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It is often seen that Family Owned & Family Manged (FOFM) Organisations at some point intime, hire nonfamily experts from within or outside the industry to accelerate growth andenhance the business. Family businesses may appear to be attractive employers for non-family professionals because of their informal and less bureaucratic structure. However, oncethey are in, most of them face challenges not anticipated by them or experienced in theirprevious employments. They can be as daunting as they can be rewarding.

The Case of Indian MNC Professional

“Zest Bliss” is one of the long sustaining personal care manufacturers, who started with oneproduct and now have a wide range of products. As it moved to the third generation, theproduct portfolio, revenue and size of operations grew. The first two generations, family leadersran the business by themselves. They depended on their close circle and people referred bythem. Family members managed all key operations. Once the third generation took charge ofthe Board along with second generation, the idea of hiring nonfamily professionals to key rolesarose and then came Ms. Yola as the Chief Marketing Officer- she was the Sr.Vice President inone of the largest FMCG companies.

Ms. Yola joined “Zest Bliss” with a lot of expectations. She anticipated that she did not have to report to multilayered corporate leaders. Sitting in the Head Office, she thought decisions would be faster, she would have more operational and financial freedom.

These points had been discussed and agreed during the initial meetings with Board ofDirectors. However, on joining she realised that the situation is far from reality. She neededapproval for everything, very action/meeting was questioned and needed approval from theowners. She had little powers for financial approvals and people authority. “This is the way wedo things here” /MNC culture will not work here” etc were the commonly heard phrases fromher peer group and subordinates. What added to her frustration was that so called progressivethird generation members also advised her to be patient.

Ms. Yola started contacting her recruiter.

This is the situation faced by most of the professionals when they join FOFM organisations, especially in the first phase of their professionalisation journey.

Are there any tips for such Non-Family Professionals who are contemplating joining or have just joined a family business? Well, here are a few pointers that could help them navigate the new environment more effectively and avoid disappointments.

  1. Understand the Family Legacy & Culture: Family values, culture and traditions are mainly handed down over generations and are unique to each family. Professionals who sensitize themselves to this at the very beginning will be better placed to manoeuvre and integrate into the system.
  2. Understand the Organisation Culture: Study the organisation in detail, understand the employer branding, take feedback on work culture either directly (from known employees/ex-employees) or from social media.
  3. Introspect on your alignment to the Organisation: Gauge if you can align to the Family Vision. Accept the role only once you are fully convinced that alignment can happen. It will allow you to make a much stronger case for change right from the start. Be rational and don’t let the grievance on current role or need of a job cloud your decision.
  4. Understand your Role: Deep dive all aspects of your role before meeting the board / director for interview. Clarify areas of concern, reporting, decision making etc. It is always better to clarify your doubts directly.
  5. Learn about the Current Leadership: Study about the Reporting Manager, their relationship with Board. As it’s a family board (mostly) try to understand the role of the Director especially the one who has direct connection with you during decision making. During the process of recruitment and familiarisation meet with Directors one to one and collectively.
  6. Ensure to meet all members of the Family Board before joining: This will help you to identify the long-term plan of the Board. It will also help to explain your operation style and plan for the organisation. Observe disagreements and challenges along the way. Notice the synergies. Visit the workplace and locality officially and unofficially a few times to know more about the local culture and facilities.
  7. Adapt to Change: This is one of the most desired attributes. Moving out of comfortzone, and not expecting to replicate everything you in the previous job will help. Everyorganisation is unique. Create what is suitable for this organisation. Since familytraditions are long-established, decision-making may be slow. Maintaining balance inbeing patient while at the same time offering fresh perspectives can go a long way.Preparing oneself to go through transition will reduce the impact of the changes.
  8. Build & Maintain Trust: Though important in every organisation, its criticality in family- owned ventures is amplified because of the need for loyalty and honesty. Maintain confidentiality and establish personal credibility. It will go a long way in getting accepted into the system faster.
  9. Observe Boundaries: Intentionally or otherwise, non-family professionals may get pulled into family conversations. Always maintaining professionalism, not crossing the line, not taking sides and not giving unsolicited opinions are of utmost importance. Be neutral.
  10. Be Flexible: As family members have the same background and upbringing, they may be used to doing things in a certain way. Hence there is the risk of groupthink and resistance to change. More so if the reins of the company are in the hands of an elderly person. On the other hand, the professionals may be used to certain other systems and processes. Getting buy in and making slow and steady changes rather than my way or the highway approach is important.

