Category Archives: Family Business Governance

Family Business: Issues that most often need to be addressed…..(Raju Swamy/ February 08, 2016)

Family Business: Issues that most often need to be addressed…..(Raju Swamy/ February 08, 2016) 

1. Stagnation, leading to Conflict
2. Absence of Accountability
3. Resistance to ‘Letting Go’ by the Older Generation
4. Absence of a Retirement Policy
5. Succession (Merit vs Seniority vs Equality vs ‘Right’ vs Nepotism)
6. Rewarding Performance
7. ‘Future’……Surprisingly, few Family Businesses genuinely, and professionally, show concern for mapping a ‘Future’
8. Absence of unambiguous Formal Workable Organization Structure
9. Listing of Values and Beliefs and Commitment to them not serious and firm
10. Understanding of ‘Stake’ in Success or Failure
11. Communication (Informal/ Incomplete/ Not Transparent)
12. Absence of Formal Business & Performance Reviews
13. Ambiguous Business Leadership
14. Ambiguous Family Leadership
15. Not understanding Branding, and the Power of Leveraging ‘Unity’.

Raju Swamy                                       
Founder
& Advisor to Family Business
PROMAG Consultancy Services

Apt. 206 Brigade Rathna
42 Ranga Rao Road
Shankarapuram
Bangalore – 560004 INDIA
Tel. +91-80-26676298/ Cell: 9845271498
Email:
rajupromag@hotmail.com
www.promagconsult.in
www.familybusinessadvice.wordpress.com   (Blogsite)
Strengthening Family Dynamics for Family Business Growth…….since 1985

 

Family Business: Mails to my Clients – 14 – A Note prior to my 4th. Round of Individual Meetings: I do feel it is about time that ‘Real’ over-rides ‘Convenient , Friendly, Safe Opinion’ if we are to progress further (Raju Swamy: July 2012)

Family Business: Mails to my Clients – 14 – A Note prior to my 4th. Round of Individual Meetings: I do feel it is about time that ‘Real’ over-rides  ‘Convenient , Friendly, Safe Opinion’ if we are to progress further (Raju Swamy: July 2012)

Before starting my 4th. Round of individual Meetings, I need to set out some issues that keep bugging me…….it is not about what is right or what is wrong…..it is about reality…….I do feel it is about time that ‘Real’ over-rides ‘ Convenient Friendly/ Safe Opinion’ if we are to progress further:

  1. There does appear to be a ‘Family’ Brand that all of you seem attached to, from a Social and Societal point of view, and are proud of, and which has evolved over 100 years.
  2. However, I am not sure that the attachment to the ‘Family’ Brand is equally strong in the 4th. Generation, and is likely to weaken further in the 5th Generation unless ‘Re-Juvenation’ takes place right now, at the meeting point of the 3rd and 4th Generations.
  3. When it comes to the ‘Family Business’, Business Brand Attachment as an Umbrella of Businesses appears to be weak, almost all across the board.
  4. Concern for Individual Family, Individual, Individual Business as a permanent ‘right’ or ‘property’ or entity, appears to outweigh any considerations of thinking of the XYZ Group as a ‘Father Entity’ that nurtures individual companies or businesses for the overall mutual good…..on a Long Term basis.
  5. I see a relatively ‘Soft Concern’ – almost bordering on defensive concern/ reaction to Market conditions, business performance, need for growth, need for change with the times, need to look medium and long term, need to be ‘aggressive’ when required…..
  6. There is strong resistance to
    6.1. ‘Exploration’ and the costs associated with it
    6.2. Professional Networking,
    6.3. ‘Sticking one’s neck out’
    6.4. ‘Strategizing’ with clear focus and aspiration
    6.5. Treating Business with an entrepreneurial zeal……..and enjoying the experience.
  7. An analysis of Real Growth needs to be understood:
    7.1. Over the last ten years, physical landed property value would have appreciated many times.
    7.2. Business Growth percentage, for each business, would vary enormously if compared in Rupee Value, and in terms of sale of Physical Units, and in Number of actual off-warrantee equipment servicing. The same logic would also apply to the manufacturing business..
    7.3. What therefore is the Net Growth in Business, or ‘Real Growth’? Are you really growing or is there an element of Stagnation?
  8. Family Managers have a much larger role to play as ‘Entrepreneurs’ to promote success and Growth, and realize their own aspirations, within self and within Society. However, sensitivities within the Family in Business may not always bring desired results, and adjustments to mutual sensitivities may actually lead to FMBs – Family Members in Business – settling to a ‘safe’ pattern of business existence, and at the worst, start developing the traits of glorified employees with simple bureaucratic, hierarchical sensitivities. Obviously, this is also a reason for possible Stagnation.
  9. The answer to the Above could be ‘Professionalization’: In a recent article by Harsh Mariwala, Chairman & MD of Marico Ltd. (Saffola and Parachute) in the Economic Times of July 14, 2012, titled “Professional managers can help family businesses grow” he makes a number of important observations based on his experience of being part of a Family Business:
    9.1.  “The transition towards professionalisation is crucial for a family business. In such an enterprise, typically, members of the family handle virtually all key aspects. They take most decisions with or without professional qualifications or business exposure. However, a mix-up between ownership and management could lead to conflicts in decision-making. I have seen organisations where relationships among owner-manager siblings get too complex.”
    9.2. “Finally, the business wilts under emotional strain and lack of business focus. Interestingly, the seeds of such a decline are sown during growth itself.”
    9.3. “Families could differ over the pace of growth and the investments required or eventual aspirations. This eventful phase in the scaling up of an enterprise is crucial and needs careful handling. A key institutional decision that needs to be taken is about the role of professional managers. My experience with professionalisation has been excellent. Since I stressed on professionalism, Marico’s business has grown 50 times — from Rs 80 crore in 1990 to Rs 4,000 crore in 2012.”
    9.4. “The dilemma before owners is not whether to professionalise. It is about when to do so. Scaling up business requires scaling up the organisational apparatus and management.”
    9.5. “Usually, there comes a point beyond which the owner family cannot meaningfully organise and manage the business. If a family business does not professionalise in time, it could end up restricting its growth orbit.”
    9.6. “I do, however, reckon it is natural for family businesses to be and stay confused about the need, suitability and timing of inducting professionals.”
    9.7. “I recommend that a family take time to get concurrence. It is also important to send out a unified and sustainable signal to build a good brand in the talent market, to attract the best possible hands. This strategic clarity on recruiting professionals enables the owner family to tap head hunters with a clear brief, precise needs and realistic targets.”
    9.8. “A family business may have to struggle to overcome the initial challenges of the professionalization process. My experience is that it pays to be resourceful in this struggle. For instance, it could take time before one starts attracting quality talent. In the mean time, growth could reveal talent gaps. I filled up such gaps resourcefully, using individual consultants.”
  10. Let me also quote what Mr. M. V. Subbiah of Murugappa Group had to say in the Economic Times of July 07, 2012 in an article titled “Five Lessons from Family Businesses: Cultural continuity, long-term vision and a more meaningful involvement with all stakeholders set family-owned businesses apart from non-family entities”. However, please appreciate that the Murugappa Group has been heavily professionalized over a very long time, back into the 1960s atleast:
    10.1. “In a family business, culture evolves and becomes sustainable over time. It doesn’t change with the boss, as in a non-family business.”
    10.2. Long-Term Vision: “For a non-family business, quarter-on-quarter growth is so important that the obsession remains even during extreme situations such as downturns. As a result, they can’t take bold decisions that may help in the long run. A family business, on the other hand, is rarely under such compulsions. It can invest even during a downturn. After all, the capital belongs to the family. There’s merit in it because a downturn is the best time to invest in capital goods, since that’s when their prices are weak. What is needed is a bit of patience, giving time for the market to recover and the investment to bear fruit.”
    10.3. Family businesses are far more meaningfully involved with all stakeholders. The relationships forged by those running a family business with suppliers, customers and employees are family relationships, not transactional ones. It isn’t uncommon for a family to be doing business with suppliers for generations together. Trust is easily built in such relationships. The ties are so deep that a dealer in Ludhiana or Kanyakumari expects to be invited to a wedding in the business family.
    10.4. Finally, members of a business family are trained to become stewards, not charismatic leaders. This ensures continuity of culture. There can be different personalities in a family, but that can be provided for so that the business isn’t affected. This is an aspect where non-family businesses struggle.

