Family Business normally originates with a founder/(s) who remains the Head. It seems lost without their presence and finds it difficult to take direction as they are the fountain head too. Mostly once in the seat, it’s difficult to let go and move on for founders as they hold that role 24 x 7. Professionals here find it easier as they know that the time line of their role is limited- if not anything else, at least by a retirement age. Founders rarely retire by age/their own choice.

Ideally, it’s just a change of drivers in the driving seat which we all experience when tired of driving/one person wanting to take rest/when one has had drinks beyond limits etc. Immediately if you are an occupant or co-driver you will start noticing a change in the ride quality – speed, music and route changes – may seem good, better or worse. In the Covid era there are some examples wherein seniors are making huge contributions for community welfare & fighting whereas people in the driver’s seat are under pressure to cut costs, layoff people as the business needs to survive. Here a balance needs to be struck as eventually Charity begins at home…so maybe collaborating in a manner where there is balance of both.

In family business, normally a known driver takes over, whether it’s a family member or a professional. For a smooth take over and running thereafter I have some thoughts which are very relevant for family Members coming in. I recall a case wherein a cousin who was a ‘people person’, more focused on welfare and benevolence activities was taking over. He was replacing a hard nosed business & performance driven elder cousin who was also the founder – very proud of his hard work. Here are some keys for a smooth shift that makes the others comfortable and stable.

* Listen to the inputs of the old driver without biases and be objective in your decisions. The context of the past being known helps in your decision being accepted and implemented much more easily.

* Understand the influence of the old driver as he is still directly/indirectly in the driver’s seat. A backlash can easily happen with his blessings and the current driver’s image, company’s reputation & employee morale can go for a toss, which can be very difficult to recover. e.g. Workmen questioned their layoffs while in public the group was making community welfare as a priority from their CSR arms.

* Know what their ‘baby’ is- areas they are touchy about and very attached to, and handle those parts with care. Settle down first; leave that baby from any harsh treatment which you may feel is not relevant in your scheme of things. Deal with it once you have settled down. Do not target it first and become a victim of wrong perception in the eyes of existing loyalists. E.g. The founder was very particular about entry & exit time, people were not expected to leave before office hours got over but remaining for long hours was appreciated. The incoming cousin wanted to implement flexible schedules and work-life balance policies, but was warned to not make this his initial change. This was very useful & recently when Covid struck he had an opportunity to fine tune things with full support of the board & the founder.

* He soon launched a Human Centre of Excellence in which minimum cost & maximum output could be applied. His presence was felt as people started getting more flexibility & empowerment in WFH. Forced digitisation was happening & this was a good way of doing things was acceptable by old & young people. The new chairperson rolled out a series of initiatives in which flexi-working would be permitted which as per the study would result in savings and better output. Happiness & safety of people leading to Happy Customers was his trademark.

* He established better policies and processes. People were expected to have work life balance and women were better taken care of. This was a culture change seed that would keep them better off in the long run. Here he was encouraging people to not measure success on the basis of time spent in office (thereby being seen as hardworking) or loyalty (by saying ‘Yes’ to whatever the boss wanted to hear). Rather, he set benchmarks on quality and process so that the output was automatically better. MIS (Management Information Systems) made data available and increased transparency. Most decisions were taken after a healthy debate and by having data to support the facts. People felt heard and contributed in the implementation of what was decided. Professionals felt more valued and happier as there was a high degree of rationality in the whole process of work. Owners and Professionals co-existed better in this environment.

* Understand their influencers and trusted reference points. Here, the relationship is fragile so keep it going. Example - A lawyer whom they trust has much more knowledge and details already with them. He wanted to change the lawyer but did it in such a manner that the new lawyer added significant value to the new petition being filed. He was cordial and continued to seek their inputs when thrust upon by the older cousin as he would still consult his old lawyer before signing on anything. Agree to disagree amicably. This will happen when 2 people co-exist/overlap. Why wash your dirty linen in public when you can sort out issues internally!

* Find a common area wherein you need the old drivers’ help and an area where they need your help. Reverse Mentoring on both ends is a bonus. The old chairperson would never have time for larger community activities of CSR, etc. and the current incumbent had a passion for that area – he spent considerable time and effort on these activities. He was coming in the chair from a seniority perspective. Both could have simply critiqued each other, but struck a deal of sharing insights and wisdom for the overall benefit of the family. He got operational assistance in decision making whereas the other was shown a more humane lens. This becomes fun for both sides and can be a healthy give and take. A lot of other doubts and biases can be cleared here easily.

* Know that being clear and transparent is going to pay in the long run as the people reporting to you officially may also be reporting about you.

* New generations should not bite more than what they can chew, but instead slowly increase their grip. Keep the old generation engaged in some activity like social welfare etc. For them keeping out completely is difficult, yet being on the fence is better. Slowly they can find a way to reconnect with business at a social level…like this older cousin started helping retired people settle down which was a big change.

* You don’t know what you don’t know and be open to accepting that.

People in the Chair will at times be seen and perceived as unfair while on the chair, yet nobody can crib or give feedback openly. Later in their absence when some issues crop up then one needs to deal with it differently. An old set of employees who had no life beyond office and stayed late were actually ineffective and were making life difficult for the young and bright people. Time had come to show them the mirror and see them off gracefully as at that age calling then to office was risky & they were not used to WFH with zoom calls etc. He moved them into part time advisory roles and used their wisdom on operating issues … this was a clear message that he was a fair person who cared for people. In the end what matters is not what you hear but when people feel heard & listened to.

Author Naveen Khajanchi is an alumnus of INSEAD. He is CEO of NKH Foundation P ltd which is into Leadership Search, Executive Coaching & Training for leaders of large Corporates.

Twitter: @naveenkhajanchiwww.naveenkhajanchi.com

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