New Manager

How to integrate young managers into family businesses

Ajit Patil | Updated on January 24, 2018

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Given our management curriculum’s focus on Western business processes and practices, managers need to be groomed to work with family-managed firms

Family-managed businesses have their own culture. Young managers get a cultural shock when they join these organisations. Most of them have a tough time absorbing and adjusting to this culture. We teach our professionals how to work for multinationals but give them no clue on how to work for Indian family-managed businesses.

As a young engineer-MBA, I had an opportunity in my corporate career to work for family- managed industrial groups.

Working in the Indian and overseas markets with these industrialists I got insights into their personal value systems, thoughts and decision-making processes.

What do they value?

Integrity: There is emphasis on personal values. The way you think, the way you were brought up. Parenting, your neighbourhood and your close circle is important for them. During the interview, you can expect lot of questions to test your value system. Very personal questions will be asked and a background check will be conducted by calling references.

Loyalty: Length of service is important. They do not prefer rolling stones. At times inefficiencies are traded-off for strong integrity and loyalty.

Discipline: ‘Performance can’t be the excuse for the discipline’ is the strong view in such companies. Sometimes, discipline becomes an obsession and youngsters feel suffocated.

Initiative: Initiative is rewarded. However, overdoing it can at times raise suspicion.

Hard work: Smart work is considered as a default. Working harder is more important.

But, the flip and positive side to this close scrutiny is that young managers are groomed as entrepreneurs than as functional experts. Secondly, in such a set-up, there is no hire and fire policy; business risks are hardly personalised and in case of some decisions going wrong, there is a tendency to blame the environmental factors and not the individuals. Job security is even better at the senior level.

Thirdly, personal and family problems are considered compassionately. Seniors take responsibility to groom the subordinates and the belief is ‘HR is everybody’s job and too important to be restricted to the HR department only.’ Due to the exposure, and the consultative and holistic approach to decision-making, learning is better.

But many times, the growth of salary is slower than the growth of individuals hence employees hop after gaining the skills. Such companies become a B-school of sorts for multinationals.

Also, in family businesses, one learns to take calculated risks. They provide one with better individualistic risk management capabilities, whereas multinationals believe in setting up processes to take care of the risk.

But, what young professionals don’t like about family-managed businesses are their conservative approach, partial delegation, the daily monitoring by the family and the informal setup that the boss maintains to glean information on the work in progress. It isn’t always a one-way street.

Family-managed businesses also have reservations about young professionals.

Young professionals, they say, are too fast and tend to skip some steps in decision-making.

They tend to ignore less educated but experienced employees and jump to conclusions.

Apart from the lack of a long-term commitment, they do not understand the situations specific to the organisations and want to implement systems which may not be applicable in the present culture. There is also a general lack of ability to take all the employees along.

The main reason behind the reluctance of young managers to join family-managed businesses could be a fear of the unknown. I, therefore, feel that we should encourage graduates and post graduate students to intern with such businesses.

Let them get a fair idea on what to expect. Our present management and commerce curriculum focuses heavily on Western management culture, business processes and practices.

In our national interest it is important that young professionals and family businesses learn how to work with each other.

The writer is with ICFAI Business School (IBS), Mumbai

Published on February 03, 2015

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