Oct 27, 2016 - QIMAT RAI GUPTA. 24 ..... rajesh gupta were asked to pore over Sylvania's balance ..... instincts of thei
Families Business &
Business For Generations
Volume IV Summer 2017
www.familiesandbusiness.in
Kim Lalli Wise Ways to Deflect Conflict Vikram UPADHYAYA
Succession Planning for Startups
Gaurav Mehta Changing Rural India
The Art of Effective Decision-Making Volume IV
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Editorial
Discover Amazing Stories in Amazing Thailand Rock Climing , Krabi
The magazine began as an e-magazine one year ago. The team was enthusiastic and armed with our convictions we were sure that the magazine would find resonance with its target audience. The response we received, however, went beyond our expectations and we were flooded with messages. We also received valuable feedback about the content and how to make it more relevant. Taking all into account it is with great pride and pleasure that we present this Summer Issue of Families & Business Magazine. You will read inspiring stories of Family Business Owners who are making a difference. There are some that are continuing with the business of their fathers while others who have chosen to break off and start a business that defines them. There are stories of the first- generation entrepreneurs who have taken the plunge into the exciting world of business leaving behind the security of a ‘steady job’. You will also find it interesting to read about professionals as they work like a Family Owned Business where their family comprises of their
“Professionals bitten by the entrepreneurial bug tell their story in this issue”
colleagues! Do keep your feedback and comments coming to us. You can write to us on
[email protected] Here is wishing you an enjoyable reading experience. Cheers Sonu Bhasin
Editor: Sonu Bhasin Consulting Editor: Shubhra Krishan Editorial Content Team: Stephanie Colaco, Vatsala Vats, karan bhasin Marketing & Business Development: Sunil Mehra Editorial Consultant: Juggi Bhasin Executive Consultant: Mandeep Singh Authority of Thailand Design and Layout: Vijay Rana
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Content
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Advisory Boards for Family Businesses
Vishal and Shalini Jindal: A DELICIOUS SUCCESS STORY
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Choosing the Ideal Successor from Gen-Next?
The incredible Journey of Gaurav Mehta
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Gunshots, Litigation and Heartbreak - How To Avoid Disputes In Family Businesses
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In Conversation with Kim Lalli, Senior Partner, Wedlake Bell
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Book extract - Havells:: The Untold Story of Qimat Rai Gupta
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Do Startups Need to Worry About Succession Planning?
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The Finer Things in Life
The curse of family businesses in Bollywood
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Keep these in mind to avoid financial Instability in your Family Business
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Taha Coburn-Kutay, Chair UK Asian Business Council, speaks about his journey from India to the UK
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Effective Decision making is a key to success in a Family Business
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Do what You Say and Say what You Do
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Getting Ready for the Rapid Growth of your Family Business?
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Balance of Power in a Family Business Key facts 4
Keep your Family Business insulated from Family Feuds
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THE CASE STUDY CHALLENGE Families Business &
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Advisory Boards for Family Businesses
Companies are statutorily required to have a board of directors, and some companies (listed companies, large unlisted companies) are required by law to have outsiders (independent directors or non-executive directors). An advisory board, by contrast, is purely a voluntary decision. The common factor is that you are constituting an external group to advise the leaders of the organisation.
I write this article from three perspectives. The first, as an Advisory Board member, I serve on the advisory board of the Centre for Advanced Mediation Practice (www. campmediation.in), India’s leading private mediation institution. Second, as an entrepreneur, I’ve established an Advisory Board for Vahura (www.vahura.com) and benefited tremendously from the counsel provided by our advisory board members. Lastly, one of our service lines - Vahura Onboard, helps organisations select and appoint advisory board members and non-executive directors. In all three roles, I’ve experienced the tremendous value that Advisory Boards can bring to an organisation and its leadership.
By Ritvik Lukose
Are You Ready For An Advisory Board? Advisory boards are not for everyone. A functioning Advisory Board, takes top management bandwidth, and a certain level of organisational discipline. This is different from ‘name-lending’ advisory boards, where the company
“Advisory boards are not for everyone. A functioning Advisory Board, takes top management bandwidth, and a certain level of organisational discipline. This is different from ‘name-lending’ advisory boards, where the company gets high-profile personalities, who don’t actually get into the business or play an advisory role.”
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“A word of caution: It is important to remember that the advice of the Advisory Board or its members is non binding and merely persuasive.”
gets high-profile personalities, who don’t actually get into the business or play an advisory role. Consider the following questions to determine whether you are ready to build an Advisory Board • Are you past the survival stage, and have the resources and time to purposefully build for the future? • Are you willing to open up your business and strategy to ‘outsiders’? • Are you ready to go beyond your current comfort zone? If you’re answer is a yes to all three questions, you’re ready to build an advisory board. If not, it may be prudent to pause and ask the question - why do I want an Advisory Board?
The Value of an Advisory Board Better decision making: The Outside-In Objective View Its lonely at the top and leaders run the risk of becoming too insular. An external group of experienced advisors, can act as an objective sounding board and brains trust. This will help test the merit of an idea, offer new perspectives or information, and ultimately improve the quality of decision making.
Enhanced reputation and reach: The Network Effect A high profile name on your advisory board certainly enhances the reputation of your organisation, and helps punch above your weight. What is even better, is to have Advisory members, who are willing to put their networks to work for you. We recently had a client, who operated in a highly regulated sector. The client brought on board, a retired government official, whose reputation and network, made it easier for the organisation to navigate the regulatory issues. Advisory board members, can also help make introductions to clients, investors, advisors, and even potential employees. A word of caution: Some people are reluctant to activate their networks. It is important to clarify this expectation and ascertain to what extent the advisory board member is willing to be your evangelist.
Better corporate governance: The bridge to a professional board For companies who are unaccustomed to having outsiders on the board of directors, the advisory board, can be a stepping stone to running a professional board. Structured advisory board meetings, with a clear agenda, where business information, risks and strategy are discussed, help set a culture for professional board meetings.
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Remunerating your Advisory Board members There are no prescribed methods or set market practices (especially in India) for remunerating advisory board members. Below are some of the common practices that we see in India. Pro-Bono: For early stage companies and not-for-profit organisations, in particular, we do see Advisory Board members, who do not charge a fee. The organisation does make an effort to reimburse expenses, or provide travel and food on the days of the Advisory Board meetings. Charitable Contributions: In some cases advisory board members (often friends or family) find it awkward to charge a fee. In such cases, we’ve seen the organisation make donations to a cause that is supported by the advisory board member. Sitting Fees: The most common practice is to pay a fee for every meeting attended by the Advisory Board member. This is typically done after contemplating an annual schedule of meetings, with a clear assumption of how long a typical meeting would take. Some of the meetings may be individual, while only one or two meetings, involve the collective advisory board. The fees are paid on a monthly or quarterly basis, depending on the frequency of meetings. Stock: We do see start-ups and early stage companies offer stock to Advisory Board Members. The range is typically from 0.1% to 1% of the overall shareholding of the company. Stock options are not as popular, due to regulatory restrictions in India. Commissions: Companies are happy to offer commissions especially if the advisory board member has helped the company generate business, raise funds, increase revenue or reduce costs. Unlike director remuneration, we do not see commissions paid out that are linked to the overall profitability of the company.
For companies that are required to have indepenent directors, advisory board members, provide a ready pool for future independent directors of the company. Given the greater liability that comes with a director position, an advisory board stint, gives the individual the comfort and familiarity often required to commit to a full fledged director role. A word of caution : It is important that the advice of the Advisory Board or its members is non-binding and merely persuasive. If the board of directors or top management is “accustomed to act” according to the dictat of the advisory board or its individual members, such advisors will face the same level of liability as that of a director or officer of the company.
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“it works because the person with a mentor has a responsibility to stand up and actually get moving. The only way to repay your mentor is by showing the guts it takes to grow and to matter”
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Holding Yourself to a Higher Standard Holding yourself to a higher standard, is ultimately the only reason you should have for building an Advisory Board. It is also why we feel scared or vulnerable, when we start thinking about putting such a board together. It forces us to move beyond our comfort zone, open up to our mistakes, and make a commitment to grow. This is true of any form of mentorship, of which the advisory board is a particular form. In the words of Seth Godin – “…it works because the person with a mentor has a responsibility to stand up and actually get moving. The only way to repay your mentor is by showing the guts it takes to grow and to matter.”
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Ritvik is the Co-Founder & CEO of Vahura. Vahura is the leading legal and governance search and consulting firm in India. Vahura Onboard helps organisations structure their boards and induct directors and advisory board members. Ritvik is active on social media and can be reached at
[email protected]
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Families in Business Symbolise the power of teamwork.
Choosing the Ideal Successor from Gen-Next?
But sometimes, conflicts crop up. Sales dip. The road feels rocky.
5 Easy Steps to Keep in Mind
That’s where we step in.
FAB Content Team
Take our expert advice. Foster better bonds. Post higher profits. Travel smoother toward your combined goals.
Passing on the torch to the younger generation is inevitablefor almost every family business, but simply deciding to hand over the reins of a painstakingly-established enterprise to one offspring may have disastrous consequences for the business. When it comes to choosing a successor for a family business, a well thought out plan and an early start is vital to choosing the right person. So here are five tips on taking the best course of action:
1. CRAFT A SUCCESSION PLAN Your family is your best team. However, succession planning is a trickier and complex process. Start work on it early and include a series of detailed steps, so that there aresome criteria laid out as a selection process. These steps should include the family’s mission statement, future plans for the business, estate planning, and other important legal and financial aspects. This will help you identify the right person/people who can provide inputs to take the business further.
