Seeds of Success

“What’s so great about working for that family enterprise?” – quipped a successful CEO of a large multinational enterprise to the gentleman. “You are intelligent, well educated, you have a mind of your own. Why then? There’s plenty of money outside. You will get global recognition. You can travel worldwide. You will be entitled to Five Star holidays and can play golf during your spare time. Not exactly spare time – you can actually play golf anytime you want, even with your clients and get them to sign contracts.”

The young man was still not impressed. And was getting impatient. The professional CEO had a puzzled look on his face. The young man then asked the Prof CEO – “Have you ever personally rushed any of your employee’s relative to the hospital? And have you visited the hospital to check on the well being, more than once?”

“Ah, that’s no justification. Why be a mere soldier when you can be a King?”

The young man corrected – “Loyal soldier. Not mere.”

“This is ridiculous. This is a feudal mentality. I am shocked to see this in this era and age.”

“Right you are! Feudal indeed. Namak toh khaya hoon. And yes, food is provided every day.”

The professional CEO still couldn’t get it. The super successful global CEO( as he thought he was), was bewildered that he couldn’t convince this mere soldier to switch sides. What is it that the family is offering this bright spark and holds him to ransom? How have they managed to put him in the golden cage with resort like perquisites? ( Any inference to the recent “Golden resort” is purely coincidental).

Isn’t the above phenomena true with most family enterprises? And also with so called political dynasties. The members hardly speak up against the family. They defend them through thick and thin. And they would like to ensure that the family is always at the helm despite the organisation having many more capable leaders to run the show. This love for the family is unimaginable.

Perhaps that is one of the secrets of the success in the family enterprises across the globe. They value their employees. A small touch of warmth that they provide, does the wonders.

Some interesting points about family enterprise that various researches indicate:

• A feeling of “I feel loyal to my organisation” is far higher.
• Employee retention and longevity is definitely high.
• There have been many instances of employees' families generations working in the same family enterprise.
• High levels of productivity including multi-functional-tasking by employees.
• Interesting and intriguing sentiments by the top employees - "I know I can never be the number one nor do I want to be one. I am just happy to be of support." Unlike the quest for power that happens in the professionally run. (Disclaimer: -The infighting for power amongst the family members if at all, is not considered in this).
• Customer’s faith towards family enterprise is far greater as there is an element of trust embedded. This is really big.
• Across diverse business interests and across generations in the family, it is  the “Core Value” that binds them together for decades. This core value is the reason for success, despite the vagaries of the market place.

And so on…

Does this mean, it is a cakewalk for the family businesses? Certainly not. They strive hard to establish themselves. Hard work, productivity, value for money from employees are significant. They concentrate to provide a clean, simple environment than to provide a luxury laden ambience. Small family enterprises are more often training grounds and thus poaching grounds for bigger multinational competitors. Certainly there would be some percentage of employees who’d jump across for the “greener golf course”.

While, the family balances to manage the above factors, there are a few things which they need to be wary of. As per studies, only about 30% of family and businesses survive into the second generation, 12% are still viable into the third generation, and only about 3% of all family businesses operate into the fourth generation or beyond. Some sample questions that arise in their minds – I've built a great business but my children are not ready/interested in it. My father built a great business, but I am not a good fit to take it to the next level. Our family-owned business has family issues affecting the business. Our older generation cannot/will not 'let go'. We have a lack of the right talent as family members without skills or experience occupy management positions. Etcetera.

The key to longevity of success depends on the critical nurturing of Management Succession Planning, Ownership Succession Planning & Leadership Development. It is as important as the business itself. 

Organisations will thrive. Political dynasties will thrive. 

Yes, call it SuccesScion Planning!