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Mentoring the Next Gen of India Inc.

Mita Dixit

Author: Mita Dixit

Date: Tue, 2017-05-30 09:25

Sunil Kulkarni was in a pensive mood. In the last six months, the situation was improving and he was experiencing a positive change. He reflected on recent events. His son and executive team members were now communicating more constructively during management meetings. He, himself was less anxious. 

Sunil was the founder of a mid-sized company manufacturing auto parts. His son had joined him three years ago. For the last two years the business was stagnant and he was facing crucial challenges of how to improve business performance and how to groom his son for the leadership position.     

Six months ago, Sunil invited a family business advisor-mentor to help him and his business to untangle the knots of confusion, conflict, and develop a long-term roadmap. Involvement of the mentor was effective. He and his son had started interacting meaningfully and the executive team was charged up.  

A large number of family-owned-and-managed businesses in India are going through a phase of transition just like Sunil. The next generation is taking over the reins of the business, business complexities are increasing, and successors though well educated, lack experience to lead the business. In such situations, prudent family owners realise the need for a hand-holder, a mentor who would understand the family dynamics as well as business scenario, who would coach younger generation to be future ready, and strengthen the communication bridge among family members and executive teams.

Why mentoring?

The next-gen successors in family businesses in India usually occupy important positions because of being the owner’s son or daughter. Such an entitlement may not earn respect from employees. However, if the successors are qualified, trained and possess competencies to lead, they not only earn respect from the employees but also make a mark in their industries as leaders. Here is where the mentors are needed. Mentors play roles of a doctor, a fitness-expert, and a friend-philosopher-guide for the family in business.   

Up until now, external parties such as the family’s chartered accountants and lawyers have been seen as trusted business advisors. However as the family business scenario in India is getting more professionalised, the importance of a specialised family business advisor is being recognised and sought.


What does a mentor do?

One of the most important functions that a mentor serves is to encourage and help communication between different generations of family members. A mentor provides attitudinal and behavioral counselling to family members and helps develop skills that are helpful in the long run. A mentor brings clarity of purpose, creates a family governance mechanism for transparency, and helps breaking down mental barriers that may be restricting the family’s harmony and business growth.

Why are mentors important?

Mentors come on a neutral platform and provide an outsider's perspective for the business. As business owners are generally busy micro managing their businesses, they may have blind spots not easy to recognise. Family business advisors/mentors bring in a fresh perspective and objectivity to the issues in question. Since mentors are themselves professionals with domain specialisations and consulting/coaching experience, they also bring in cross pollination of ideas that will help develop out-of-box solutions for any disputes.

Mentors are particularly important in succession planning and preparing the next generation for leadership of their family businesses by giving them a comprehensive approach to running the business and to meet the future challenges they would face as business owners.

The trend

Mentoring and coaching family business owners is an emerging trend in India. Large business families like Future group, Adani group, Videocon, VIP industries have groomed and trained their younger generation through family business advisors. Renowned management institutes like SPJIMR offer programmes for family business owners to develop their management and leadership skills and also have expert faculty as family business advisors and mentors.

By 2020, almost 37% of Indian family businesses would go through a generational change in leadership. For business owners aspiring to move to the next orbit of growth, planning and preparing the next-gen will be crucial and mentoring will be the need of the hour.

 

Originally published in: Maharashtra Chamber Patrika (March 2017 Vol. XXXXVII No. 12)

 