2. FOCUS ON A PHASED TRANSITION PROCESS Rome was not built in a day. Similarly, it would be unfair to expect that someone from the next generation will take on every duty head on from day one. Rather, let people build credibility for the role through a gradual transition process that starts with apprenticing under senior executives to learn operations management and other aspects of the business. Allow proper time for each phase of this process. This will also allow you to observe their progress, mannerisms, approach to conflict management, and leadership abilities.
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3. DO NOT TAKE ON THE TASK ALONE Keep your options open while choosing a successor if you wish to ensure the business’s growth in the future. Now, picking one out of similarly-qualified and credible potential leaders can be a daunting task, so take recommendations from a trusted board, senior employees across departments, and other nonfamily staff members to arrive at a decision.
4. ADAPT TO THE WAY THE NEXT GENERATION WORKS A lot of family businesses in India experience a clash of valuesin the approach to business once the younger generation starts getting involved. It may not be easy, but be receptive to newer ideas and understand that your business also needs to undergo change with time
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to keep up with the rest. Encourage potential successors to communicate future strategiesand new processes. This will also help you evaluate their passion and loyalty towards taking to new heights what you have built for them.
5. KNOW THAT THERE CAN BE ALTERNATIVES You can have detailed plans and offer the best of hand-holding to a younger family member for him/her to have a smooth transition process. But if that person is not fit for the role or their interests lie elsewhere, your business faces the threat of disaster. If your effort to find an ideal successor has not worked over a period of time, start looking at other options such as hiring a non-family member to take on the top post or even selling the business rather than face imminent closure a few years down the line.
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[email protected] We care about your family. And your business.
Cover Story
In Conversation with Kim Lalli, Senior Partner, Wedlake Bell
“People are people wherever they are. The dynamics of families in business in India and the UK of course have similarities and they face similar challenges.”
Wedlake Bell has many clients who are Family Business Owners. As their legal advisors you have insights into the family dynamics besides the business. What, based on your experience, are the main reasons for conflict within Family Owned Businesses. As a corollary, how would you address these reasons if you were called upon by the families? As with any business, most conflicts arise when situations are not clearly defined or properly managed, and in particular, the expectations of individuals are not understood and managed. There are a number of issues which can result in conflict if not addressed properly (and sadly, it is often the case that they are, for one reason or another, not so addressed): Succession – it is important to know when and how to hand over the reins, and plan accordingly. The role of family and non-family members within the business must be clearly understood by all. Family businesses are particularly prone to conflicts due to the often competing personal and business interests at play, which can be exasperated by internal politics or other events that occur in ordinary family life. The questions which arise include whether the successors are ready, and what the person handing over (often a parent) will do in retirement. If they are to remain
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involved in some way, it needs to be in a manner which does not tread on the toes of the appointed successor/ successors. Then the question arises of who is the best choice of successor, if there is more than one possibility. Is it a family member and if so, how does one address the aspirations of other family members? If not dealt with properly, this can cause family conflict which divides the family and has long lasting repercussions on relationships. If the successor (whether a family member or outsider) does not have the support of the whole family, it is difficult to step in smoothly and ensure a successful transition. Family entitlement - there may be differences in the view of members of the family as to what they should get out of the business. For example, there may be members who are active in the business and others who are “sleeping partners”. Some may wish to reinvest profit into the business and ensure growth over the long term, whilst others may be more interested in the short term dividends, so disagreements can arise in this regard. Lack of effective communication is a common problem – whilst there are inevitably sensitivities in dealing with members of a family (and indeed others), communication is key, and it is important to prepare people in advance so that when succession choices are made they do not come as a shock. Preparation for succession can of course include giving family members roles of equal importance, which complement each other, so that each person feels that they can make a valued contribution. We would advise our clients in such a situation to have a clear succession plan and strategy for growing (and possibly, selling) the business. This is a large part of
the solution. We recommend, and can often assist with, encouraging co-operation between family members, mutual trust, and clear and regular communication. We try and help our clients to understand and manage the dynamic between the family, the owners of the business and the management, putting in place structures at a family level and within the business itself to make the position as clear as possible for everyone and to avoid the lines between ownership and management becoming blurred.
You visit India often and have insights into the dynamics of Indian Family Business Owners as well. Do you see similarities in the dynamics of families in business of India and the UK? If yes, what are the similarities? People are people wherever they are. The dynamics of families in business in India and the UK of course have similarities and they face similar challenges. Although strong cultural traditions and having respect for elder generations have, to a certain extent, protected Indian families longer from conflicts generally, they are now seeing some of the issues that UK family businesses also struggle with. For example, younger generations have often now benefitted from the best educational opportunities available, and may well be graduates with business or related degrees from well known universities. They think independently and are more confident of their views, and are very entrepreneurial. Their ideas may challenge the patriarch or indeed, matriarch, but should be considered since they often bring something new and beneficial to the business. Sometimes of course,
“In our experience, the family businesses which are most successful and survive down to future generations (both in the UK and in India) tend to mentor family members in the values of their businesses and involve them at all levels at an early stage.”
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“I was born in India, and my parents moved to the UK when I was three years old. Most of my education was in the UK, My personal values derive from both cultures, and I try to take the best from both.” You lead a legal firm with hundreds of professional lawyers and many equity partners. Thus, in a sense it could be said that you, too, head a Family Owned Business where the ‘family’ is the equity partners! Does Wedlake Bell resemble a family business in any way?
their enthusiasm may need to be reined in by the older members of the family who have practical experience which is also relevant! Younger generations of both sexes are now actively seeking and playing a role in the family business which, unless properly managed and planned for, can lead to cross-generational conflicts arising as well as those between siblings and other members of the family.
Is there a difference in the way Family Business Owners (FBOs) in India deal with their own family dynamics when compared to the FBOs in the UK? If yes, could you elaborate. The psychological make up of successful entrepreneurs is similar in both countries, in my view, and they are very hard working and dynamic people, and often, have relied on their families to support them in growing the business. However, the business is “their baby” and it is hard to let go, even when they know that it is best for the business. There may also be difficulty in making (and then managing) the tough decision whereby perhaps one child must be chosen over another to have the key role in a business when the time comes. Every FBO will encounter challenges within their family dynamic. However, the extent to which these challenges impact on the family business will depend largely on
whether the family has an effective mechanism in place to resolve such issues. In our experience, the family businesses which are most successful and survive down to future generations (both in the UK and in India) tend to mentor family members in the values of their businesses and involve them at all levels at an early stage.
That is indeed an interesting question! Yes, I think that we do resemble a family business in many ways –I certainly like to think of us as a family. There are shared values, ambitions, history and a sense of being on a journey together. We probably spend more time together at work than we do with our own families, so there is a shared bond, which is strengthened by socialising together and supporting each other through times of personal difficulty. The other similarity is that it is necessary in both situations to help people make the most of their talents, and understand that each of us contributes in a different, but equally valuable way. And of course, there may be sibling rivalry type issues, or indeed questioning of decisions made by those in management roles……….just as in a family. And of course, succession planning is always relevant as partners move closer to retirement. We want to ensure that our clients are looked after and there is a smooth transition when this happens, so they continue to work with lawyers that they know and trust. Our shared values have resulted in a strong sense of collegiality at Wedlake Bell, and a culture which is highly valued by us. Maintaining it is very important to all of us, and key decisions in running the business are taken in a collaborative manner, with each person having a voice, and due regard being given to their views. That helps to keep the Wedlake Bell family united and having a shared sense of purpose.
Could you tell our readers about your personal journey, Kim? You are a wellrespected legal professional not only in the UK but also in India. Take us through your journey which I am sure had challenges along the way and how did you deal with those challenges. I was born in India, and my parents moved to the UK when I was three years old. Most of my education was in the UK, although I did spend a few years in my early teens at boarding school in India. My personal values derive from both cultures, and I try to take the best from both. Yes, there were challenges growing up in the UK at a time when it was not as multicultural as it is now, and in joining a profession which at that time did not have as many women or members of ethnic minorities in it, but each challenge makes one stronger, and a better individual for it. I don’t believe in wallowing in self pity – you have to face up to each challenge as it arises, and recognise that everyone has to face challenges of one sort or another. I feel very fortunate to have had the opportunities which were given to me, and my journey has made it clear to me that if you are willing to work hard and enjoy what you do, then success follows. The key is to enjoy your work – then it never feels like hard work! I have met some wonderful people in both countries, often as a result of my work, and they have helped to make my journey memorable and fun.
Your work carries with it huge amounts of stress. What is your de-stress mantra? To have a strong network of friends (and I count many of my colleagues amongst my friends) and family who are always there to see me through.
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Book Extract
Havells: The untold Story of Qimat Rai Gupta
“Rothschild’s New York office had got the mandate to sell Sylvania, the lighting company. For some strange reason, Sylvania was not offered to buyers in China and India but he contacted us immediately.”
Chapter 15: The Sylvania Files A thrilling account of how Havells acquired Sylvania – a company close to double its size
Rajesh Gupta, our CFO, had attended a bankers’ conclave in South Africa where he had met representatives from Rothschild, the famous investment bank. During their talks, he told the Rothschild representative, Naveen Wadhwani, that Havells was looking for an overseas acquisition. Later, Wadhwani came to know that Rothschild’s New York office had got the mandate to sell Sylvania, the lighting company. For some strange reason, Sylvania was not offered to buyers in China and India but he contacted us immediately. The proposal was quite straightforward. Sylvania had a turnover of almost €500 million and an operational profit of around €30 million. The owners were looking at a price- earnings multiple of seven. So, for around €200 million, the company could be ours. Also, since we were interested in a leveraged buyout, we were told that Sylvania had the capacity to mobilize up to €140 million of debt. In other words, with an investment of €60 million from Havells, we could potentially buy out Sylvania. Of course, we were instantly interested. Sylvania had an illustrious past. It had started life as Hygrade Sylvania in 1931 in the United States. In 1939, it made the world’s first tubular fluorescent lamp, or tube light. In 1959, it merged with General Telephones to form General Telephones & Electronics. This company, in 1993, decided to sell the Sylvania lighting business to Osram of Germany. Sylvania was strong in both Europe and the Americas. When Osram was set to acquire it, the European Commission said it would lead to a monopoly in Europe. Osram was actually only interested in the American business of Sylvania. So, it acquired the American business, which comprised the United States, Canada and Mexico, while the rest was sold to Citi Ventures Capital.
