Being born into any family, whether business or non-business one, is purely by accident. None of us has a choice in it. We cannot choose where we are born but we can always choose what path we take in our life.
Here are few lessons for those born into a business family from Mr T Sudhakar Pai, a generational family businessman of Pais of Manipal and Chairman & Managing Director at Kurl-on Enterprise Ltd.
Lesson 01: Freedom of Choice
Previous generations should let next generations figure out & manage things by themselves. With guidance being the key, elders should let young guns choose the role and capacity at which they want to contribute to the family business.
Lesson 02: United the Business Stands
Most of the businesses do not survive after the third or fourth generation due to splits arising from lack of vision, cohesion & poor decisions. Families should always find ways to keep the family business intact. Remember, the true strength of your five fingers can only be realised when they come together.
Lesson 03: The Commonsense Mathematics of Family Business
The commonsense mathematics in a family business is about how 1 & 1 can be 1, 2, 0 or even 11 as well, depending upon where they stand. If 1 and 1 stands alone, their individual value will remain 1. If 1 is in the difference to 1 the outcome will be 0. If 1 is added to 1, the value will be 2. But, if 1 stands next to 1, the value becomes 11. Always find a way to make 1 and 1 equal to 11. That is the value family businesses should strive for.
Lesson 04: Know the Need, Avoid the Greed
While drawing wealth from the family business, one should understand the difference between need & greed. If your needs are met, you shouldn’t become greedy. Generational family businesses vanish when even one member of the family becomes greedy.
Lesson 05: Professional Management VS Family Management
Whether professional or family, it all comes down to right management and wrong management. At times, even a family member can be the wrong manager for a family business and a professional manager can run a family business very well. The family should know how to observe and make timely decisions for the best interest of the business.
Lesson 06: Profitability & Governance – the boundary
Discipline & more importantly, self-discipline is the key to better governance in business. Families should realise the core strength of the business and make competence the main differentiator for people in important roles. To manage a family business, one should be a communist at the family level and a capitalist at the office level, keeping socialism out of the jurisdiction.
Mr. T Sudhakar Pai is Chairman & M.D. of Kurl-on Enterprise Ltd. He belongs to the third generation of Pais of Manipal, reputedly known as “Visionary Bankers” and founders of the Syndicate Bank. The family also promoted several Public Limited Companies, such as Maha Rashtra Apex Corporation Ltd., ICDS Ltd., Manipal Finance Corporation Ltd., Kurl-on Ltd. to name a few, earning a place for the “Manipal Group” on the business map of South India.
The article summarises his interactive session “Leadership Talk” organised by Thomas Schmidheiny Centre for Family Enterprise at ISB.
-Author: Paritosh Garlyal, Consultant, AFA