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This blog has taught me something new which is being faced by family run business. As it’s truly observed, new generation in India is coming in business with faster pace. Since many years family lawyer and chartered accountant is perceived as trusted adviser by businessman. Now with young generation coming in and advisers remain same is creating a conflict. There is need of neutral, unbiased and professional mentor. When young generation which is tech savvy, more professionally learned is taking over a business, there is creation of some ripples. Some companies can manage these ripples but majority of them could not. If young owner gives orders to workers who are two times older than his age then there is some discomfort comes in staff. Swagger of this young generation is somewhat not gelling with old business environment. Young owner is in hurry to implement his ideas. He somewhat ignores advises by old horses. Main job of mentor comes here as connector between two generations. Young owner lacks experience & patience whereas old boss lacks new ideas. Young owner may start to feel overshadowed and frustrated when total power transition is not happening. If this transition is not smoother, it’s likely to disrupt family relationship or business or sometimes both. In family business it’s not just business but their relatives, outsiders are also involved. Each of them has their own pressures & interests on business. Mentor has to connect all these parts together & tighter so that transition is smoother. Mentor has to play multiple roles. He has to be mediator to avoid confrontations. He has to use his skills to bring constructive dialog in business. He has to develop proper succession planning. He has to give his opinion on issues with objectivity. It’s right for business to engage mentors in early time itself. Now many companies have professional mentors which have fresh perspectives and skills on such issues. As author rightly identified, trends of having this mentor in company is likely to increase.

Grooming a successor is definitely one of the biggest challenges in a Family Owned Business. The generation gap has bought about difference of opinions regarding beliefs & values. The same can primarily be attributed to globalization and rapid growth in the recent times. Globalization has infused new perspectives in the minds of Gen-Y. Though the younger generation may bring about vast improvement in the way their family owned business functions, the earlier generations have apprehensions about the style and attitude of the younger generation. The older generations still hang on to age old practices and rarely look to upgrade their facilities despite fierce competition from the outside world. They do not realize that change is the only constant. Also, People resist Change and that is one of the major reasons why employees do not respect the new generation successor. There have hardly been a handful of cases when the successor has earned respect from the employees in Family owned businesses. Mentoring not only helps in smooth transition of the Top Management, but also helps in bringing a new perspective to the business which is the need of the hour. Mentoring also helps in giving the new successor an insight about the business, the work style employed, the expectations from the executive team, the employees and also in giving an outsiders perspective for the business. Mentoring also helps in fostering communication between different generations of the family. It also helps in building confidence in the younger generation in their transformation to a Leader. Mentoring is widely being adopted in MNC’s & Large Industries as well. Mid Managers are given an additional role of being a mentor for a fresher in order to make them feel comfortable and to groom them to become a future manager. Studies revealed that corporate mentoring programs have increased employee retention and engagement. Mentoring has indeed been an effective way in improving the way businesses run and is no exception in case of Family owned businesses as well. With around 37% of the family businesses expected to go through a generational change in leadership by 2020, it is time for the businesses to look for the right mentors to make the future generation business ready.

In Indian context we have many family owned business for which owner expects next generation to help them running business and take over the business in long run. For that they ensures that the next generation is undertaking educational degree like MBA or developing right skillsets which can help running their family business. However most of the times it happens that the business dynamics and demands are altogether different business complexity are increasing which successor although well-educated may not tackle due to lack of experience. At the same time the owners might be running business in their conventional ways which as seen in above example could see conventional approach which may not give different insights or diverse prospects to challenge status quo to take it to different level. Moreover, the owners may not also see the loopholes which can continue with new generation since they will look into problems from owners prospective which may miss new dimensions looking at the problem. Some time, it might happen that owner with very good business insight and leadership qualities but may not give full time attention to mentor and groom their son or Daughter because of business commitments and priorities. Next generation Successor joins the business at some key position directly and may not earn respect from employee which could be because of lack of business exposure or required skillsets for that position. This doesn’t mean that he or she is not fit for that position but just matter of time to understand business insight in that role. Mentor being an industry expert can play a key role here guiding them on various situations and asking them to look at business with diverse prospects. Mentor can bridge communication gap between generations, braking down mental barriers helping business to grow to next level. He can also identify blind spots and being not emotionally attached to business can think of broader aspects while tackling problems. Business family are going beyond CA’s and Lawyers to seek opinions because of global competitiveness and making them-self competent enough. Kishor Biyani who owns and lead 14,000 crore Future group often seeks advices from mentors. When his two daughters joined business he reached out to Ireena Vittal for strategy consultation and also have “Ram Charan” as mentor coach for both daughter.

