Set out a routemap for your company's future
The elections are done. And the stats are interesting. 30% of our MPs are dynasts. 43% have criminal records. And 80% are crorepatis of which a majority are worth Rs 20 crore
10 Jun 2019 | By Noel D'Cunha & Rushikesh Aravkar
These stats provide a good insight if these 543 MPs will work for We The People. Also, they suggest, be it, politics, Bollywood or business, the family rules. The issue is all the more pertinent in the case of the Indian print industry since most businesses are family-owned.
The line of succession follows from father to son. Solid logic says: when a son inherits his father’s business, it’s understood that both the legacy of the company and the wealth are in safe hands.
However, things are not simple. What’s happens when the company owner has more than one children? Or no children? And what happens when the children are not keen to join the business.
Very few firms are showing any interest in going public. This is a trend in abroad as well. However, we have observed that in Europe, the line of succession doesn’t usually entail the next generation taking over the business. Instead, most family-owned businesses hire outside professionals to run the company. In such cases, the owner and his successor remain the figurehead, but the business is handled by a professional. Be it: a CEO or a CFO.
In India, this trend is yet to catch on. Usually, the next generation receives the title of ownership as part of the succession deal, notwithstanding the person’s ability to run a business.
Truth be told, the next generation are often qualified to do the job — they are smart and tech-savvy. Many of them have degrees in printing technology from the US or Germany. This is a good sign.
PrintWeek India tips for succession
1. Start early. Succession planning takes time. So take as much time as you need to ensure a smooth transition, typically five to 10 years ahead of expected retirement.
2. Learn to let go by delegating and working alongside the successor. Also, make sure that your successor learns to let go of his or her production tasks to move into management.
3. Be flexible. Remember, your succession plan doesn’t have to be carved in stone, but is an evolving process that can be changed and updated. Businesses and owners need flexibility.
4. Keep it simple. An economical succession plan in time and detail can minimise disruption, promote a smooth transition, and prevent everything things to come to a grinding halt.
5. Make room for mistakes and learning. The generation gap is natural and it can be a cause for the communication gap as well. The next generation will implement their ideas and practices; give them the space to do so.