest that 'business families-members' and 'hired- executives' are not necessarily polar opposites. What is fascinating is the continuing resilience of FOBs in the new context of liberalization. Those, who have survived beyond the second, third or fourth generation, have undertaken herculean efforts to transform themselves, have managed inter-generational succession, have kept family conflicts out of board rooms and have incorporated managerial capitalism.
From mentoring-point of view, FOBs present a very unusual challenge to the mentors- the career-graph of business family members is, generally much steeper than their “hired” counterparts. Their progression to the corner-room is much faster and this is where, the challenges lie. The non-alignment of the learning-curve and the career progression-graph of a member of the family owning the business is very much like a ticking bomb waiting to explode and when it occurs, it brings down the performance of company several notches, usually accompanied with scaled exodus of hired-executives and denting of confidence of the stakeholders in the business. A half-hearted or less-prepared family member is a potential danger for the business.
The graph-below depicts the challenges faced in career transition by members of family owning the business:
CEOVista designs and executes its mentoring services for members of family owning the business in a manner that meets the ground zero needs and takes into account the varied factors of each mentorable- situation. Some of these factors which are given due weightage in designing the interventions are listed-below:.
1. Engagement-stage: early, mid or late career
2. Personality and Academics related features
3. Current, future and potential role
4. Business-family work-culture and dynamics
5. Explicit and implicit expectations of the stake-holders
In addition to performance-mentoring, CEOVista offers few more services for FOBs:
1. Strategic Advisory Engagement : to generate a clear picture on what success looks like in numbers and how to achieve it.
2. Good practices Guidelines : policies for conduct of members, career-growth of members, member's entry into or exit from the business.
3. Succession Planning including Role-Clarity : Family Council formation, Family Constitution drafting etc.
4.Conflict Resolutions : to shift focus from current problems to future possibilities; Stabilizing the conflict- situation, calming the conflicts and soothing the fears.
When focused properly and structured right, the FOBs achieve wonderful heights - but when it loses direction and turns on itself, it can culminate in conflict and division. Sadly, it can even destroy family-relations and businesses.
Please contact us with details of specific support required at info@ceovista.com
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