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“Sylvania was one and a half times bigger than us in terms of revenues. We had very little experience in global markets, except for our exports and the aborted acquisition of Electrium”
Was it a good idea to walk into unknown territory? Our well-wishers advised us to be cautious. Sylvania was one and a half times bigger than us in terms of revenues. We had very little experience in global markets, except for our exports and the aborted acquisition of Electrium. Did we have the expertise, skill and management bandwidth to deal with Sylvania managerially, operationally and technologically, they asked. Were we about to bite off more than we could chew? Clearly, Sylvania would be a much larger acquisition than Electrium in terms of its price tag. It was twice as expensive, or even more. We had the ability to raise the money required for the purchase but did we have the fortitude to manage such a huge expenditure? These were all valid issues. A risk-averse person might have even given up this quest, but no dream was too big for QRG. As the naysayers debated the matter, QRG’s enthusiasm had already set the acquisition ball in motion. Rothschild was told we were interested. Internally, Ameet, Sikka and Rajesh Gupta were asked to pore over Sylvania’s balance sheets and other documents that were available in the public domain. Sylvania was definitely on our radar. The negotiations immediately hit a roadblock. Rothschild said that our offer would come into play only if the existing bidder on the table was rejected by Sylvania. Though we could not learn the identity of the bidder, we immediately had visions of the Electrium fiasco. We feared having to go down the auction route again where we risked overpaying; we may have been ambitious, but we were not reckless. QRG felt the same way. We had to act fast and decisively. Encouraged by QRG’s infectious aggression and enthusiasm, I too got excited by Sylvania. The shareholders of Sylvania (it was closely held) had mandated the company’s CEO, Paul Griswold, to find a buyer, negotiate and sell the company. I called up Griswold and told him that we were in the lighting business and, hence, we were a serious buyer. I questioned why he was looking to sell Sylvania to pureplay financial investors, who would invariably rip the company apart, sell off its various assets and ruin it. In contrast, we would run the company as it was, for we were in the business for the long haul.
Sylvania then went through bankruptcy and was purchased by a clutch of private equity funds—DDJ Capital, Cerberus Capital Management and JP Morgan— which turned it around in due course. And now they had put it on the block. Being financial investors, they felt it was time for them to book profits on their investments. There was a reason why QRG was interested in this company. Sylvania had a presence in India through a company called Sylvania & Laxman that was set up in 1962. Its factory was located at Najafgarh Road, not far from Kirti Nagar where Havells had set up its first unit in the seventies. In the seventies and eighties, its products were doing quite well in the market. QRG remembered that Sylvania Laxman was an even bigger brand than Philips in India. In the last few years, the business had gone into decline but there was no denying Sylvania’s brand equity. At that time, the worldwide electrical market was around $1 trillion in value but was highly fragmented. Average profitability, various studies suggested, was in the range of 5–8 per cent. Most markets were growing at the same rate as their GDP. The United States was, of course, the largest market with a share of 29 per cent. Western Europe, comprising sixteen countries, came second with a share of 22 per cent—China and India had not exploded on the world scene then. QRG was clear that our next phase of growth would come from the acquisition of a strong company in the West. Sylvania fit the bill perfectly. I was in total agreement. Some people had their doubts despite QRG’s enthusiasm. We had entered the lighting business in India a few years ago, and we did not know much about the domestic business, let alone the global market. Was it a good idea to take over one of the top four lighting companies in the world? Also, wouldn’t it be wiser for us to grow in switchgear, which was highly profitable rather than lighting? Switchgear, obviously, was a better fit than lighting, but the fact was that the bigwigs like Schneider, Siemens and ABB, had started gobbling up mid-sized switchgear companies, which left very few opportunities for people like us. There were other issues as well. Unlike Electrium, where we knew the company as well as its management, our information about Sylvania was sketchy, to say the least.
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up for dinner. It was just the four of us—Griswold, Craig, Ameet and me. Craig came to the point straightaway and said we needed to offer more. I told him that we could raise our offer to €225 million. Craig demanded €230 million but finally settled for €227.5 million. We shook hands over that. Immediately, I sent an SMS to Apurva Shah of Deutsche Bank, who was having dinner with other Sylvania executives at another restaurant. He messaged me back, ‘Let’s wait till tomorrow.’ Often, for some inexplicable reason, investment bankers develop cold feet at the last moment, especially if it’s a big-ticket deal. But that’s not how entrepreneurs work. I sent him back another message, ‘Already done.’ That was it. Over the next few weeks, Ernst & Young did a quick due diligence of Sylvania, and concluded that the price we had offered was slightly high—about €10–15 million—since the company’s profitability was weak. QRG felt the price differential between the fair price and our bid was too low and, if this was the only risk, it was not an important one. In fact, during the 15 December meeting, when the bid was finalized, QRG was in constant touch with both Ameet and me to find out about the deal. He pushed us to close the deal the same day, and questioned why we were unable to do so. Ameet later quipped that he found it difficult to deal with the seller’s queries and QRG’s questions almost at the same time! By February 2007, a few more adjustments were made to the contractual clauses. Finally, the agreement was ready to be signed in March. One day before the Havells board was supposed to meet, at Hotel Imperial in downtown New Delhi, Craig said he hadn’t read the documents fully and needed more time. This sent us into a tizzy—we had not just called the board meeting but had also told the media that we were going to make a big announcement. I called up Craig right away but he wouldn’t budge. We had to reschedule our plans, which was not easy. The deal was finally completed ten days later, and we made the payments in April 2007. We had Sylvania—we were ecstatic. We had arrived on the global scene.
Griswold maintained that the current discussions were in late stages, and it would take time to allow a new bidder into the fray as it would involve fresh discussions with the board and lawyers. I did not give up; I asked him if we could meet on Monday (this discussion happened on Friday). Reluctantly, he agreed to meet us on Tuesday. Our team flew to New York right away. There was no time to lose. That was our first meeting with Griswold. Then in his fifties, he was a mountain of a man—six feet, eight inches tall, and weighing 125 kg. He had an impressive bearing and was a convincing talker. We had nobody like him in our team. In very little time, we were under his spell. While Griswold told us about the company, we made a presentation on our plans vis-à-vis Sylvania and Havells, and put in a bid for €200 million. Deutsche Bank agreed to underwrite the purchase price, as it had done with Electrium. Suddenly, during the first week of December 2006, things became eerily quiet. Despite repeated calls, we got no replies from either Sylvania or its investors. We were piqued but decided to relax and not worry. We disengaged ourselves from the deal for a few days. Fortunately, Sylvania came back to us and the deal was back on track. However, the company said that while we could start the due diligence process, it would not give us ‘exclusivity’ which meant that others could also bid at a later stage. We insisted on exclusivity as we did not want a bidding war, or an auction, after our experience with Electrium. We wanted to wrap up this deal as quickly as possible. I tried another tactic; I proposed a meeting between Sylvania’s shareholders and Havells’s team to thrash out pending issues, including the price. It was mutually agreed to hold the meeting on 15 December. The place chosen was a resort at Chantilly, near Sylvania’s main European warehouse in Paris. There were three of us—Ameet, Sikka and me. On their side, Griswold had come with Jackson Craig, the main shareholder of DDJ Capital. At this meeting, Craig led the discussions. He was short, sharp, financially savvy and to the point. Our discussion moved back and forth during the day. Finally, we broke
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but shared Prithviraj’s vision of enacting roles and making films that endeared them to the Indian masses. Raj Kapoor at an early age made films that reflected the socialistic concerns of the day. It was a different matter than Raj Kapoor in real life was flamboyant and had rumoured or real link ups with many of his leading ladies. All that was forgiven when Raj Kapoor played roles of a man of the masses, the underdog who came from nowhere to make a statement, the caring lover who would go ends of the earth for the woman he loved. It was not surprising that Raj Kapoor’s artistic association with the then Soviet Union found favour with the masses. The Kapoor brothers in different ways enthralled audiences and strengthened the bond between good film making, family pedigree and social upliftment. Shashi Kapoor and Shammi Kapoor in different ways reflected the upbeat spirit of the sixties. Shashi Kapoor’s association with his wife Jennifer and the elderly Kendall’s symbolized in a sense that India was ready to forgive and forget British injustice of the past. A new India was waiting in the wings to emerge. At another end the actor Sunil Dutt was also making a name for himself as someone who promoted communal harmony and made films that reflected the social conditions of those times. Sunil Dutt became famous when he toured with his troupe called Ajanta Arts to the forward areas
It is no surprise that when we think of nepotism in family businesses in India we don’t think of steel, fertilizer, hosiery, cricket bats. We instantly think of Bollywood. Why do other businesses escape the stain of public contempt and Bollywood stands out as a shooting target for public disdain and anger? It wasn’t always so. Strangely the opposite was the rule in the early thirties and forties when Prithviraj Kapoor stormed Indian stage and films with his stellar performances and established the iconic ‘Kapoor’ brand and lineage. A newly independent India was looking for role models and what better than the lineage of talented and good looking Kapoor - Pathans from Peshawar. There was no one like Prithviraj during his heyday. Tall and strapping, he was the Indian version of a Greek god. Prithviraj chose his roles carefully and almost all symbolized nobility, decency, grandeur, heroism and sacrifice. These qualities struck a chord with a people who had shaken off British rule. They had witnessed some of these qualities in the freedom fighters and political leadership of the day. They were looking for a similar echo from personalities in the field of entertainment and the arts. Prithviraj Kapoor filled the gap and how. It could not have been a coincidence that the Kapoors who followed him were unique and different stylistically
The curse of family businesses in Bollywood By Juggi Bhasin
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“The Kapoor and Dutt brand names became synonymous with social consciousness and social conscience. It was associated with quality film making.”
