Family Business Creating Legacy
Family business is considered a growth engine of the global economy. It is the most common and oldest form of business, difficult to manage for generations. The reason can be as families go beyond generations and grow in number, complexity increasing, a key challenge for a family business is to parallel plan for sustainable business and harmony in family relationships. Effective family and business governance empowers a family to manage happiness concerning business prosperity. It sets out collaborative decisions, a common vision based on the purpose and value of the founder family, and defined roles and responsibilities of family members. Creating bridges between generations through proper communication, developing systems, policies, and processes for business operations and management structures creates a positive family and business environment.
Across generations, family members need to maintain an entrepreneurial mindset, constantly looking at evolving opportunities and maximizing returns on existing capabilities and business, along with developing new capabilities and opportunities for expanding the business, which will create a legacy for each generation. Such practices will create business relevance. Family business and legacy go hand in hand, and they wish to connect and contribute to sustaining their legacy across the generations. The best way is to share and maintain what we value, such as family traditions, values, and beliefs, and respecting personal sacrifice and histories. Legacy is a vital part of heritage that needs to be nurtured, protected, and grown by the family in business. The family is responsible for passing it on to the next generation to take it forward. Legacy is not about looking back but looking forward at what is valued from both a business and family point of view and what motivates families to continue to build on that value and purpose for generations. Business processes, policies, and structures may change over generations, but principles, purpose, and values remain constant. Family's beliefs, behavior, and business must go in line and be reflected in individual's behavior and recognized by the market for sustainable business. Family firms build trust with stakeholders through their values and lives, make them successful, and hope that the next generation will do the same.
Legacy is an obligation that each generation must preserve and protect to disseminate the purpose and values of the family and business. It is a responsibility to be a steward, not behaving like an owner. Heritage makes the owner more responsible towards their minority stakeholders. It can be built on personal sacrifice, hard-work, and swat over generations. Next-Gen finds their role model from their family history, creates connections across generations, strengthens bonding through effective communication, lets go of past mistakes, and finds a new way to take the family and business to the next level. Heritage helps create a family as a glue for the business and develop a common vision for growth.
Heritage is the lighthouse for the Now and Next-Gen to run the business. Research suggests that the young generation respects family values and heritage as a source of inspiration. The generational value that family has created over generations is reflected in the market as reputation and lived by the family members. It is considered as the best gift to the Next-Gen and not a burden.
Indian family businesses are generations old. They're rooted in tradition, and their success lies in their ability to adapt. While they modernize, businesses always maintain their roots. Their core values, principles, and traditions provide a unique identity that differentiates them from their contemporaries. Along with many other groups in India, Murugappa is one of the most trusted family businesses known for its heritage.
Murugappa group's legacy dates back to 1900. The group is a diversified conglomerate run by the fourth and fifth generations and is known for its governance that takes care of family and business. It is known for managing family culture, tradition, values, and heritage. MV Subbiah, the third-generation leader, believes that the family who stick together does business together. MV Arunachalam believes that personal interest is not important for managing the togetherness of family and business. The leader goes the extra mile for family unity and creates bridges between generations. A. Vellayan believes they work on the concept of trusteeship who work for the business and family interest.
For all tradition-driven tactics, the Murugappa family created a system for grooming the Next-Gen under Non-Family professionals. That helps Next-Gen to understand separating their personal relations from business relations. The heritage of the Murugappa Group is built on a set of enduring values and beliefs called the 'Five Lights' – a guide to everyday excellence. It clearly defines a way of life and is demonstrated by these strong values: Integrity, Passion, Quality, Respect, and Responsibility.
For a sustainable family business, a family must create a structure to pass on value, vision, and entrepreneurship to the next generation, along with good governance and parallel planning for family and business. The focus areas are succession planning, leadership, ownership, legacy, and family wealth for sustainable business.
Hitesh Shukla, Professor, Saurashtra University, Rajkot