Before we have our 4th Round of Individual Meetings, I would urge each one of you to think carefully about my own observations, and the experiences of noted Family Business Leaders, integrated in this email, and try and arrive at what you consider as the best actions/ options/ strategies for the XYZ Group of Businesses, and for the FMBs as Entrepreneurs, in moving forward…….what you finally collectively recommend will provide the direction to the Executive Board…..I reiterate that if the entrepreneurial motivation levels of the Executive Board, as individuals and as a Team, do not scale up substantially, the future structure of the XYZ Group will be radically different…..

There is now an urgent need for a critical shift in the way business is managed, as a Family Business, into the 2nd Century, if XYZ is to be remembered for the good work of its First Century……

In about a week I will call each one of you for the individual meetings as per mutually convenient dates.

Raju Swamy                                       
Founder
& Advisor to Family Business
PROMAG Consultancy Services

Apt. 206 Brigade Rathna
42 Ranga Rao Road
Shankarapuram
Bangalore – 560004 INDIA
Tel. +91-80-26676298/ Cell: 9845271498
Email:
rajupromag@hotmail.com
www.promagconsult.in
www.familybusinessadvice.wordpress.com   (Blogsite)
Strengthening Family Dynamics for Family Business Growth…….since 1985

 

Family Business – Emotional Influences and Consequences on Decision Making in Family Business – Raju Swamy – September 17, 2015

Family Business – Emotional Influences and Consequences on Decision Making in Family Business – Raju Swamy – September 17, 2015

  1. Positive Emotional behaviour and expression are present as a natural consequence of sustained growth and success in any ownership model, primarily because when success exceeds failure it is affordable, and adds to the feel-good ambience within the organization. However, a recession can change everything overnight, particularly in ‘professionally owned’ organizations.
  2. In a Family Business, particularly if facing stagnation and personal financial pressures, coupled with questions of establishing ‘ownership’ for poor business performance, emotions become strategic…the quality of emotions ranging from defensive to aggressive to blackmail…..
  3. Something that has surprised me no end is the emotional blackmail strategy used by otherwise pioneering ‘Founders’ of the Family Business when it comes to ‘letting go’, even at a fair retirement age, when the third generation is ready to come in and they see the second generation looking helpless…….seeds of conflict and break-up are many times planted by the erstwhile Founders themselves because of their own insecurities….
  4. A ‘Founder’ of a large Family Business once confessed to me that his eldest son was absolutely fit and ready to take over the Family Business except that the ‘Founder’ was scared of what he would be reduced to once he handed over Power to his son….when he would become ‘Powerless’……Strangely, in many Family Businesses even today, fear of emotional eruptions prevent discussion and formulation of a ‘Retirement Policy’…..and consequently even ‘Succession Planning’ becomes an emotional issue to be avoided to prevent unpleasantness….
  5. Nepotism in Family Business is also driven by Emotional considerations…..Merit, and consequent business growth prospects, get sacrificed.
  6. Wherever Emotions dominate ownership and management decision making, knowledge, values, logic, commonsense, professionalism, speed, business motivation, and competitiveness are sacrificed to kill growth and, instead, promote business stagnation, conflict, and instability.

Raju Swamy                                       
Founder
& Advisor to Family Business
PROMAG Consultancy Services

Apt. 206 Brigade Rathna
42 Ranga Rao Road
Shankarapuram
Bangalore – 560004 INDIA
Tel. +91-80-26676298/ Cell: 9845271498
Email:
rajupromag@hotmail.com
www.promagconsult.in
www.familybusinessadvice.wordpress.com   (Blogsite)
Strengthening Family Dynamics for Family Business Growth…….since 1985

 

Family Business – The XYZ Group: Family and Family Business Interaction Forum (Proposal)

