Family Business – From Mails to my Clients – 1: To a Founder who doesn’t want to ‘Let Go’…..

RS/Analysis-3/June 08, 2015 (2 Pages) My Analysis of the Management Style of a Family Business: XYZ Group: My conclusions from our Meetings:

  1. My last 2 Reports have comprehensively provided a direction towards saving/ helping the XYZ Group get out of the current mess and move forward. Unfortunately, my observations and recommendations have not been taken seriously.
  2. The Group Chairman has always maintained that he has done his best for ‘everyone’ but yet nobody is happy. In our very first meeting there was 100% agreement from everyone present that they were not satisfied or happy.
  3. All the subsequent meetings have not changed the above situation: Nobody is happy.
  4. I have given much thought to this issue, and I have noted that none of the Family Members in Business really care for Growth, Diversification, Results, Modernization, Management Upgrading, etc.
  5. The main focus and interest of all FMBs – Family members in Business – is on extracting more money and property and anything related to these, from the Group Chairman.
  6. The Chairman, in turn, has total control on the above, and he is aware that his continued value to the other Group Members, and power over them, can be sustained indefinitely only so long as he fully controls Group/ Family Accounting, Money, and Property.
  7. It is also true that FMBs are grateful to the Group Chairman for having initiated them into business and wealth through his pioneering efforts over the last maybe 40 years……
  8. Unfortunately, the Group Chairman has not realized that all the FMBs and their families are now bothered only about the future, and therefore on what he can do for them in the future……the gratefulness for the ‘Past’ has now dissipated and is no longer a matter of importance.
  9. Obviously, what the Group Chairman could accomplish in his younger days are totally different from what he can replicate now as a much older person with energy limitations. He has therefore set up a ‘system’ of his own which is possibly based on disbursing ‘favours’ and controlling all monetary resources and decisions on their use.
  10. As of today, more than half of the able-bodied men in the Group do not have enough work, or have no real work at all……but all of them are paid salaries and enjoy perks like housing and cars, etc. The Group has not grown enough to provide them hard-working opportunities to justify their earnings, and at the same time, they have not had the guts to exit and become independently successful. The irony is that even such people are unhappy!
  11. The very few people who have an opportunity have made themselves indispensible, but are unhappy because they just cannot get away to do what they want……all resources are controlled by the Group Chairman.
  12. The Group Chairman, in such a situation, sees himself as secure and, other than superficial desire to do something to make people happy, he is really not doing anything in particular. He is happy…..
  13. What the Group Chairman does not see, or appreciate, is the fact that he has carefully nurtured a family business culture which will most definitely fall apart once his influence is over, in terms of his control on resources.
  14. The whole structure of the Family Business is extremely weak both in terms of Group Management Structure and Control, and in terms of total absence of Values that keep the Families together in a Family Business.
  15.  And every meeting makes it obvious that nobody really cares for long-term well-being of the Business or of the Group……….there is utter selfishness on all sides, total absence of trust, and absolutely no ‘Loyalty’ to any entity that can hold the families together.
  16. On the whole, as of now, the situation is a hopeless one…….unless, of course, the Group Chairman realizes immediately that emotional outbursts and ‘emotional blackmail’ and monopolizing  power over resources, and without transparent accounting, and doling out favours, only builds superficial loyalty and promotes loss of integrity and trust within the Family Business, and within the Families.
  17. There is hope, if the Group Chairman wakes up before it is too late……Once he understands his legitimate duties to the Family Business (and consequently to Families), he can demand the same from the others…….Mr. Group Chairman, Sir, there is still time for you to become a Great Leader……and there is urgent need for a Great Leader to save the XYZ 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

 

Family Business, Family Business Board, Family Business Governance, Family Business Management, Family Business Strategy

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