Chimpu Kapoor who was given film after film merely because he happened to be Raj Kapoor’s son. Chimpu was a disaster as an actor, let alone a star. He had zero presence on and off the screen. The other actor who flattered to deceive was Rajendra Kumar’s son Kumar Gaurav. His first and last hit was his very first debut film lovingly made by his doting father. Kumar Gaurav acted in scores of films but he could never find any traction with the masses. He had to finally bow out of the system. The third and most controversial entry was Sunil Dutt’s son Sanjay Dutt. Sanjay Dutt’s life story is well documented but his entry into films highlighted the problem of nepotism in Bollywood as never before. All three star sons including Sanjay were no patch when compared with the acting acumen and social outreach instincts of their parents. As a matter of fact Sanjay Dutt was an advertisement what all that had gone wrong with Bollywood; its culture of excess and irresponsibility. The same public which had embraced their parents turned against these star sons. Be that is may the entry of
during the 1965 and 1971 conflict with Pakistan. He reached out to the armed forces and that greatly endeared him to the masses. The Kapoor and Dutt brand names became synonymous with social consciousness and social conscience. It was associated with quality film making. Nothing it seems could go wrong but they did. The seventies and eighties saw new socially divisive movements spread across the country. The mood of the people became sceptical and in many instances downright angry. An actor like Amitabh Bachchan who fit the bill of an ‘angry young man’ represented a changing, angry India. There were suddenly not too many takers for the Kapoor and the Dutt brand of clean, socially conscious cinema. The real severance of public faith from these venerable brand names occurred when the lineage that succeeded Shashi, Rishi Kapoor and Sunil Dutt was no patch on the elders. As a matter of fact they were not fit enough to be in the filmmaking business at all. Three names come to mind that exposed the rot in the system. The first was a nondescript actor called
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these three star sons opened the floodgates for more star sons to join the film business. It has come to a point where film fraternity is doublespeak for family fraternity when the only qualification to make it big in Bollywood is to be born into some of the big Bollywood families that control the film trade. This system is not unlike the mafiosi culture in which the distribution of all goods and services connected with filmmaking stays within the family. Top directors like Karan Johar never fail to serve as apologists for the system to plug in the importance and relevance of family dynamics in Bollywood. And that brings us to the question that was asked at the beginning of this article. Why do a large number of people resent nepotism in Bollywood but accept the same in other industries? So let’s understand this: Bollywood is in your face unlike any other industry. Nepotism in family business es is a given but even there family patriarchs are ushering in change by bringing in professionals to shake things over. The scions of business families armed with ideas they have picked up from Universities and workplaces from abroad are even more keen to professionalise traditional family businesses. Not so for the Bollywood brat pack. Why is that the case? For starters many of them are poorly educated and mere sophistication in dressing well, speaking fluent English is no compensation for astute business minds who can think beyond giving a single hit or a miss. The social conscience of the earlier generation is also missing. It had been replaced by so called high profile campaigns where it is evident to everyone that the star son or daughter have no heart in it but are going through the motions for publicity. But in the final analysis many of the star fathers really have to take the blame for this situation. They started their careers with a sense of purpose and responsibility. They genuinely cared for their connect with their audiences. But hey lost all sense of proportion when it came to setting up their children. The same Sunil Dutt - champion of a million causes, did not hesitate to produce an expensive debut film for his son to give him a break. That trend continues till this day. The public understands these contradictions very well. In the final analysis the public is the best arbiter of this debate. They eventually decide whether they prefer a Ranbir Kapoor or simply cannot tolerate a Kumar Gaurav.
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Juggi Bhasin is a best selling author of thrillers and crime fiction. He is also a former television journalist and a theatre actor.
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inception; orit may get too messy to handle later.
Keep these in mind to avoid financial instability in your Family Business
COMMUNICATE REGULARLY
“the possibility of finances spiralling out of control is a real threat. Even big business names like Mallya and Sahara have undergone financial instability with all plans going bust.”
Function like any standard organisation and schedule regular family meetings, team meets, etc. to discuss performances, responsibilities, and any financial concerns. Clear and open communication is the life blood of a family business, so prioritise this and ensure that every person is included irrespective of hierarchy. This way, all members get the chance to air views or fears that may create financial instability later, thus letting you nip things in the bud.
FAB Content Team
DO NOT IGNORE FINANCIAL RECORDS Author H. Jackson Brown, Jr. was right on point when he advised people to “Watch your finances like a hawk.” This could not be truer for family businesses. Many businesses have seen downfalls simply because of the lack of concrete financial data. Instead of trying to handle everything within the family, it is wise to bring in a qualified accountant who can manage the finances and provide advice on money matters. This also ensures clarity among family members without anybody feeling excluded or suspicious about the person making financial decisions.
SEPARATE BUSINESS AND PERSONAL FINANCES If family members pay for businessrelated needs out of their personal account, the company’s accounts may go haywire. Make solid rules to use only company money for business, while saving your personal finances as an emergency fund. This also helps you maintain clear financial records and safeguards you from liability during financial/legal trouble. Keeping the business as a separate financial entity minimises the risk of running into debt as you have a better track of the money.
Among the many challenges faced by family businesses in India, the possibility of finances spiralling out of control is a real threat. Even big business names like Mallya and Sahara
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have undergone financial instability with all plans going bust. However, this is not an inevitable prospect, simply keep these few things in mind to avoid financial instability.
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KEEP SALARIES OF FAMILY MEMBERS IN CHECK Emotions often rule supreme when it comes to dealing with family, and senior members tend to
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overcompensate relatives financially. This may be with the view of keeping them from seeking other opportunities or to simply motivate them to join the business, but if not
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planned well, this can hamper the company’s finances. Pay according to the industry standards and depending on the role every family member plays in the business right from the
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Knowing the workings of the industry you are in and being acapable manager is one thing; but if you are unable to track your business’s finances, you may be heading for disaster. So work smart and hire finance professionals to help you out right from the start. As they say, “A stitch in time saves nine.”
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Taha Coburn-Kutay, Chair UK Asian Business Council, speaks about his journey from India to the UK You are the Chairman of the UK Asian Business Council. Are there an differences between the Family Business Owners in Asia, in India and in the UK? Could you explain briefly? Being the Chairman of UK Asian Business Council I come across various kind of family run businesses and all over the world. Yes, there is definitely a difference between Family Business Owners in Asia, in India and in the UK. The traditional values of families differ in India, Asian and UK and this is the beginning of how business is conducted in these families. In my experience, UK based family businesses are very independent within the business and based on macro management of the family. Asian business families are a bit more traditional in their business approach and not so independent. It is a mix of macro and micro management of the family. Whereas Indian Family owners are very traditional and I have seen people are not independent at all. Every family member in the business is micro managed by the head of the family and the family members do not have the liberty of taking independent decisions even when they are heading companies within the business. Due to this reason Indian businesses do suffer because of lack of decision making in time.
the market at the right time and obviously they need lawyers and hence business for you is growing too.
The business environment in the UK is becoming challenging with the changes within Britain (Brexit) and even outside – America, France and other parts of Europe. How, in your opinion, are the Family Business Owners preparing themselves to handle this change? Family Businesses can see this as an opportunity because 52 commonwealth countries are now open for business including the Americas. I know a family business in UK which has won 5 Queen’s awards for exports to Europe and other parts of the world. But the issue was quotas which had to be fulfilled for Europe before you could move to other parts of the world. Now these businesses can go to more lucrative markets like Africa, Asia and South America before they go to Europe as these other markets are more printable in the business they do. Family businesses are opening more offices in these parts of the world to make sure they capture
His experience of 20 years in business spans across a number of geographical regions, including the UK, Europe, Asia and Africa.
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The Family Business is impacted greatly by the family culture. Do you see the Family Business Owners in the UK who have Indian origins keeping to the traditional family values or do you see them changing? Does it impact the way they run their businesses?
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The Family business owners especially the first generation is trying to keep these values but the younger generation is trying to break out of the traditions. The young have become professionals and they are not interested in running an old traditional business like a corner shop or a property business or a restaurant. This does impact the business because these businesses if not taken over the younger generation has to be sold off. Others see it as an opportunity to buy the business on the cheap as they know that there are problems in the business.
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Pre Nups and Post Nups are not part of the Indian tradition. However they are very much part of the society in the UK. Do you see the Indian families adapting themselves? If so how? If not, what are the safeguards they put in place instead of these legal documents? Some families are adopting these methods and some are not, it all depends on the traditional values of the family. Both men and women are successful today in UK and they want to safeguard their interests. I believe Pre Nups and Post Nups are very much a part of the high flying career oriented people whether men or women. It’s not seen as a taboo if these things are discussed pre or post marriage. I have even come across people throwing post-divorce parties in UK to celebrate their life as being married and having an amicable divorce. The families which are not adopting these methods do end in issues if there is a divorce. Wills do play a big part but even these are hardly seen being adopted by Indian families. I highly recommend that people look into all these methods of safeguarding their interests.
