VIA Entrepreneur Forum holds talk on
‘Succession Rationale of Family Managed Business’
The Entrepreneur Forum of VIA hosted a program titled ‘ Succession Rationale of Family Managed Business ‘ which had Mr Rooshad Patel Director High-Tech Resistors Pvt Ltd, member CII, as the Guest speaker . According to him, the universal truths which face each and every one of us are – we are all going to die one day and no one is aware of the date & time when we depart this world. If these are truths which cannot be avoided does it not make sense to have a structured, gradual and calibrated succession plan.
The realization that one is not as quick and as ready for change as in the past and the realization that “The only constant in this world is that there will be change” strongly calls for succession planning.
The recognition of the stark fact that every person at the helm of affairs has an “Expiry Date” or “Best By date” in terms of his/her being able lead from the front and if one wanted the company to have a life of its own it was time to plan his/her departure.
The recognition of the fact that the organization being a living entity needs the infusion of new ideas to grow and more importantly a fresh look at everything. Otherwise may end up lacking in the right perspective for today needs. Therefore succession planning is nothing but the start of the process of “Letting Go”.
The Process of Letting Go :
Keeping in mind the adage ‘change is the only constant factor of life’, the successful succession planning will have to be done in two cases, one when there is only one successor and when there are several successors. The first case is relatively easier, as a smooth transition from one generation to another can be achieved by mutual understanding and democratic process. But in case of multiple successor, the process is much more complex. The founder has to first identify the right candidate who displays adequate leadership capabilities, is a consensus builder and who has a vision for the company. There can be a governing body, with one person as the first among the equals. There must be a family constitution and an informal chat with all members before the succession planning. The principal of day to day working has to be laid down and a flexible time table, which will be periodically reviewed and be tweaked. A clear cut role interchange has to be drawn.
In short the above period was a planned transition period with the successor assuming a more and more active role and the older generation role being progressively reduced to a more passive role. At this juncture he quoted a letter written by Mr. Ghanshyam Birla to his son Basant which gives a fair idea of a very forward looking large industrialist on how his successors should conduct themselves.
In case there are more than one inheritor of the Business one will have to draft & set up a structured “Family Constitution” which lays out roles & goes into details of proposed emoluments & profit sharing. In case there are more than one inheritor of the business – “A family council” is to be formed with clear guidelines to resolution of differences of opinion.
Finally one has to put down in writing the principles of the company, which is actually nothing but reducing to writing the principles we have followed to date and should now form the basis of how we should conduct our business henceforth in order to achieve the company’s Mission Statement. Ideally what this process should be is a process where the different generations of family & business learn to work together & appreciate the different competence, skills & attitudes of different generations.
Earlier, Mr Akash Agrawal, Chairman of VIA Entrepreneurship Forum made an opening remark and said this was the second program we had organised under this forum. He said next generation is not very keen, serious to join his/her father’s business. Mr Atul Pande, President – VIA welcomed the Guest speaker with floral bouquet and advised the younger generations to learn from their parents, who possesses good knowledge of business and grab opportunities, which is readily available within their organisation and start working at a grass root levels and worked in departments like Stores, Inventory, Sales, Finance, HR, etc. He also shared his success story and how he manager his family businesses. Ms Anita Rao, Convener of Entrepreneurship Forum proposed a formal vote of thanks.
Live from the session on "Succession Rationale of Family Managed Business" by Mr.Rooshad Patel
Posted by Vidarbha Industries Association on Friday, September 15, 2017