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Induction of next generation in family business


Growth and Perpetuation of family business depends on successful transition of the business to the next generation. Unsuccessful transitions often lead to the failure of both the business and the family. This article intends to focus on one of the reasons for this failure which is the inability of family businesses to induct the next generation in the business or because of the errors made in this process.


Family Businesses Owners want their children to join the family business and usually do not even discover whether they are interested in joining the family business or not. Also, even if they are willing, their readiness to put in the effort and time to learn how to manage and lead the business is not checked. Unwilling or underperforming youngsters do not lead the business well and it impacts the business growth. Ashish Bharat Ram, Managing Director, SRF rightly said- “If a family member doesn’t have the passion or doesn’t want to take on the responsibilities to run the day to day business, he or she should ensure that they assume the role of a responsible family owner and should not interfere in business management.”


Challenges

In many cases, when the next generation member joins the business, family business leaders don’t know how they should start. The next generation members just start going to the office with the family members and are told to find work initially to engage them. This creates ambiguity and delays the process of them learning actual work and the requisite leadership, managerial and personal skills. Also, they are often seen as owners since the first day. This at times puts a lot of pressure on them that they need to start leading the business as soon as possible.


One common fear among business owners of all sizes and industries is that their children will grow up to be entitled. Entitlement doesn’t come just by virtue of being born in a wealthy family. Well-meaning parents of business families without realising, provide misguided protection to their children which leads to them feeling entitled.


Read more at: https://economictimes.indiatimes.com/news/company/corporate-trends/induction-of-next-generation-in-family-business/articleshow/92308510.cms

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