Taha, do take us through your own journey as you turned an entrepreneur in the UK from being a professional in India. Could you focus on the challenges you faced and how you overcome them. I started my life in UK as a Pizza Hut delivery driver because I wasn’t getting a job. Luck does knock on your door and it happened when an old friend from Amity referred my name to ICICI Bank UK in 2003. I got a job with ICICI Bank and then Citibank poached me. After three months of being with Citibank I realized banking wasn’t for me and I decided to take the plunge into business. I got a break with Prime Focus now India’s leading Post Production house and one of the biggest in the world. I was asked to head a division in Prime Focus but not as an employee but as an entrepreneur. I learnt everything in media from the word go and loved every moment of it. While I was at PF, I got involved in organizations like IndoBritish Trade Council and National Asian Business
“I believe Pre Nups and Post Nups are very much a part of the high flying career oriented people whether men or women”
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“70% of businesses are owned by families in the world. A lot of people do not know that some of the biggest companies in the world are family owned for the likes of the obvious ones like the Fords, TATA, Trump, Lodha, De Beers etc.”
Association working Pro Bono for increasing trade between India and UK. My life took another turn here and I decided to start my own Consulting company, Monkey Consulting. This might make your readers laugh and skeptical at the same time, why Monkey Consulting. It’s a name which will bring smile on the face of everyone who hears this name and will never forget this name because the second thought after the smile might be Monkey Business ;-), hence my company’s name. Also in my Pro Bono work I saw there was a gap in the market and I started UK Asian Business Council which today is recognized as force not just in Asia but in Africa too. In this journey I faced numerous challenges from suing companies for non-performance to being in front of the board explaining short coming in the business especially when the financial crisis hit the world in 2007. We had to introduce pay cuts and other measures had to be taken to keep the company afloat, these were very hard times. Legal documentation and employees taking us to court was the toughest thing we had to face. This was not an easy time. I had to once sue my great friend and colleague over nonpayment for 18 months. There are situations in life when your
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own turn foe and you have no other option but to take them to court for the reason they have given you to do so.
In general what is your view on family businesses and their place in world commerce. 70% of businesses are owned by families in the world. A lot of people do not know that some of the biggest companies in the world are family owned for the likes of the obvious ones like the Fords, TATA, Trump, Lodha, De Beers etc. I firmly believe that Family businesses will always exist in the world whether big or small. I have friend whose father manufactures herbal medicine and I asked him where is your factory. His reply was I’m the only employee of the company because our recipe of preparing these herbal medicine is secret which cannot be divulged out to other people. This is a very high end and successful business and at the same time it shows that these kind of family businesses will always exist and have a foot print in the world commerce. There will be several businesses like these in the world which are family owned and will always remain in the family because of the secrets they hold whether good or cheeky ;-)
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Balance of Power in a Family Business - Key facts
“The key is to approach it like you would with any business, and not prioritise family relations and emotions. Difficulties may arise where you find a younger sibling to have higher leadership and management capabilities than the elder one.”
In the Indian work sector, dynastic conglomerates can be said to be the norm rather than exceptions. This is also one of the oldest models of trade organisation, and history is proof of the success of such models. However, this kind of business setup has its unique set of challenges. When one is working with family, disagreements are a given. Egos often come into play butto achieve the goals of the organisation and grow as a business, an even distribution of power and responsibilities is vital. Here are some tips to do that:
FAB Content Team
REMEMBER THAT IT IS BUSINESS
PICK THE RIGHT PEOPLE FOR EVERY ROLE
Your family may own the company, but that does not make it different from any other organisation out there. The key is to approach it like you would with any business, and not prioritise family relations and emotions. Difficulties may arise where you find a younger sibling to have higher leadership and management capabilities than the elder one, and you need to leave aside the usual outlook of going by age and instead do what the business needs.
When assigning power to people in your family-business, it always pays to go by the interest and skills of the major stakeholders or other employees rather than their age, family relation, or their duration of involvement in the business. You will need to deal with conflict scenarios wherein family members feel they deserve a certain authoritative position, but it is not in line with their skill set. Allocating power to someone simply because they belong to the family can be demotivating to non-family employees, and harm the business in the future.
DO SUCCESSION PLANNING Succession in a family-owned business is almost a given, and it is best to start early while grooming a successor. Being proactive can ensure a smooth affair and a gradual learning of duties and understanding of the business. However, do not relinquish control all at once to avoid situations of power misuse. On the other hand, refrain from micromanaging by opting to control everything yourself. This can be demoralising and tiring to employees, thus taking a toll on productivity. Also, do not dismiss the possibility of an ‘outsider’ taking up a powerful position in the business, if circumstances so demand. This will ensure a among family members and other staff members, which creates a fair ground for all other employees. Let the long-term goals and the greater good of your conglomerate be the key factor when deciding on who should hold powerful positions rather than being sucked into succession politics. At the end of the day, that is what will keep your business alive and thriving. Like B.C. Forbes put it, “If you don’t drive your business, you will be driven out of business.”
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“Brand loyalty is tough to earn when the customer sees your product as generic and not unique. Plus the margins in a small order are too low to make business sense. Your idea should always be scalable. Biryani is a luxurious dish, and if you can serve it in all its delectable glory, you have a winner on your hands.”
A DELICIOUS SUCCESS STORY Our consulting Editor, Shubra Krishan, spoke to Vishal Jindal, Founder-Partner, Biryani by Kilo Vishal Jindal comes from a family that understands and loves business. His father and brother were together in Bharatiya Electronics Pvt. Ltd, a company they founded and nurtured together. Vishal’s wife Shalini, always a motivating and guiding force in his ventures, is now making her own foray into the health sector. I met Vishal and Shalini at their beautiful home in a leafy residential colony in Gurgaon. Shalini had just emerged from her morning yoga session, and spoke enthusiastically about her upcoming holistic health studio. Based on the time-tested principles of ayurveda, healthkarma studio (www.healthkarma.co) is an urban day retreat to be set amidst tranquil nature, that will offer healing & destressing therapies for the mind, body and soul. Her vision is to show the way to a lifestyle that is in rhythm with nature, towards wellbeing and a higher purpose. Vishal joined us soon after, and over refreshing glasses of buttermilk, we spoke about his journey toward Biryani by Kilo, a venture that has zoomed to success in a short space of time.
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“Kaushik had two decades of experience in over 200 restaurants, while my expertise is in scaling up. So ours was a perfect match.”
A Solid Grounding
My success mantra: Clear definition of roles, mutual respect & trust, Meritocracy
somewhere today, you might order another one from somewhere else tomorrow,” says Vishal. “Brand loyalty is tough to earn when the customer sees your product as generic and not unique. Plus the margins in a small order are too low to make business sense. Your idea should always be scalable. Biryani is a luxurious dish, and if you can serve it in all its delectable glory, you have a winner on your hands,” says Vishal. Well, he sure does! With a constant rating of 4.0 on Zomato, BBK has emerged as the fastest delivery chain in NCR with highest Average Order Value of around Rs 1000. Biryani By Kilo ((www.biryanibykilo.com) has its central kitchen and head office in Gurgaon. They have four operational kitchens in Gurgaon, Noida, Dwarka and Shapurjat. The capital can’t seem to get enough of their kebabs, kormas and phirni. Their technology platform is robust: 60% of the orders are received online. The company has notched up funding from a clutch of investors—BBK will be expanding more kitchens & Dine in Outlets in Delhi NCR this year, and next year in other major cities like Bangalore, Pune etc. Already, franchise offers from abroad have begun coming in. Within the next three to five years, BBK is looking at gross annual sales of Rs 200 to 400 crore. Ah, the delicious smell of success!
Vishal Jindal has more than 20 years of entrepreneurial and investing experience across different sectors and countries. Currently, he is the Director for Sky Gate Hospitality. He also mentors & invests in different startups. He was the Founder & Director of Carpediem Capital, an India based Private Equity Firm. He also built from scratch Bhartiya Electronics Pvt Ltd and Vectra Solutions Pte Ltd (Singapore), both IT companies involved in value added reselling and customized solutions to major OEMs, distributors and multinationals in Asia. He later moved to investing in his career as founder & director for Akshayam Capital Pte Ltd (Singapore), long/short hedge fund investing in Asian markets across different sectors. Vishal received a post graduate management degree from Syracuse University, New York and bachelors engineering degree from IIT- BHU, India.
Biryani by Kilo Only a few minutes into your conversation with Vishal, you realise how clearly his path has always been mapped out in his mind. A besotted food lover, he found the perfect partner in Kaushik Roy. “Kaushik had two decades of experience in over 200 restaurants, while my expertise is in scaling up. So ours was a perfect match,” says Vishal. They could have sold sandwiches and pizza, but zeroed in on biryani because it is a complete meal in itself, is very Indian, very filling, and boasts a uniqueness that western food sometimes lacks. “If you order a sandwich from
Rapid Fire What made Biryani by Kilo click? By investing in Cloud Kitchen delivery model, the brand promises to offer a consumer-friendly experience with good capital efficiency parameters, low wastage, unique concept of individual & fresh cooking. Practical success secrets for entrepreneurs? Make sure you lay the right foundation in terms of team, organizational culture, technology, marketing, operations. Also the founders must possess the vision and drive to make their brand comparable to the best in the world. One mistake you’ll never make again? Choosing a wrong business partner or a business one is not passionate. Most valuable life lesson learnt en route your entrepreneurial journey? Give out a lot, it always come back. Grit, focus, teamwork & kindness are most valuable for any successful & happy entrepreneurial journey.