Raju Swamy: Proposal: December 19, 2008

The XYZ Group
Family and Family Business Interaction Forum

  1. Terms of  Reference
    1. The primary objective of the Forum is to function as a medium of inter-active communication between the management of the family business and the family members as stakeholders in the business.1.2. The members of the Forum will consist of   business-active partners, ‘dormant’ partners, and their immediate adult dependent family members.
    1.3. The Forum will meet twice a year, at the beginning of the First Quarter and Third Quarter of each financial year.
    1.4. The Forum will have a Chairman for each meeting from among all categories of partners by rotation. The Chairman will be responsible for the preparatory and follow-up work and the effective functioning of the Forum from taking over at the end of a meeting to the holding of the next meeting.
    1.5. Additional meetings of the Forum can be called by the Chairman of the Forum under emergent situations only.
    1.6. The Forum is not a decision making body for the purpose of day to day management of the business.  However, views expressed at the meeting will form part of inputs for consideration as appropriate by the Family Holding Company Board which represents the interests of Family Stakeholders for the day to day management of   the Group’s business interests. The members of the Family Holding Company Board are the business-active Family Members of the Group.
    1.7. The Forum is not a legal entity but a voluntary media for dissemination of information and exchange of views for the mutual benefit of the stakeholders of the BLISS Group.
  2. Agenda for Forum Meeting:
    1. Performance and Prospects Review: The Chairman and members of the Family Holding Company Board will make a professional presentation on the state of the families’ business (The XYZ Group) in terms of individual companies and products and prospects and trends in the future. The presentation will reflect:2.1.1. Performance
    2.1.2. Commitment to the stakeholders’ interests
    2.1.3. Creating awareness of ground realities
    2.1.4. Important issues of policy having a bearing on stakeholders’ interest
    2.1.5. Business approach of being performance-oriented, merit-based, open, fair, firm, disciplined, protective, and forward looking
    2.1.6. Leadership and Team Strength
    2.2. Answers to Questions by the Family Holding Company Board to specific business-related questions raised by members of the Forum and provided to the Family Holding Company Board in advance of the meeting.
    2.3. Progress on Points of Action from the last Forum Meeting: By the Chairman of the Forum
    2.4. An Open Session to be moderated by the Chairman of the Forum
    2.5. Summing up and listing Points of Action: By the Chairman of the Forum
    2.6. Closing remarks by the Chairman of the Family Holding Company Board
  3. Code of Conduct for Forum Meetings1. The ambience and arrangements for the meeting will be such as to make the members feel comfortable, important, and free of any tensions whatsoever.
    3.2. The obvious and visible purpose of the Forum is to promote unity of purpose and mutual respect and appreciation of points of view through improved multi-level and multi-directional communication of matters of mutual interest, without impinging on the rights of members to their privacy and independence, or on their right to information as stakeholders in the business.
    3.3. Business- active partners who are members of the Family Holding Company Board cannot raise matters for discussion that are primarily within the purview of the Family Holding Company Board.
    3.4. Questions / points for discussion should not be ‘personal’ in nature.
    3.5. Emphasis in the Forum should be on updating, educating, and creating awareness in line with the changing business environment in the country, and relating it to consequential corrective action desired from within the XYZ Group and its stakeholder families, to ‘change’ and to ‘adjust to change’.
    3.6. The output of the Forum must be such as to assist the XYZ Group and its stakeholder families, through their actions, to enhance their image and reputation in public and in specific communities they serve in, as being good in business, good in service to the community, and good in their personal values, and above all, Good for the Family.

Raju Swamy                                       
Founder
& Advisor to Family Business
PROMAG Consultancy Services

Apt. 206 Brigade Rathna
42 Ranga Rao Road
Shankarapuram
Bangalore – 560004 INDIA
Tel. +91-80-26676298/ Cell: 9845271498
Email:
rajupromag@hotmail.com
www.promagconsult.in
www.familybusinessadvice.wordpress.com   (Blogsite)
Strengthening Family Dynamics for Family Business Growth…….since 1985

 

Family Business – Mails to my Clients – 13 – Family & Business Agreements/ Constitution/ Protocol: Ground Rules – November 12, 2008 – Raju Swamy

Family Business – Mails to my Clients – 13 – Family & Business Agreements/ Constitution/ Protocol: Ground Rules – November 12, 2008 – Raju Swamy

My dear friends from the XYZ Group,

The meeting of November 08, 2008 was extremely positive, and credit for this must go to the ‘Elders’ and the CXOs for breaking the ice on long pending issues, and to all of you for contributing to the harmonious  atmosphere throughout the day. We are now on the threshold of a great new beginning where you have absolutely nothing to lose, for mutual understanding mixed with professionalism can only make you winners, all the way.

