What Indian Family Businesses Can Teach Musk
The majority of Indian businesses are either family-run or promoter-led. The Indian family business concept can be traced back many centuries. India has a lot of learnings to share from its family-led businesses. They have seen much volatility, wars and invasions, strifes and strikes, and yet gone ahead to scale the markets. Indian family business leadership has many a transformation-lesson for leaders like Elon Musk.
The Indian family businesses, in general, have a strong culture that binds the teams and the organisation, including the external stakeholders who work with them. Most of these cultural and behavioural traits have been led by the founders and subsequent generations have then built on that base. These traits create a sense of purpose and bring the teams together, notwithstanding the quirks and idiosyncrasies that many of these individual founders may have or had. Many of these businesses have been professionalising their entities by bringing in external leaders, and yet have managed to maintain their ethos and cultural moorings. They have also been able to integrate external professionals into their organisational fold.
However, a strong organisational culture can also be a hindrance to change in management. In an ever-changing business environment, where digital transformation and business model disruptions are a must, the family businesses have to introspect on the changing purpose-culture-change-customer matrices. They have to organise the necessary change management initiatives to be relevant in the markets and to the customers they (aim to) serve.
Tall ambitions need people & performance
Many successful family business founders and their successors within the family have had lofty goals and audacious business objectives. They have never shied away from challenges. In their journey, they have had to constantly concept sell to their stakeholders to buy into their vision. This is also followed up with sweating up the details, as well as a constant eye on execution of those plans.
They have to deal with multiple stakeholders – governments, policy makers, regulators, market influencers, analysts, bankers, vendors, employees, and more. Their actions are constantly watched by these stakeholders, and opinions formed.
In short, the learning is that “Take people along”. Without people, plans can’t become real. Hence treat people as a scarce and valuable resource.
Taking people along
Any culture transformation takes time, and would need hand holding people within the organisation, to start off with. These would need patience and hand-holding at times.
Values are the glue that bind employees with the organisation. It is simply the way business has to be done. People observe more about these values by the way leaders in the organisation behave, rather than just those fancy HR manuals and posters.
In any journey, promoters invest in people. They constantly communicate (or at times even sermonise). They work along with them in getting their projects going. They also set standards for what’s expected from their employees.
Building trust
Trust has to be earned with consistency of values-based behaviour, and is a two-way street. One simply cannot demand trust and respect as a hierarchial-right in the organisation.
Promoters do build a core team in each of their enterprises. They have to be open with them about their plans and what’s expected of them.
Family-like
Most family business owners have the ability to treat employees well and make them feel like family, but without the perks of the surname. In today’s times, it can be with ESOP, and other incentives to share the risk and rewards of the business growth.
Taking staff into confidence is a way to build their motivation. Trusting them with decisions and allowing them to err as well is critical.
While being ruthless and firm in decisions, family business founders also take care of the well-being of their employees and families. This extends to vendors, associates, partners too. Family business founders can be micro managers, and yet allow their staff to run ahead with project execution.
*Delegation matrix with authority and roles
While an empowering organisational culture surely does drive employees and makes them loyal, companies with greater influence of promoters have faster decision-making. This can be greatly motivating for the staff.
Such promoter-led organisations are driven by the aspirations of the promoters for a quantum leap in growth of business, through basic values of mutual trust, cost consciousness, profitable growth.
External validation
Many seem to think that the family owned businesses are reclusive and secretive. It is not so. Most of the successful family businesses have an unique ability to bring in external advisory help when needed, and to blend it with their organisational knowledge. These families are aware of the need to bring in external perspectives, as well as the critique for their current business functioning. This allows them an external validation, as well as the ability to make any changes to their plans or style of functioning.
Embracing change
Family businesses that keep saying, “this is how we always do things and will continue” simply vanish in the face of competition. While your business might have made it to the next generation, can it survive in this generation and aim to move to the next one? Is your organisation relevant to your market? Can you differentiate your brands from the rest of pack?
Change is inevitable and must be embraced by any business that wants to succeed. Smart enterprises have always ensured that all of their stakeholders are on board with the need to evolve, and to constantly change.
Dr. Srinath Sridharan - Author (Time for Bharat) & Corporate Advisor