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A Life of Dharma
“The soul of the nation resides in its villages.” — Mahatma Gandhi
By Gaurav Mehta
Gaurav Mehta is the Founder of Dharma Life, which aims to serve the needs of rural households through a socially affordable retail network. A graduate from London Business School, he is also the Managing Director of the Gajam Group GmbH, a private equity firm
been in Germany for five decades—we celebrated the 50th anniversary of the family business this year! Back in those times, my grandmother would make the clothes for the family herself. One fine day she walked past
I grew up in Germany. My grandfather used to be in the foreign service, and when he moved there, my grandmother started a fashion business. Initially we were based in Frankfurt, then moved to Dusseldorf. We have
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one of the department stores in Germany, and they were selling silk cushions. She said “I can make that,” and asked one of the department stores if they would like to buy something like that. They said “Absolutely,” and gave her an order. Multiple orders followed! My grandmother slowly got her siblings and other family members in India to make cushions and we began importing them into Germany. Most of our family had moved to India from Sialkot after partition, between Ludhiana and Delhi. Thanks to this enterprise, they started their manufacturing unit, and soon moved from cushions to blouses to young fashion and other clothing. So basically, my grandmother is the entrepreneur, who started everything. My mother is a medical doctor, but she too was part of this business from the beginning, along with her younger sisters and younger brother. While I was involved with the family business from an early age, I always wanted to make a difference. My dream came true in the form of my company ‘Dharma Life.’ I went to London Business School in August 2008. All along, my objective was to find something that aligned with my ideas. One of these was how to alleviate poverty. I formed the idea for Dharma Life with a couple of my classmates in the MBA, and Ankit Agarwal, my classmate from undergrad. At Pratham, an NGO I had worked with, we had created 100,000 volunteers. Of these, only 10% were paid. The question was, “Can we find a way to create a livelihood for them?” Pratham was partnering with different corporates, who provided content and curriculum which we used to train the youth with in the villages. With the certification of the corporates, we were able to place them in the industry. But that still required everyone to move, so we began thinking of ways to create livelihood in the village itself. I had done a project on direct insurance sales. That model is fairly entrepreneurial for people, allowing them to work at leisure, while also being very incentive-driven. Our idea was to apply this to the rural areas and create jobs through that. On my very first day of the MBA, our study group went out for a drink and we talked about our objectives. When I shared mine, the whole group supported it and we started working on the idea together. At London Business School, we had a course called “Discovering Entrepreneurial Opportunities (DEO).” There, we came up with the idea of solar lighting, because during our campaigns, we realised that lighting and energy were a huge issue.
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We had two engineers on that team, who designed a solar light. The idea was not the product, but the sales force. We won that competition. The group grew to make six of us. We went to different classes, won a few competitions on the way and then finally in the summer of 2009, Ankit and I travelled across India, going to the field and researching how we could bring our ideas to fruition. The class required us to do research but we ended up doing a pilot! We recruited about 100 entrepreneurs, and by the end of September, the other four also came to India and we trained the first batch of entrepreneurs and started the sales model. We did the legal structuring, which was very complicated—partly because we came from outside. But we had excellent support from legal experts, who helped us design the complete framework of the wholesale cash-carry entity. Once that was through, we launched. Dharma Life works towards improving the quality of life in rural India through socially relevant products and services. For a while now, I have focused all my time on this, and the family has completely supported it. Interestingly, I am now getting back in touch with the family business to an extent. Earlier, we were selling to the village areas, but now we are buying—we plan to set up a fashion line, preserving rural art forms. Now Dharma Life has grown to about 11,000 entrepreneurs and we cover about 35,000 villages across 12 states. So now we have a reach where we can look at procuring other things, and have started with four to five different art forms. There’s Madhubani Art, Bhagalpur Silk, different things from UP and Rajasthan, among others. We’re designing a scarf collection, too. So that’s taken us back to the family business of fashion. The toughest part in running a family business is to keep everyone together. My grandmother did that beautifully, without formally defining individual roles. With time, generation gaps widen. In our own family, we have nine grandchildren and each one is going their separate way. That is bound to happen. Mind-sets and values change with time, and a mature family business understands this. I have been part of the family business in both phases—back when everything was cohesive, and now when things are changing. I would say the demands of a family business are much more challenging in these times. My grandfather’s family was all school teachers. My granduncle used to run a DPS and when he retired, we set up a charitable school in Gurgaon. So, another stream of the family business is already running in succession.
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Gunshots, Litigation and Heartbreak - How To Avoid Disputes In Family Businesses By Rosalyn Breedy, Partner, Wedlake Bell
The following article about some vexed issues around family business disputes comes from Rosalyn Breedy, corporate and financial services partner at Wedlake Bell. The issues she raises in this article have global significance so we hope readers across the regions this news service serves will find this item stimulating. As always, readers are invited to respond with their own views. The death last November of Huang Jung- tu, Taiwanese founder of Mayfull’s Food corporation $3 billion meat importing and hotel business, tragically resulted in a bitter dispute between his six sons over dividing the business empire. The dispute ended desperately last week in a bloody board room shootout with fourth son Huang Ming- te shooting dead two of his brothers and then himself. The tragic Mayfull story demonstrates the passions that can arise if founders of substantive family businesses fail to successfully plan and communicate their intentions for the family and the business. Founders of family businesses need to spend critical time and resources on creating a strategic plan which finds a delicate balance between funding the business’s ongoing operations, providing for the financial and emotional needs of family members as well as preserving and fairly distributing wealth for future generations. The strategic plan for a family business needs to consider all angles. The founder will naturally be concerned to ensure the continued success of the business. The heir apparent may not always be the best qualified or most appropriate successor to run the company. If there is no obvious successor, how can this be addressed over the next few years. Is there a family member whose skills can be developed? Or is it time to start looking outside the family?
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Family structures are infinitely more complicated now, with multiple marriages and with them blended families complicating the situation further. How do you provide for family members who do not play an active role in the business? What do you do in the event of a divorce, a second or third marriage when there are implications for the business? Disputes can arise when families help their offspring start companies without proper contracts. This is often done informally and can come back to haunt the business later, particularly if financial returns exceed expectations. Fashion footwear entrepreneur Tamara Mellon famously had to sue her mother for the return of shares after they were transferred to the wrong family vehicle. In structuring a family company, all these factors need to be considered in addition to the usual financial and legal considerations. The advisors need to be alert to family politics and the role that it plays. A family office is one of the most effective vehicles for preserving significant wealth and with careful governance; its strategy can be formulated to meet the needs of all concerned. This might include providing for philanthropic activities as the entrepreneur
The younger generation will have their own views about whether or not they wish to join the family firm and in what capacity. Should all family members be given the opportunity to join the family business? Or is it a good idea to insist that they get a certain number of years’ experience elsewhere before they can join? There may be challenging dynamics between the young pretenders. Can sibling rivalry be harnessed for the benefit of the business rather than becoming a destructive force? Do they fit within the mould of the current business, or would it be prudent to give them their head in a new subsidiary?
Brand traps One area that is often ignored, and can cause problems is the use of the family name particularly where this is synonymous with the company brand. If the brand name is valuable intellectual property then steps must be taken to protect it adequately and ensure that its use is controlled in any new venture. When Virginie Taittinger went solo to launch her own champagne marque “Virginie T” she was careful not to infringe the Taittinger brand of the family champagne business where she learnt her craft.
“One of the big challenges is that a family changes all the time, as new members are born or join via marriage and relationships change alongside the evolution of the business.”
considers their lasting legacy. It will also shield wealth from being raided in the event of divorce amongst younger generations.
Budgets Key decisions will be required regarding the distribution of money and investment strategies. How much should each generation live on? It is important to have a trusted advisor who will help the family to fairly determine values, objectives for the business and the family by using a process to elicit clear communication, deal with difficult issues and act as a counter balance to the power dynamic and hierarchy. Once the strategy has been outlined, the legal pathways can be determined to achieve goals. Many of these are familiar such as the will, trust, a letters of wishes, power of attorney, a prenuptial (or postnuptial) agreement and family investment vehicles. All are essential in planning for the entrepreneur’s personal estate. To secure the longevity of the business, attention needs to be given to business plans, transparent financial reporting, constitutions, employment contracts to separate business and family roles, business governance, use of company or partnership structures, trusts and possibly creation of a foundation to achieve philanthropic goals. One of the big challenges is that a family changes all the time, as new members are born or join via marriage and relationships change alongside the evolution of the business. A modular approach is advocated to ensure flexibility is built in and can adapt if the environment and family needs changes. Succession is a key concern the world over. The tools exist. Families can avoid litigation and heartbreak by using them, planning strategically, engaging properly with their family members and putting in place correct governance. Family-owned enterprises account for more than 30 per cent of all companies with sales in excess of $1 billion and are key contributors to the global economy. All parties involved benefit if they can help families get it right. This article is reproduced with the permission of Clear View Financial Media Ltd, publishers of WealthBriefing (www.wealthbriefing.com).
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Rosalyn Breedy, Partner, Wedlake Bell, Corporate and Financial Services
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K eep your Family Business insulated from Family Feuds
“Making things like job responsibilities, decision-making, etc. clear, and preferably written down in a formal manner will help every person stick to performing their duties even at times when you may agree to disagree over certain matters.”
FAB Content Team
Take a look at any Indian trade, right from roadside establishments to huge business enterprises, and you will find that family businesses are ubiquitous. While there are several benefits to being involved in a family-owned business, there are bound to be disagreements when there are different members and opinions at play. News about family feuds often make headlines, but for those in a business a minor spat may snowball into a threat to the enterprise built over decades of hard work. So here are some ways in which you can minimise the impact of your family feud on the business:
these rules and ensure that every one is on the same page to avoid unnecessary confrontation in an already volatile situation.