I am sending this Note on Ground Rules to all of you to establish a common wave length across the board to ensure constructive implementation.

This Note is directed at understanding the interdependency of Family and Family Business while at the same time understanding the need for two autonomous Agreements/ Pacts/ MOUs to ensure mutual support to both entities for long term bonding and togetherness.

The Agreements primarily lay down basic Ground Rules and supporting policy and procedures to provide solid shape to family members’ relationships with the business and with one another as investors, owners, managers and employees. They promote sensible discussion, reduce arguments, and increase predictability.

If a Family together did not own or jointly invest in Business, it is possible that there is absolutely no necessity for even a Family Agreement as there are no underlying conflicts of interest. It is however essential for Families associated together in Business to believe in basic ground rules:

  1. The business must be acknowledged and respected as the source of the family’s financial security. Though obvious, this is very important because family members who do not work in the business, or contribute fairly to it, but share the fruits from it, may not understand the business’s importance to the family’s overall welfare.
  2. Any qualified family member may apply for a specific job in the existing business, or propose a new business. The key words here are “qualified” and “specific.” From the moment that a family startup grows enough to make employing additional family members feasible, it should be well-understood that just walking in the door and expecting a place to sit and get a check every month is not acceptable. Similarly, proposing a new business entails responsibilities and accountability on the part of the family member without which the ‘Family’ is not duty-bound to support the venture, risking the resources of the entire ‘Family’.
  3. Family members who are designated to assume professional managerial responsibilities must be pre-qualified for the position or undergo the desired professional preparation that may include managerial as well as technical training. Family members cannot assume ‘qualification and capability’ just by being members of the ‘Family’. The need for health and growth of the business must over-ride feelings of family relationships as only a successful business will contribute to the well-being of a Family and its togetherness in business. This ground rule will also apply in the case of planning family ownership continuity and succession that qualification, experience, and preparation are essential.
  4. The ‘Family Agreement’, as distinct from the ‘Family Business Agreement’ – we can modify the nomenclature if desired at the finishing stage – will primarily revolve around the funds generated from the Family Business to Families/ Family Members as investors in the Business, and how the funds will be managed through a Group Family Office and be used to provide/ enhance wealth and financial security for each of the families, in ways that can be defined specifically including covering old age, medical insurance, education, emergencies, celebrations, etc. The Family Holding Company will be the institution that will manage and fund the above on behalf of the families who will also be investors in this holding company.

With best wishes and regards,

Raju Swamy                                       
Founder
& Advisor to Family Business
PROMAG Consultancy Services

Apt. 206 Brigade Rathna
42 Ranga Rao Road
Shankarapuram
Bangalore – 560004 INDIA
Tel. +91-80-26676298/ Cell: 9845271498
Email:
rajupromag@hotmail.com
www.promagconsult.in
www.familybusinessadvice.wordpress.com   (Blogsite)
Strengthening Family Dynamics for Family Business Growth…….since 1985

 

Family Business – The reason for my Blogs on Family Business….. (Raju Swamy/ August 10, 2015)

Family Business – The reason for my Blogs on Family Business…..
(Raju Swamy – August 10, 2015)

I have been consulting to Family Owned-and-Managed Businesses for over 30 years, right from the time I started my consulting practice……started first with purely business-related strategic planning and operational management issues. However, I began to notice that almost hidden were relationship and other issues from within the Family that had a significant influence on the management and decision-making process within the Family Business itself.

The real purpose of this blog site is to reproduce selected actual mails to my clients – identity hidden, of course – that are part of the process of advising them, in a given situation. The primary target audience for these blogs includes key members/ heads of Business Families who may through these blogs recognize their own symptoms and possibly infer directions to do something preventive. However, as far as solutions go, each Family has to be treated on a 1-to-1 basis……there are no stereotypes.

