Almost 85% of all businesses in India are family run businesses. Prestigious institutes like IIM A , IIM B , ISB and SP Jain starting Family Managed Business Courses and running them successfully for over last 5 years is a testimony to the fact that families today pay a lot in terms of attention and premium in grooming and making the next generation ready to take over business. I have seen that a number of my close friends (who come from business families and are planning to join it ) are skeptical and insecure of what lies ahead in their path. Especially when it comes to second generation entrepreneurs (SGEs) they have a lot to face in terms of meeting family & employee expectations , lack of self-belief, being unsure about how to work with and convince the older , more experienced lot in the company , attempting to change former business processes in order to keep pace with the their right here right now attitude and aligning business focus with innovative practices.
Through my interaction with corporates visiting IIM Ranchi (most of who were a grey haired lot), I tried to understand what they felt about the younger generation. I had a very interesting conversation about SGEs with one particular HR head who had been working in an Indian - MNC for the past 26 years. This leading Pharma company had recently changed hands from father to the next generation London educated young and dynamic daughter (I guess I have given enough clues ;)) He said,
“Today’s generation has a lot of ideas and new changes which they want to implement as soon as they come into the organisation. They feel that they can just turn the organization head over heels by these changes. They may be capable of doing it, but a organization has some deep rooted values and culture and any change is going to disrupt the organization's normal functioning."
This may well reflect a general sentiment of employees working in a "Family Firm ".They believe that the young generation, who have had it easy and have been served the business empire on a silver platter, is rash and overtly ambitious at taking decisions. However those who believe that life of second generation entrepreneurs is a bed of roses should bother thinking again!!
Being a SGE is a double edged sword. On one hand you have been handed over a well-established platform, a legacy which you are to develop and enrich. On the other hand you are entrusted with living up to the brand name, maintaining the standards and level of trust and expectations of the people. However SGEs must understand that this the whole challenge of it. You have been lucky enough and more privileged than 1st generation entrepreneurs in a number of ways:
1) You have been brought up in an environment where working was all about passion, hard work, risks and rewards. This culture has been inculcated in you right from toddler-hood
2) The hardest part of the organizations growth life-cycle is over, the business is set up. You have to make sure the business grows and matures. This part though not easy is definitely less challenging than starting an entire business from scratch.
3) You have not only inherited the business , but you have also inherited a legacy , a name , a brand each of which takes a fair share of perseverance , hard work and to a certain extent luck.And the best part , customers trust you already !
4) And finally , you have the luxury of working from a decent office while your forefathers started off in a “Garage” :)
The most important function of SGEs is to have a daring and ambitious growth strategy. However I believe that though SGEs can be bold, they have a limit for their boldness as they do not want to lose ,what their forefathers have achieved, just because of their bad decisions. As a result by comparison SGEs most of the times would be less risk taking than the earlier generation who had absolutely nothing to lose.
Our country has seen likes of hugely successful second generation entrepreneurs such as Mukesh Ambani, Azim Premji, Anil Ambani and Naveen Jindal. However with more than 85% business in India governed by families by 2013, for SGEs to survive this highly competitive environment to develop skillset necessary to manage and organize business. A 2013 survey conducted by PWC about family businesses in India quotes that over 72% family businesses do not survive above 3rd Generation.Thus it is the responsibility of the SGEs to ready themselves to take up this challenge and the onus to professionalize the business and make it compatible to the global standards, to recognize the need to separate family & firm and to strive for continuous innovation lies on their shoulders.
And with increasing importance of these objectives the SGEs may very well be the reflection of a nation which is changing for better.
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