MAKE CONTINGENCY PLANS After a spat in the family, members may not want to resume work immediately. While taking time off can help you heal, you need to see to it that such absence does not hamper the business. Create reserves and hire consultants from outside to compensate for work when a certain family member is unwilling to cooperate or attend work. This will also introduce someone with a neutral viewpoint, who can advise you to pick the best path for the business, irrespective of any differences.
DO NOT MIX EMOTIONS WITH WORK True, it is easier said than done; but one of the most effective ways to not let your family spat harm the business is to keep the argument and work separate. You may have a problem in sharing the same dinner table at home with a feuding family member. But when at work, treat each other as colleagues, and keep all emotions aside for the time. Focus on performing your role in the business to your best potential rather than snubbing somebody, to ensure that the internal war does not spill over and damage a wellestablished company.
KEEP COMMUNICATION FLOWING You may not feel like having a heartto-heart chat with a sibling or another family member after a big dispute, but you need to decide whether you are okay with overlooking this for the sake of your business. And for that, it is paramount that you keep communication lines open. You do not need to talk about work at home, but have regular meetings to identify long-term goals of the establishment and the best ways to get there. Spats within a family in business together can often get ugly, with lawsuits being filed to other issues. But what is important is to remember that all of you have worked together to get your venture where it is today, and no one would want to see everything destroyed because of a disagreement.
LAY OUT CLEAR RULES ON RESPONSIBILITIES Making things like job responsibilities, decision-making, etc. clear, and preferably written down in a formal manner will help every person stick to performing their duties even at times when you may agree to disagree over certain matters. Hold a family council about
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Do Startups Need to Worry About Succession Planning? By Vikram Upadhyaya - Chief Mentor at GHV Accerlerato
Why is it that we don’t see too many businesses talk of or focus on succession planning in spite of the fact that finding the right successor can be an arduous and time consuming process and has a direct impact on the longevity of the business? There is no dearth of examples of succession planning gone wrong even at renowned corporate across the globe. Though the ‘biggies’ are more or less able to withstand the brunt in such cases, for startups, a wrong decision on this front, could even prove fatal. Not too long back, Infosys went through a period of turmoil on this account. Narayan Murthy, who had stepped down as Chairman in 2011, had to rejoin in 2013 to put the house in order, in spite of a handpicked successor. Such incidents are a clarion call for all businesses, including
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startups, to seriously start thinking of a succession plan for key leadership positions. Well, you may think startups are too young to be thinking of succession plans. But if you look at it the other way, every person, especially at a leadership position, plays a key role in defining the fate of the startup. With limited people and resources at hand to accomplish that ‘big dream’, even one person moving out of the startup, irrespective of the reason, can jeopardize its future since others already have their hands full, and therefore, may not be able to justice to the role, if assigned the responsibility. As a result, even their current responsibilities may suffer. Moreover, hiring and training another person for the job can take time. So, the longer it takes to fill up that position with the right person, the greater the damage to the startup. Startups usually have a flat organizational structure. So, any exit of people at key positions can have a big impact on the running of the business. There is no guarantee that the current set of managers or skilled technical people will always remain till the end or may not have an approaching
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It requires a great deal of foresight and planning to identify the strategic core areas or positions where successors need to be groomed, so they can step up when the time is right, and deliver. A key aspect that is often missed when filling up that key position is the vision alignment and cultural fitment of the candidate. While it may not have any immediate impact on the successor being hired for the job and the company, in the long run it can turn out to be the bone of contentment between the two, since their ideologies and vision for the company may differ. It is of paramount importance that the successor is aligned with the company’s vision, because this is the most vital parameter that’ll bind him with the startup and other stakeholders in the company. Moreover, just like any other relationship, it is important that there is a basic level of understanding and respect between the successors and the promoter/founder(s) of the startup, so its smooth sailing for everyone – the startup and all the stakeholders – in the long run.
retirement age. Succession planning, to a large extent, can help in assuring the future of the company and ensure that the right people are able to fill the shoes which got it so far. Without a succession plan there, the startup will end up functioning like a ship without a captain, thus leading to utter confusion and chaos. There will be no clear goals to bind people and synergize their efforts. As a result, people will be dissatisfied and attrition will increase. And that’ll further add to the pressure on the people working there, and the same cycle of dissatisfaction and more attrition will follow. Whether the founder wants to take the startup all the way or chooses an exit, either way it is good for a startup to have an internal replacement process. It should identify the key people to take on leadership roles and train them in advance in order to fill in the gaps without disturbing the momentum and continuity of the business, when the need arises. The process of succession planning starts many years in advance and involves recruitment, career development and training of the potential successors.
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To begin with, a risk assessment study needs to be done, so critical roles in the organisation can be identified. Once this is done, a profiling of the key competencies for the key positions in the organisation needs to be outlined. These key competencies should outline the requirements in terms of educational qualification, behavioural and technical level of competence of the individuals to successfully perform their roles. The likely successors should have these basic skills and competencies identified for the role. Moreover, they should have proved their prowess at handling similar roles and responsibilities in the past. It is also necessary to have a formal strategy which will motivate staff into eagerly accepting new challenges and keep them interested in learning new skills. Having well defined career paths at the outset will help a startup recruit good talent and retain them in the future.
The key to a good succession plan is that it needs to be proactive with a clearly charted course. It should also put the key successor through all the possible areas of competency in an organisation before he/she is actually required to take up the position. The successor should also have the time to take up all the key opportunities which come up in a company’s journey, add to their qualifications or have new experiences. This is also a good way to ensure your key personnel are fully integrated into the common goals and are completely aligned with your startup’s business plan.Also remember, to properly train a successor, years grooming is required. The succession planning process is only a litmus test to check whether this chosen individual is the right choice and can cope up with the new challenges that the role will bring with it.
Conclusion While you will certainly look to bring in a candidate with the right hard skills for the job, it is important not to overlook the softer aspects such as cultural fitment, shared vision and values, since more often than not, the failure of a succession plan stems from these seemingly irrelevant aspects. Such is the importance of a succession plan for businesses that since 2014, SEBI has been pondering over bringing in a regulation for listed companies to make it mandatory to have a succession plan. It is not long before investors wake up to this critical aspect while evaluating a startup before funding.
Vikram Upadhyaya, Chief Mentor, GHV Accelerator
“The key to a good succession plan is that it needs to be proactive with a clearly charted course. It should also put the key successor through all the possible areas of competency in an organisation before he/she is actually required to take up the position.”
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All Things Luxury
The Finer Things in Life
How would you define All Things Luxury?
have an appreciation for luxury in the sense of refinement. Acquiring a sense of “luxury” means the ability to have an understanding and appreciation for the finer things in life. Good taste and an esthetic appreciation are qualities which ones develop over time. Acquiring a sense of luxury has to do with education, exposure to and appreciation of the finer things in life. For me the meaning of appreciation is essential as it shows that one has a deeper understanding of how the object has been materialized: the aging of vintage whisky in aged wooden barrels, carefully manipulated by local artisans based on established century old family traditions. Luxury must be sought out; one must make the conscious choice to discover quality and enjoy it.
The first things which come to mind are: Rarity, exceptional, refinement, craftsmanship, tailor-made and quality Luxury does not need necessarily to be a tangible object. Luxury can also be a state of mind, the ability to have the time and enjoy a moment of tranquility away from the day to day hassle. Common misconception is that Luxury has to be expensive as for me ultimate luxury is total independence of any constraints, the enjoyment of the best in life whenever I chose.
By Alain Mestat
How does “Luxury” fit into the life style of the rich and famous? For many successful individuals Luxury has become a way of life due to the ability to afford the “finer” things in life. The “finer” things in life are often equated to items, which tend to be more exclusive and therefore more expensive. Being rich and famous provides you with great privileges and easier access to various opportunities. For individuals who are famous, luxury sometimes is the only way to provide protection and to shield oneself from unwanted attention. Substantial financial means allows you to take advantage of travel and experience new ways.
Family Business Owners have the ability to buy all things luxury. As an expert in All Things Lux, what advice would you give them about buying objects of fine art? The temptation is high to acquire luxury objects at any cost in order to confirm your status within society. The same lays true for art & collectables. Substantial financial means may provide you with the opportunity to acquire expensive items, which actually may not have more value than the enhancement and maintenance of your status. Before acquiring art & collectables you should spend some time researching and educating yourself about the vast range of existing possibilities: paintings, photography, ancient crafts, collectible cars, vintage wines, jewelry.
Family Business Owners are certainly rich. How can they also acquire the sense of ‘luxury’ if they don’t have it already? Being “rich” does not necessarily mean that you instantly
“For individuals who are famous, luxury sometimes is the only way to provide protection and to shield oneself from unwanted attention.”
Alain Mestat is the Managing Partner at PassionProtect® & Luxinvest Securities and a Certified Independent Director. He is also the President LAFA - Luxembourg Art and Finance Association
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“Education is the most important element in order for younger generations to be made aware of the richness of their cultural heritage.”
The Latest Bestseller by Juggi Bhasin
Amongst these diverse categories there will be one or several which will stand out, which your mind, your sense of taste will be attracted to: a painting for contemplation, a photography for memories, a classic automobile for thrills, vintage wines for the taste and jewelry for the emotions. Once you have made this initial selection you should spend some time with experts in the field who will further educate you. Once you have started collecting, this will become a passion, which will never leave you, an ongoing educational process, which will continue to challenge you.
Wealthy families typically have heirlooms passed down from One generation to the next. How can the younger generations be made more aware of the richness in their inheritance? Education is the most important element in order for younger generations to be made aware of the richness of their cultural heritage. Part of the educational process is the ability to be exposed not only to the depth of their own culture but also gaining exposure to other cultures. For me the ability to travel extensively has been one of the great luxuries of my life.
