Many Indian family businesses have expressed that they have faced severe challenges in the last couple of years for their family businesses to find their long-term navigation coordinates.
We came across some of those family businesses whose long-term navigation coordinates are found missing, and the near-term ones were also almost non-existent or cloudy at best.
Let me clarify what I mean by navigation coordinates by sharing a few of their stated statements and questions as below:
Family Business #1:
“COVID has given us some time to think, contemplate and pause. We realised that we don’t have any clear and convincing strategic foresight (let alone generational foresight) of how ownership and brand identity of our planet-wide product will be after this first-generation of our family….”
Family Business #2:
“COVID has given us time to think and decide of all that we had so conveniently been not addressing. We recognize the long-term pain and even peril that it may create – we don’t want to be caught off-guard or unprepared. It seems we already are delayed.”
Family Business #3:
“I wish we had followed what you mentioned in the last meeting three years ago – the planning for succession. We realise that the planning for succession is critical, and we have realized quite late. Can something be done to safeguard the part that is left, and if possible, can you help us resurrect the part we have already lost?”
Family Business #4:
“In our current planning for succession that you are already are helping us with – Why taxable assets, risk assessment of brands, liabilities, multi-region taxes and debt & financial planning required before a successor is chosen is critical?”
Family Business #5:
“We don’t know if today we should continue as a family business or look for transition to professionally run & managed family business – the absence of our succession plan and our at present long-standing fragile family dynamics has raised questions like should we have the family successor to lead the business or an entirely professionally-run set up to protect our future growth – frankly, we don’t know which way? & Why?”
We heard many such similar voices and could not wrap our minds quickly or mainly hearts around the immense pain and worry they were facing.
The first thing we would like to share here are misconceptions that cause family businesses such pains and lostness making them lose confidence in themselves, lose growth opportunity, and further exacerbate the relationship between beauty and love in the family.
A few of the several perspectives that cause succession related pain & overall lostness in the family business are:
Succession is an event. It doesn’t require formal planning
A succession is a matter of choosing or following our tradition where the elder brother runs the show
A succession is a matter of who will get the business to run
Succession happens automatically while co-working for a long time under family patriarchs
Succession is a matter of decision, and we could have any one of our elder children to be picked one day to run the business
Succession is less than a month event to be announced and followed then
Succession means choosing an heir to run the business, close to retirement or post-retirement of the currently running generation
All the above and many more deeply rooted traditional thought templates create misconceptions that do not let family businesses take a sound and rightful approach in augmenting their success & abundance through a formal, systematic, risk-aware, long-term love & growth-centric method of succession planning
The questions family business can ask themselves to figure where they stand and how to gain direction on the matter of succession are as follows:
- Do I see my family enterprise in an institutional sense, or it is a mere business that generates wealth?
- Do we have a joint-vision or shared vision that we diligently worked upon and imagined individually? Does this shared vision clarify the nitty-gritty of challenges & opportunities that we are to face and win? Is this clarification we all can see, feel and debate openly about how to lead the family business there and what kind of leadership will be critical to achieve the same? Do we have successors to carry this on? What does this envision future demand from us to secure the successor’s fit-for-purpose strength in leadership, behaviour, acumen, and talent to accomplish the same?
- Would a jointly created family constitution for our family enterprise be healthy & effective for designing the objective, fair, and successful process for succession planning?
- What is the picture of risk that we own now by operating at various global locations? Should this be a part of significant integration in planning succession? Should our global identity and brand be scrutinized and aligned to our envisioned future, including how it influences our succession planning, especially the transition efforts and effectiveness?
- Would our wealth and taxable investment portfolio be also taken in complete independent effectiveness assessment to measure our gaps to be filled via succession planning and transitions?
- Who would say who the suitable successor is, and how do we ensure that the successor’s expected envisioned future is delivered in an honorable and successful way? Should there be an objective approach where identifying a rightful successor is designed unchallenged?
We hope the above puts you in an effective thinking zone for initiating proper dialogues to help you figure navigation coordinates further.
We have been hearing to plights of those struggling and the joys of those who have been thanking themselves for taking a timely formal structured approach for their constitutionally sound succession planning and transition process initiative.
I would encourage you not to delay giving this topic your thought.
It takes a decade of planning for succession and transition depending on the size and scale of the business before it puts the successor in an exponential acceleration for growth, preserving still the core harmony and love in the family, making all abundantly prosperous and happy.
I hope this helps!