It is observed that most of the FOFM organisations are extremely hospitable and welcoming during the initial period of the new leader. However, conflicts start arising when they both are rigid, not able to change and not able to see each other’s perspective. This is where you need an Executive Coach, Most of the FOFM organisation appoint Executive Coaches for their Sr leadership team to guide them through the transition.

An experienced and Qualified Coach can guide the non-family professional bridge the gaps between the individual’s background and the family culture and help him/her assimilate better. Expectations mismatch on both sides can also be clarified by the Executive Coach. He/she can work with them to identify the right communication, processes and behaviours. In short, he/she can serve as an invaluable and objective resource to ensure an effective and smooth transition.

Thus, the professionalisation of family business will not exist only in paper but will be visible through the growth of the organisation.

 

Mr. M.R. Rajesh Kumar
Lead Partner

Ms. Sheela Warrier
Consultant Organizational Performance

Family businesses are unique entities that operate under a set of dynamics that are unlike those of other businesses. They are built on the foundation of family values, traditions, and history, and often strive to leave a legacy for future generations. However, to sustain and grow the business, it is crucial for family businesses to have a clear sense of direction and purpose. This is where the concepts of a vision statement come into play.

In simple terms, a vision is a statement that outlines the long-term goals and aspirations of the business. Even though family members are more likely to be on the same page when it comes to values, they are also more likely to have disputes about the business than non-family member employees. So, a long-term well-defined vision is critical for a family business as it helps in achieving a common goal and formulating a family succession plan.

A family business has been operating for many years, producing, and selling high-quality handmade furniture. The business has a loyal customer base, and the family takes great pride in the craftsmanship of their products. However, as the market evolves, the family notices a decline in demand for their traditional products. They realize that they need to adapt to changing customer needs and develop a new direction for the business. They had short term goals and did not look much into the future.

To guide their efforts, the family decides to create a vision statement that will articulate their long-term goals and aspirations. They spend several weeks brainstorming and discussing what they want the business to achieve in the future.

After much discussion, they create a vision statement that reads, “To become a leader in sustainable furniture design, delivering high-quality products that embody our values of craftsmanship, environmental responsibility, and community engagement.”

With this vision in mind, the family begins to make changes to their business operations. They invest in new technology that allows them to use sustainable materials and reduce waste. They also begin to experiment with new designs that appeal to modern customers while still incorporating traditional craftsmanship.

As a result of these changes, the business begins to attract new customers who value sustainability and modern design. The family’s reputation for quality craftsmanship remains intact, but they have also established themselves as leaders in sustainable furniture design.

This example demonstrates the importance of having a clear vision statement in a family business. Without a vision, the family may have continued to produce traditional furniture, failing to adapt to changing customer needs. This allowed them to successfully transition to a new direction for their business, ensuring its continued success for future generations.

 

The importance of having a clearly defined vision cannot be overstated. Here are some reasons why:

Provides Clarity and Direction
A vision statement sets the course for the future, outlining where the business wants to be in the long term. It provides clarity and direction to the family members and employees of the business, giving them a sense of purpose and direction.

Builds a Strong Brand Identity
A well-crafted vision statement can help build a strong brand identity for the business. This is particularly important for family businesses, which often have a unique story and history that sets them apart from their competitors. By articulating the values and purpose of the business, a family business can create a strong brand that resonates with customers, employees, and other stakeholders.