For example, the blog (actual Mail) on the ‘Founder not letting go….’ is about an actual Client Family Business of mine……right now I have more than one client facing the problem of ‘Letting Go’, in different ways……

Another of my ‘Mails to a Client’ tries to explain to a Client on my consulting process that is aimed at helping the Client Family Business overcome whatever issues there are, so as to concentrate on Growth…….of the Family Business itself, and of the individuals who constitute the management of the Family Business.

To me, in my approach to resolving issues of Family Business, the focus is on Growth……Growth is the Key, Stagnation Kills…….it is mostly Stagnation that snowballs into conflict, and accumulates dirt, and leaves behind the unpleasant precipitate that could break up a Family Business, and the Family behind the Business….

I am not ‘Spiritual’ in my approach to problem solving…….it is just that I was fortunate that my primary experience of nearly 20 years in management, soon after I passed out of Business School (IIMC), with an MBA, was with an extremely progressive, professionally-managed Family-promoted Business Group…..A Leader in the Automotive Components Industry in India, and now possibly in the World. And the real bonus was that I got to work directly with the very enlightened Chairman of the Group for a number of years, across a wide spectrum of responsibilities related to the future of the Business Group, including new projects, and the development of people, and Leadership to promote Growth. I have also been a Marketing person, right from selling in a region to being a Country Head. This varied experience has been a great influence in my consulting style, based on my understanding of the Logic of Business.

Soon after, when I set up my consulting practice, it was again an enlightened and very well-exposed-to-business Partner of my very first Family Business Client who introduced me to the importance of understanding the behind-the-scene Family Relationships, Values, and Vibrations that inevitably influenced the Business Dynamics of the Family Business. Once again, this Family Business Group is today, as we speak, successfully firing on all cylinders, and continues to be India’s largest, and one of the World’s leading production and marketing houses in its industry, and also owns the No. 1 Brand in this Industry.

Getting back, therefore, to my not being ‘Spiritual’………I have been profoundly influenced by the ‘Logic of Business’ in general, and of the Family Dynamics that influence Family Business, in particular. I do believe, and I do promote, certain ‘Core Values of Family Business’…… Trust, Integrity, Ethics, Relationships, Reputation, Results, Accountability…….Now if these Values, as a whole, correspond to content of ‘Spiritual’ books and teachings, I would just claim to be blessed by coincidence……I make no effort to quote from them…….

A phenomenon I have observed: Even while it is often quoted that ’75 to 80 per cent’ of the World’s businesses are Family-owned, newspaper and magazine articles and interviews focus only on the Big Brand Family Businesses that form just a small percentage of all the Family Businesses in the World…….the reasons may be obvious from the publishers’ angle……To me, as an active stakeholder in the mission to ‘Upgrade Governance and Competitiveness’ of Family Businesses, there is more excitement in discovering the ’74 to 79 per cent’ below the tip of the iceberg…..A Family Business is definitely more interesting, from any side you look at it, than a Business of any other kind……It still continues to be more ‘Human’…..

Raju Swamy                                       
Founder
& Advisor to Family Business
PROMAG Consultancy Services

Apt. 206 Brigade Rathna
42 Ranga Rao Road
Shankarapuram
Bangalore – 560004 INDIA
Tel. +91-80-26676298/ Cell: 9845271498
Email:
rajupromag@hotmail.com
www.promagconsult.in
www.familybusinessadvice.wordpress.com   (Blogsite)
Strengthening Family Dynamics for Family Business Growth…….since 1985

Family Business – Mails to my Clients – 11 – My Advisory Road Map to a specific Family Business Client, before the actual work began……

From Raju Swamy: June 03, 2009

My Advisory Road Map to a specific Family Business Client, before the actual work began……

My dear friends from the XYZ Family,

Based on a very pleasant informal dinner meeting with all of you, I just thought I will write this note, based on a question from Xzee “We know all these things are required, but how will you implement it?”

