Family businesses are realising need for professionals to handle front-end roles as well, says expert

Ease of Doing Business for MSMEs: Family businesses in India contribute 79 per cent of India’s Gross domestic product (GDP). However, due to a lack of succession planning and professionalism, many family businesses are not able to scale and transform from a promoter-driven to a professionally-run enterprise.

Family businesses are realising need for professionals to handle front-end roles as well, says expert
The journey of the younger generation entering the family business can be managed well if it is accomplished in phases, said Chandrasekhar.

By Prerna M

Ease of Doing Business for MSMEs: While the roles of professionals entering a family business were earlier constrained to production or back-end, today because of education, know-how or seeing other companies worldwide, family businesses are realizing they need professionals for even front-ending roles, said TD Chandrasekhar, Partner at family business-focused consultancy firm BAF Consultants. Speaking to FE Aspire, Chandrasekhar noted that every family business now knows that to scale up they would need professionals working with the family as a team.

Initially, family-run businesses in India were in fact hesitant to let professionals enter their business, but now that has changed, according to Chandrasekhar. Family businesses in India contribute 79 per cent of India’s Gross domestic product (GDP). However, due to a lack of succession planning and professionalism, many family businesses are not able to scale and transform from a promoter-driven to a professionally-run enterprise.

Chandrasekhar suggested that individuals entering their family business must become professionals themselves before leading the professionals in the company. He also highlighted the importance of family businesses educating their younger generations to become highly skilled professionals.

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Citing the example of Reliance Industries founder Dhirubhai Ambani who called his elder son Mukesh Ambani his ‘intellectual equal’ and encouraged him at the age of 14 to understand their business, Chandrasekhar suggested that younger generations of the family must be encouraged from an early age to be involved in the decision-making. 

The journey of the younger generation entering the family business can be managed well if it is accomplished in phases, he added. “The first phase could be to expose them to the business and the values of the family, the second phase can be to work in another organization as a professional, and the third phase is to come up the ranks by building skills instead of becoming a department head as soon as they enter,” said Chandrasekhar.

He also stated that the older generations need not exit the business, but need to let go and give room to younger generations to thrive in the family business. “Give wings to the youngsters very early and make the youngsters respectable business leaders in society, not your shadow.”

Also read: How emerging enterprises, SMEs can unlock value through corporate governance practices

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