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Business Families – The New Royals of Today
Every business family has a legacy that they aspire to enrich with the contribution of every successive generation
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When trying to decode the nuances of successful business families, I have often found that the way Royal Families functioned provides a thought-provoking analogy.
While Royal families were supported by an administrative hierarchy, the responsibilities of the Royals’ position included safeguarding their subjects, taking care of the welfare of their people, training armies, ensuring justice and laying administrative processes such as tax collection etc. However, the Royal Family’s most overlooked function was arguably its most important one– that of being the Royal Family.
The Royal Family of England’s website defines the role of the monarchy as follows: “The Sovereign acts as a focus for national identity, unity and pride; gives a sense of stability and continuity; officially recognises success and excellence, and supports the ideal of voluntary service.”
As such, business families are no different from Royal Families when it comes to the role they play in the organisations that they or their families have founded. While the dynamics and mechanics may have changed over a period of time, the fundamentals interestingly remain the same. In my experience of working closely with business families, I have noticed a set of shared priorities and similarities – whether they were the Kings and Queens of Empires or the Kings and Queens of Industries. They are responsible for the vision and culture of the organisation, ensuring that talented and competent people work for the success of the organisations. That the organisations are good corporate citizens and ensure their fair contribution to the society and immediate community and indeed the exchequer!
While being a King or Queen, may sound like a dream, Royals were and the few remaining, are to this day, held to the highest standards of decorum, discipline, and propriety. From, how they behave to how they dress; they are under constant scrutiny. They are the exemplars of the cultural values that they, and their charges, hold sacred.
Business families are equally responsible for demonstrating their leadership through behaviour that inspires, assures, and drives the organization in pursuit of its vision. This behaviour is equally important for setting norms, standards and a reputation that successors feel honour-bound to continue.
Key to the effective management of the state in the past were the structures that monarchies adopted to provide governance to their people. This may have had to do with protecting their borders from invaders, and therefore, involved the placement of trusted members drawn from the family or vassals of the monarch such as Dukes, Counts, Barons etc.
Interestingly, many business families today structure their leadership roles based on the interests and skills either they possess within the family or extended families, along with how they leverage the skills of key senior professional managers to steer the organisation strategically with a long term focus.
Patrons and champions of art, culture, and literacy, Royal Families have always played a big role in upholding and promoting the arts and education.
Where once Royals would extend their patronage to the arts, theatre, literature, and education, today, industrialists are following suit.
Where once the Maharani Gayatri Devi Collegewas founded under the patronage of the royal family – Today, the Shiv Nadar School is supported by a leading corporate house and there are examples galore of such commitments by business Houses.
Another well known example is the Interglobe having supported the redevelopment of Humayun's tomb and the Mahindra Kabira festival in Varanasi. The Shri Ram Centre for Performing Arts or SRC one of Delhi's best-known theatres at Mandi House is run by the Indian National Theatre Trust established in 1958 for the promotion of Art and Culture, with people like Sheila Bharat Ram, Kamla Devi Chattopadhyay, Nandita Kriplani and Aditya Srivastava associated with it.
India Today Group hosts Delhi's largest Indian music festival Swar Utsav since 2000 to celebrate 25 Years of The India Today Group.
Any structure, royal or organizational, must account for succession to perpetuate itself.
In the medieval history of India, we find many examples of rulers having pre-ordained their successors, irrespective of seniority. This was often based on a combination of factors – rule of primogeniture, skills, character, virtue, competencies and mindset among others.
The successor would often ride with the Regent into battle and “intern” on the battlefield. It was this role of the regent that ensured the perpetuation of the legacy.
In Business families as well, a similar succession strategy is key to preserving and enhancing the value of the family business. A competent successor must be identified, chosen, and trained to take on the responsibilities of leadership. Succession is organised such that there is space to ensure the acceptability of the successor among other members of the family to avoid disputes at a later date.
While the talent pool in a royal lineage may have been restricted to relatives, business families may even look at a more expansive perspective on succession – it could be and, in some cases, has been, professional managers or an executive board that becomes an accountable successor.
There is one more important lesson to heed from Monarchies for family businesses – while monarchy as a model is on its way out, great monarchs have always been leaders that captured the hearts and minds of people. They were directed by their values that have created a lasting legacy.
Every business family has a legacy that they aspire to enrich with the contribution of every successive generation.
More than ever, in these changing times, every business family would do well to introspect and identify the values that they want to perpetuate that will also be accretive to the value of their enterprise!
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.
Pallavi Joshi Bakhru
Partner - Head of Privately Held Business & Private Client Services, Grant Thornton Bharat LLPMore From The Author >>