1. Let us first look at the ‘why’:

1.1. At some point in a Family’s existence, family members begin to question themselves on whether they, as individuals and as constituent families, are meeting their goals and aspirations. Is the Family Business delivering according to expectations, helping them to fulfill personal and family desires on values, growth, wealth, and security, and therefore of peace within the Family? How will social status and financial security be ensured when active family professionals reach a stage of retirement?

1.2. In this context, it is imperative to understand that when families are together in business, business ups and downs can influence even emotional bonds of the Family, if not resolved in time. Primarily, Family Wealth grows from the Family Business. Good Business Performance is good for the Family. Bad Business Performance is bad for the Family.  Simple logic. We need Good Business Performance to support and promote Family Values, Wealth, and Well-being. It is pleasant to share profits but unpleasant to share losses, particularly where the light at the end of the tunnel depends only on hope rather than on being supported by facts and figures.

1.3. Therefore, we need to make a clear distinction between understanding within the Family and understanding within the Business Group. The Business Group fuels the well-being of the Family. Mixing Family issues with Business issues constantly over a long period creates problems at both ends as real issues never get resolved because of mutual avoidance of reality out of fear of the consequences.  Solutions must necessarily address both the well-being of constituent families and of the Family Business in terms of structure, policies, processes, and standards that will ensure Business Performance. It must be understood without ambiguity that Family Well-being is dependent on sustained success of the Family Business. A predominantly merit-based Family Business will ensure Family Well-being in the long run even during bad times. That is the strength of a Good Family Business.

1.4. In the language of Family Business Governance, is it possible for the Family Business to separate ‘Ownership’ from ‘Management’, so that the ‘Family’ maximizes the returns from the Family Business?

2. How will I approach the ‘How’? I cannot provide the entire strategy till I get to know all of you individually and as Individual Business Teams and as a Group, but broadly this will be the road map in terms of the first phase of Action Points for Implementation:

2.1. Introductory Presentation and discussion with the Family Business Group (FBG) to reach a consensus on ‘Issues to be addressed’ and ‘Goals to be achieved’, within a mutually acceptable time frame.

2.2. Identification of a Logistics Coordinator, and of a FBG Core Team, that will assist the Consultant on behalf of the Family to successfully carry through the assignment.

2.3. ‘One-on-One’ Meetings with each member of the Family Business Group to understand individual aspirations, and of personal suggestions on total improvement of the Family Business, to meet Business, Family, and Individual aspirations. The ‘One-on-One’ Meetings will on an average require a about 1.5 to 2.5 hours per meeting per person without diversions of any kind.

2.4. Individual Business Team Meetings to assess current business performance and estimating growth prospects, with SWOT Analysis, and reaching a consensus on ‘Solutions’ and Action.

2.5. A Second Family Business Group Meeting where the Consultant will make a presentation on the results of the ‘One-on-One’ and Individual Business Team Meetings, and make ‘Recommendations for Future Action’, to bring about the desired change. At this point, once the Family Business Group (FBG) agrees with the Recommendations, with or without changes, the Implementation Phase will begin.

2.6. The FBG Core Team will now be active in working with the Consultant on Implementation.

2.7. Please note that all my efforts as your Consultant/ Advisor will be to assist the Family Business Group arrive at the most productive solutions based on ideas originating from each one of its members, of each one of the Group’s businesses, and from conclusions arrived at each FBG Meeting. This is to ensure that all members of the FBG are actively involved and committed to make the desired solutions happen. During this process, beyond site visits, the Consultant (Raju Swamy) is available to all FBG Members, personally and on telephone, 24×7, to help with greater understanding of issues and processes, on clarifications required, and to listen to their views on any issue. All these will be active inputs for bringing about solutions that will finally enhance the well-being of the Family, enrich professional capabilities of members of the FBG, and of performance of the individual enterprises, and finally of the Group.

 

Raju Swamy                                       
Founder
& Advisor to Family Business
PROMAG Consultancy Services

Apt. 206 Brigade Rathna
42 Ranga Rao Road
Shankarapuram
Bangalore – 560004 INDIA
Tel. +91-80-26676298/ Cell: 9845271498
Email:
rajupromag@hotmail.com
www.promagconsult.in
www.familybusinessadvice.wordpress.com   (Blogsite)
Strengthening Family Dynamics for Family Business Growth…….since 1985