Helps to Attract and Retain Talent
In today’s competitive job market, it is important for businesses to attract and retain top talent. A clear and compelling vision statement can help to attract employees who share the same values and are passionate about the purpose of the business. This can lead to a more engaged and committed workforce, which is crucial for the success of any business.

Guides Decision-Making
Having a clear vision can guide decision-making within the business. When faced with difficult decisions, family businesses can refer to their vision statement and use them as a framework for making the best choice. This can help to ensure that the business is aligned with its values and purpose and can avoid decisions that may be detrimental to the long-term success of the business.

Facilitates Succession Planning
Succession planning is a critical process for family businesses, as it ensures the smooth transition of leadership from one generation to the next. Having a clear vision can help to facilitate this process by providing a framework for the future direction of the business. This can help to ensure that the business remains true to its values and purpose, even as new generations take over.

Increases Resilience
Finally, having a clear vision can help to increase the resilience of family businesses. By articulating the purpose and values of the business, family businesses can create a strong sense of identity and purpose that can help them weather difficult times. This can be particularly important during times of crisis, such as economic downturns or natural disasters.

In conclusion, the importance of having a clearly defined vision cannot be overstated for family businesses. Vision statement provide clarity and direction, build a strong brand identity, attract, and retain talent, guide decision-making, facilitate succession planning, and increase resilience. By taking the time to develop and articulate these statements, family businesses can ensure that they are well positioned to face any adversities.

 

Shehzan P. P.
Senior Associate Consultant
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One of the companies we associated with had well-established processes and tools meant to digitise their day-to-day activities. Yet (not very surprisingly), we found gaps during the initial investigation (understanding the gaps between what is presently available and what is required for growth).

Investigation revealed the tool was not robust enough to manage the operations of the company, which were led and defined by processes or policies. What you, as a decision maker in a company, need to understand is that “one size fits all” is not applicable in terms of software. While any software can increase efficiency and provide transparency, it could be limited based on the services it provides. Keep in mind that the software you select today will define the company’s operational efficiency for the next few years; lift and shift is time and resource intensive.

One of the reasons family businesses start looking for HR software is to automate all processes that are time-consuming and interdependent in nature.

Our extensive experience working with various businesses over the years should benefit you as decision-makers.

Software selection is not as simple as you may believe. Ask yourself, as a business owner, first, “Why do you need HR software?” The need typically arises either because there is a problem or because you anticipate having one in the near future. So, to begin with, you have to recognise your problems or gaps and prioritise their resolution, and that becomes your requirement.

How do you do it?

1. Recognise pain points and define

This is not guesswork. List and define persistent and recurring problems that may be solved with automation. A pain point is a difficulty that is preventing your business from experiencing positive growth. It could be simple or complex and difficult to identify.

2. Prioritize

Determine the severity (the impact on business). This goes without saying, but the pain point with the highest severity would need to be immediately looked at and resolved.

A quick tip, not every persistent problem would need a high priority or critical tag. Sometimes those rarely recurring problems can have much more impact on business. This exercise needs to be carried out keeping the above in mind.

A way to look at the issue.

  • High: If we do not fix this, this is going to continue consuming man-hours.
  • Medium: There are a few barriers to efficiently executing a task. It impacts overall performance.
  • Minor: The process is tedious but not chock-a-block. This could be revisited later.
3. Foresee the business challenges

As a decision-maker, you should anticipate challenges while keeping the company’s goal in mind. Regardless of what the goal is, it is vital to build a strong process surrounding operations and reduce man-hours spent on carrying out day-to-day operations, etc.

Running a risk management exercise from time to time helps figure out the scenarios most likely to occur and the potential outcomes of those situations. Put your thinking cap on and brainstorm ways you can reduce the risks. The solution could be revamping a process, automating it, eliminating flows, etc. Identify how HR software can possibly help resolve it.

