Dr. Vivek Mendonsa highlights the importance of having a family business consultant and the value that they bring to the table
Family business consultants do, in my opinion, add tremendous value. More than 80% of businesses in India are
owned and controlled by families, and are the greatest contributors to our GDP.
However, we need to take care of one important aspect. The Letter ‘I’ is the most creative and biggest destroyer of
a family business, as I will demonstrate with a simple arrangement of letters.
Running your family business successfully – is everyone’s ‘motto.’
But when the letter ‘I’ comes into force, ruining your family business becomes an option.
I = ego, I am the great doer and contributor, it should be my way, nothing runs if ‘I’ am not there.
Now let’s see what are the benefits if we succeed in eliminating this negative ‘I’.
A family business is a unique combination of the entrepreneurial and the spiritual. Entrepreneurial – obviously, and there’s no need to elaborate on that. But why spiritual? This is my unique understanding of it. In an age where many people, for many reasons, valid and otherwise, are changing jobs every two years on an average, the continuity
with the past and the extension into the future that a well-established family business provides, gives us a glimpse into so many excellent facets of life – loyalty, commitment, distilled wisdom of the ages, and many more.
All these elements need to be preserved and encouraged in today’s world, where we are witnessing less and less of them. For the simple reason that these are fundamental attributes – attributes which do not just focus a business on the short-term, but position it to become a Tata, a Birla, a Mahindra, and so on.
Businesses with a legacy, businesses in touch with the past, businesses reaching out to the future, connecting the three periods that are known to man. Is this not the essence of spirituality?
Now, having established the importance of a family business, let us see what kind of assistance, they would need, to excel and move forward in a structured manner.
Family businesses usually have at least three generations involved in their leadership and management at any point of time.
All three generations have valuable things to contribute. The grandfather (if we can put it that way) gets along the knowledge of the roots and the culture and the philosophy of the founding days of the business. It is rightly said that without knowledge of the past, venturing into the future may be a bit muddled.
Then comes the next generation – let us call it the father. This is the generation, which is most likely currently in charge of the day-to-day decision making aspects of the business. The father is a bridge between the grandfather and the grandson.
Then we have the third generation, which we may call the grandson. Fast and furious, determined and enthusiastic, full of ideas and waiting to implement them along with having total faith in the power of technology.
All three generations – grandfather, father and grandson – come with their own strengths, and with their own shortcomings.
This is where the family business consultant steps in. He or she should ideally be a professional with a chartered accountancy, a law or an MBA degree, or a combination of these. Preferably, he or she having run a business (successfully or not so successfully); for a period of at least ten years. Other qualities that are equally important is to be a good listener; unbiased in views; is willing to listen to all sides; cool-headed; not playing one family member against the other, but carrying all forward together; a person who can keep confidences and is reasonably well connected; having the ability to lead the discussion and prepare a practical business plan with at least a few alternatives.
How often should you meet with your family business consultant? At least twice a month, for at least 1.5 hours each. Meetings can ideally be with all generations of family members present together.
A white board or sheaves of paper, a calculator, plenty of pens, pencils are necessary to chalk out ideas and alternatives. There may be breakout sessions, where a few members are requested to leave the room and one-on one discussions are held. The consultant should ensure that no one takes offence to this.
‘Meeting Before the Meeting’: Always prep up the family business consultant days before or hours before a scheduled meeting; the agenda points must be deep rooted. Hindrances or irritants must be brought to the surface so fair and frank discussions can be held.
Where to meet?: This is most crucial. If you are meeting in your office conference room, no other calls must be put through; no other papers must be brought in for signatures. If you are meeting at home in your living room, see that the high tea and snacks don’t become the points of the agenda. Focus on the business agenda. End the meeting with a quick practical summary of the task on hand.
The fees that need to be paid to these consultants can vary from a few thousand rupees per actual hour, and a six months retainer package can always be worked out. Finally, if the business does well, it is the family which does well. Hence taking support from external consultants, provided they have been selected with care and add value, is always helpful.
The author is Director, Marketing of Lawrence and Mayo, a family owned business. He is a passionate entrepreneurial enthusiast and mentors various early stage businesses and mature family businesses. Email: vivekm@lawrenceandmayo.co.in