Mentoring the current generation with an access to world wide resources has become a challenge not only for the family business owners as well as the mentors themselves.The challenge today is not more about directing the newer generation, its more about accepting the thought process/ way of business for the parents /owners of family business which might be contradictory with self belief /discussions based on old age philosophies/ rules/ tradition as against the newer generation which could be right or wrong being subjective and objective time to time. The same discussions though when done with a mentor from non family business with consulting/coaching expertise as mentioned in the blog it does make a difference how the mentee is able to understand and rationalize his/her thinking and respond differently as when same done by the owners who are mostly relatives or parents. So the focus emphasizing on changing trends of family business management because of newer challenges in business, newer laws and the new work ethic and culture, along with corporate companies with bigger and deep pocket entering almost every space of business, keeping up with the ethical, practical and rational approach for the betterment of the family company remains the first sole objective without compromising on few laid downs traditions in business, which can be achieved by having a mentor who can help the new generation get a wider perspective, be rational , gain a more worldly experience first hand as well as get the trainee practical in thinking process .

This blog describes the new change in family oriented business. To bridge the generation gap between the oldies and new generation in a family is very important. Bringing change in the conventional methods is very important to sustain the business and survive through the cut throat competition. Hiring consultants who act as a mentor for small sized or medium sized business help bring fresh perspective, new ideas and thus help them grow. Finding mentor within known circle has been from a long time. But even they come with biases. With new technology, new way of working customer expectations has also changed. To meet such demanding customers, it’s very important to have a mentor from similar industry with diversified knowledge. He will work without any mental barriers. Mentors not only drive positivity in the company, they also groom the successor. Accepting external views by old generation creates conflict. But key to success lies in change. People don’t give much respect to children of business families since they don’t struggle to start up a new business. Their main struggle lies in earning confidence, showing leadership qualities and taking the business to a new level by innovation. To do such things, first thing is gain knowledge of the existing environment. Mentor helps them to grow as a successful leader.

Author has given us good insights about how the role of mentor is extremely important especially in the family own organizations. Many of current generation leaders may be well equipped with the modern technological and management skills but they may not necessarily possess the great business acumen to succeed in the long run, this acumen comes with the experience and therefore it is very important to have mentors who have been gone through a similar process or have good business experience. Mentoring is an end-to-end involvement that is focused on the world view transformation of the individual and his or her consciousness. A great mentor is often what separates success from failure by providing valuable inputs. Mentoring also helps in identification and grooming of successor, helps executive coaching especially business leaders in new role and it also helps in bringing a new idea’s, perspective, outsiders view to the business.

The blog given on Family business and generation gap between owners is real picture we observed in many cases surrounding. We in corporate world everybody wants Mentor to guide and coach. I was not thought before this reading that such Mentoring is really necessary in family business. It is practice in India that new generation automatically started to learn business they have. But as due to generation gap there are huge conflict, no respect of new owner in old employees. Mentor is good tool to resolve conflict and motivating all employees and accepting the new leader. Mentor is outside person and always think from different prospective. As he is expert in core business and having good experience of coaching and consulting, he can give outbox idea and solutions. Mentor can play a good role of friend between different generations of family members. Mentor can play a role of Ice breaker and will help to break mental barriers which are restricting family harmony and business growth. Mentor brings transparency and healthy communication between families which will help to build trust in each other. Mentor are really important to develop leadership qualities in new generation businessman. It also helps for succession planning in family members to meet future challenges in their business. As you rightly mentioned that in 2020 there will be 37% of Indian family will have generation change in leadership, mentoring is crucial requirement and need of hour. The institute like SPJIMR is doing proactive steps of developing mentor which will be need of our country now. In our company also we are recommending new potential leader to get good mentor who will help him for guiding and coaching throughout his career. The results shown through performance drastically distinguish between those have mentor and those don’t have mentor. Even though our company are doing CSR by giving scholarship to students who are economically low family, we are providing mentor for each students. Mentor are guiding students throughout his studies and till he got job or business.

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