One would eventually see that the points mentioned would become criteria for the evaluation of the software.

4. Designing credible evaluation criteria

Following the identification of challenges,

  • List the existing operational process and every task/flow within it.
  • List down ideas (already planned) to revamp the processes to make them efficient and effective (risk analysis is a good way to go about it)
5. Identifying potential vendors

With requirements determined already, you can now start the search for HR, from searching the internet to speaking to known business associates in the same industry. Make a list of possible vendors and narrow it down to a few to approach.

How to evaluate a software?

Demonstrations on an actual scenario (an existing process) are the best way to evaluate a software’s capability. While your top consideration for evaluation should be how easy it would be to “Lift and Shift,” we advise you consider the below points as well.

  • The majority of software packages on the market now provide a somewhat comparable solution; what you should consider is how much it can accommodate the current processes. Simply put, can it effectively alleviate your pain points?
  • Note the manual involvement that is required. If it does not save at least 50% of man-hours, it is probably not the best option.
  • Their (the vendor’s) ability to meet feature demands. Company operations and processes are always changing, and as a result, the module would also need to be adjusted. Choose a tool or vendor that is amenable to criticism or has ideas that can eventually be put into practise.
  • While automating current operations is a key prerequisite for implementing HR software, consider what else it might provide that you might employ in the near future for the company’s advantage.
  • Ensuring that the software we choose has prompt customer service.
  • Choose a vendor who believes they can bridge the gap between idea and reality.

Making a wise choice from the many software options is a significant undertaking in and of itself, but there are still many steps to take before the system is configured and ready for use, which we will cover in our following post.

 

ROSE MARY S
Senior Associate Consultant
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The year 2023 started off with a bang at GatewaysGlobal and for me especially. As usual and a every year’s last week custom, was on personal leave celebrating Christmas, our two wonderful sons’ birthdays followed by new year celebrations.

With covid protocols taking back seat and talks of global recession and layoffs among some of the big names taking the headlines; below are some areas that would be in focus during 2023 as per our interactions with clients who are predominantly in family business space and HR fraternity

  • Workplace Stress – It is the emotional, mental, and physical strain caused by the demands and pressures of a job. It can stem from a variety of sources, including heavy workload, tight deadlines, lack of control over one’s work, conflicts with co-workers or supervisors, and job insecurity. Prolonged stress can lead to burnout, physical health problems, and decreased job performance.
  • Employee Experience – The moment of truth or the real-time experience of employees in their day-to-day working is very crucial for any organization, especially in a family business to succeed and improve. These experiences help foster a positive work culture, boost innovation, engaged employees and ultimately lead to better outcomes like brand reputation and customer service & satisfaction.
  • Employee Development – Family businesses take advantage of global recession & layoff’s and lower attrition by developing their key / critical resources. They would invest in employees to acquire new skills and knowledge which allows them to be more effective in changing technological advancements. This in-turn helps these businesses to improve employee performance, retain top talent, stay competitive and support long term success
  • Employee Engagement – With relaxation in covid protocols and as businesses are slowly opening their doors for employees to work full time in offices, the work-life balance and employee mental and physical well-being are of paramount importance. Any organization’s growth and success is hinged upon the emotional and intellectual commitment that their workforce have towards their work and organization. So now we are seeing multiple engagement activities being planned & actioned by family business owners to build up their engagement scores.

Family businesses will be focussing on the above areas to improve their results in the coming year. But there are multiple strategies to overcome and there is no one-size fits all solution. Every organization should tailor their approach to their specific workplace. If you are planning initiatives in this space, feel free to reach out to us.

Senior Consultant – Organizational Performance

VIJAY GOPI AYYANATTU
Vijay is the senior consultant at GatewaysGlobal. Well-grounded with two decades of experience, Vijay specialised in Global Workforce Management, Human Capital Strategies, Redesigning of HR processes/improvisations taking advantage of the Lean Six Sigma and ISO Standardisation tools and so on.

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