A typical question to me from members of Family Businesses has often been:
“We know all these things are required, but how will you help us 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 about 2.5 to 3 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.
3. 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.
4. During this process, 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.