INSUBCONTINENT EXCLUSIVE:
It has been the proverbial question corporates live with: Who next No prizes for guessing
Succession planning is a truth companies can ignore only at their own peril.
There is no dearth of examples
Take, for instance, ICICI Bank, Axis, or for that matter, Yes Bank
They just go on to show how critical it becomes to have a clearly laid down policy on matters as delicate as succession
Especially so when more and more companies are going global in their looks and character with each passing day.
This entire exercise can be
extended to family businesses, as borne out by a recent report by PwC India, titled Family, Legacy and You (FLY).
In a Catch-22One of the
startling findings of the survey is only 28 per cent of the next generation have clarity on their future roles
The dilemma for the rest mostly stems from the age-old question: What comes first -- family or business
Those that put the family first
is only 15 per cent of family businesses have a robust and documented succession plan in place
practice keep a tight control over issues that really matter.
Some bits of more statistics will help you get the gravity of the matter
More than 50 per cent of GeNext expect or hope to be managing their business in future
A reasonably good 40 per cent of family businesses are on the cusp of a change of guard in the next five years!
Why it's so crucialThe
make-up of a family business leaves it vulnerable to conflict at times
According to the report, 76 per cent of Indian family businesses believe that the family and business strategies are completely aligned
Only a mere 6 per cent admitted to misalignment in interests.
"Managing conflict is the key to not just the survival of the business, but
the survival of the family itself
And the issues that can put the business at risk are mostly internal," Ganesh Raju, Partner and Leader, Entrepreneurial and Private
Business, said in the report
Hence, the need for a clear road map.
Clarity on who will succeed whom also helps in seamless transition of leadership and ensures what the
survey calls continuity planning.
Mind the gapThe report points to various potential minefields while managing a family-owned business,
calling on the stakeholders to be mindful of the same.
Credibility gap: Most next generation finds it challenging to bridge the credibility
gap, particularly with professionals working in the business
Generation gap: This has mostly to do with differing perspectives and
expectations of current and next generation, which only aggravate the divide.
Communication gap: There is also a feeling with the newer lot
that there is resistance to change from their predecessors
According to PwC, succession planning is all about devising a strategy to ensure the ownership and management pass onto the right people at
the right time and right controls are in place when it happens
The bigger point is: Can Indian companies master the game Only time will tell.