Buy your copy today!
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E ffective Decision making is a key to success in a Family Business
“It’s not hard to make decisions when you know what your values are.” - Roy E. Disney
FAB Content Team Family businesses all over the world have similar processes in place, but in the Indian context people often assign hierarchy based on seniority. While this may work for your personal life, the rules of business need to strictly outlined to get the best outcome. When multiple family members are involved in a business, it is vital to establish an effective decision-making system. Here are a few tips on how you can implement such a system for your business:
ESTABLISH A CLEAR VISION Start with a family meeting, held in an office space rather than in a domestic setting, in which clear goals, vision, and mission for the business are laid bare. Doing so ensures that each family member has a strong understanding of the fundamentals, the hierarchy, different aspects of the business, and so on. Mutual agreement will help build a foundation of trust as well, and lay down the rules of a decisionmaking system when matters such as inheritance, shares, strategies, etc. come up.
DEFINE ROLES When it comes to governance and decision-making structures, assigning specific roles and responsibilities to those involved helps set a clear structure. This way, there is lesser chance of all family members jumping in to handle the same problem instead of focusing on their particular areas to help the business run smoothly. Also, remember that while unilateral management and decision-making may have helped you when you first started, things will
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change as more people get on board. Hence, it is better to segregate departments/areas of the business and let the appropriately qualified or inclined people supervise.
HAVE A VOTING SYSTEM When decisions need to be taken, hear what the family member in charge of that division has to say, and let him/her explain the entire scenario to the other members in a meeting. Once everyone is on the same page, voting can be held to get a consensus on the best possible strategy for the purpose. Such periodic meetings will get all members up-to-date on different aspects of the business, while also letting you take decisions early on to avoid hassles. However, set a voting eligibility—decide whether you wish to include non-family staff, extended family members like spouses, etc. or stick to a smaller council with just the family.
HAVE A BOARD IN PLACE As the business grows, it is important to have a board of advisors/directors in place to help the family take effective decisions. This board can include elected representatives of the family, experts, legal professionals, and senior executives who are not family members. Democratic and consensus decision-making, along with the advice of qualified professionals, are often the best approaches to an effective decision-making system in family businesses. This ensures that every person is heard, while also helping in reaching conclusions that are in the best interests of the company and its people.
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Do what You Say and Say what You Do
“Aubrey Rebello is a Mentor & Coach to several Business Families. He is an Engineer (IIT Bombay) & Gold Medallist MBA from IIM Ahmadabad. Aubrey brings with him 40 years of Corporate experience as Director / CEO / Business Head with Tatas and Bayer.”
By Aubrey Rebello
Sometimes there is intense pressure from customers or from the “Family Patriach “ to commit delivery in a shorter time span. To get out of pressure situation some people commit to a time which they are unsure about. This should be avoided. It is better to bear the unpleasantness now and meet your committed dates. While Customers are not always expected to listen, Management should listen and give in where the explanation for more time is reasonable. After all just like no baby can be delivered before 9 months some tasks may require more time than demanded. With regular persuasion it will take 3 to 6 months for the Work Ethic to be part of a Team’s DNA. It is high time everyone in our country, embeds this work ethic in our Work & Personal Lives & in our Polity & Government. I believe that this is one of the lowest hanging fruits we need to pluck to make our Country Great Besides productivity, response time and customer satisfaction improvements, the biggest takeaway would be ‘dependability’. Everything that’s committed is delivered and occasional delays are communicated well in time. For any Organisation and Government this would be a breakthrough step. We must practice this work ethic in our Families, in Business, Government and at Work Place because “Dependability” is always cherished.
Gradually with better analysis of all factors that impact the outcome, slippage from committed dates should reduce. Any slippage, then, can only be due to dependencies on which you have no control or cannot be factored in accurately.
completed and balance 2 will be completed in 3 days. In India most of us “Do not Do what we Say and we do not Say (precisely) what we do.” We have a “Chalta Hai” Attitude. With this work ethic, to get anything done requires follow-up. We can never be sure of committed dates and the start of dependent subsequent activities! End result is delays, reviews and meetings, phone calls, mails and disappointment. Imagine how it will be if everyone follows “Do what You Say and Say what You Do” This work ethic will require that commitments are given after all aspects and dependencies of task completion are factored, and every effort is made to meet committed dates. Start with simple things like being on time for a meeting. If committed dates cannot be met it should be conveyed before the due date with reasons and a new date given.
Business Owners, CEOs, and even our PM work long hours; but are still not able to complete all they had targeted and this leads to poor results and frustration. Prioritising and planning are obvious areas they need to work on to give better results. I have however found that one simple work ethic can bring remarkable results. I call this, “Do What You Say and Say What You Do” Sounds very simple but what is the reality? When someone is late for a meeting you get a call “I will be there in 2 minutes.” How precise? In reality it could mean anything from 10, 15 minutes to even 30 minutes. ‘A Task will be completed in 10 days’ is generally not completed by due date. When delayed, there is rarely a delay indication with reasons and new completion date. Sometimes ‘Task Completed’ may not mean full completion. For example, only 5 out of 7 items in the task are complete. Rarely will someone say only 5 out of 7 items
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Few Benefits that will happen with this work ethic are: • Follow-up activity will reduce. • Future tasks based on completion of previous task can be planned and scheduled better and projects completed earlier • Meetings and reviews will be shorter and crisper. • Increase in Productivity and Customer Satisfaction. This Work Ethic does not require anyone to work beyond his or her level of capability and improves a team dynamic because it only requires commitment to completion dates, timeliness and preciseness in communication. It can therefore be practiced by everybody: by the Expert, by the non Expert, by the “A” Graded Team members as well as the” C” graded Team members. Old habits die hard, and a Team Leader should explain the work ethic to his Team and regularly review whether the new work ethic is followed or not. The approach has to be top down with Leaders following the work ethic first.
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Getting Ready for the Rapid Growth of your Family Business? Here is how to handle it FAB Content Team
internal systems are running efficiently, and reduce unnecessary overhead costs.
invest in suitable training, technology, and people to keep your customers loyal.
DO NOT FORGET THE CUSTOMER
DON’T GET SWAYED BY WRONG POTENTIAL FUNDING
It is easy to get caught up in the speed of growth and start falling shorton providing good customer experience, but remember that there are enough alternatives out there for people to find a better product or service today. The best of brands in India have seen sudden downfalls and even closure because of such mistakes. Make a positive customer experience the topmost priority, and
As any business undergoes rapid growth, investors and potential acquirers will be queuing up at your doorstep to join hands with you. But it is important for all members of the family to not get taken in by relations, friendships, or the temptation of immediate money. Think long term, and consider only those who share the same belief and goals for the business as potential partners.
TAKE TIME OUT One of the happiest moments for entrepreneurs is to see their hard work paying off in terms of growth and success of the business. While it seems that there can be no flipside to this, the fact is that rapid growth can bring its own set of challenges. So what do you do in such a scenario? Rather than waiting for time to take its course, here are some factors to keep in mind tonot let accelerated success take a toll on your business:
FOCUS ON YOUR PEOPLE Rapid growth for your business means that you need to expand your staff as well, but it is paramount that you build the right team to keep the momentum going rather than opting for unqualified family members. Develop a strict screening process and hire people who can contribute to the business while also fitting
Quick expansion and success in a business can be a whirlwind affair full of new responsibilities, but remember that the future growth of the company depends on your well-being. So ensure that all family members involved in the business get to take adequate breaks to avoid undue stress.
in with the general culture.At the same time, ensure that the existing employees are well cared for and motivated. If need be, make changes like removing people and processes that may slow the business down.
WATCH YOUR FINANCES Rapid growth in a business can tempt owners to overspend. So consider the financial implications of every move and ensure that you maintain a balance at all times. Ask questions like “how scalable is the business model?” Sit down with the family to take a look at the financial situation, and chalk out a plan that allows you to invest in the right resources and tools to keep the business growing. Keep an eye on the numbers, find out which products bring in the maximum capital gain, ensure that the
“Trouble results when the speed of growth exceeds the speed of nurturing human resources. To use the analogy of growth rings in a tree, when unusually rapid growth caused the rings to grow abnormally thick, the tree trunk weakens and is easily broken.” - Akio Toyoda
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THE CASE STUDY Challenge was organised by FABFamilies And Business and NDIM – New Delhi Institute of Management. It was the first of its kind in India and saw an enthusiastic participation from students. The students were asked to identify a Family Business of annual turnover up to Rs. 10 crore. The students then were asked to spend time with the Family Business Owner and do an in-depth study of a family related matter that affected the Family Business either positively or negatively. Students then wrote a case study and submitted it online. The Challenge received over 500 submissions from students. There were two rounds of shortlistings based on the written material. In December 2016, a panel of internal and external jury members heard the Case Studies presented by 35 Semi Finalists. Based on the presentations which included questions and answers the jury chose 12 Finalists. In February 2017 the Finalists presented their case study in front of an External eminent jury. There were intense questions and answers and debates and discussions during the day between the student, the jury members and the select audience. After deliberations the 2 runner ups and the Final Winner was chosen and declared by the jury members. Cash Awards of INR 40,000 were given to the winning teams. Trophies and Order of Merit were also handed to the young winners. The chairman of NDIM, Mr. Bansal was an active participant in the proceedings of the day. He gave away the awards and trophies. Ms. Sonu Bhasin, Founder and Managing Partner of FAB explained the relevance of Family Businesses to the audience. The students said that they found the entire exercise of researching the links between family dynamics and the family business interesting. They also said that they learned a lot during their interactions – a lot of which they would have never learnt in the class room. A Handbook of Family Business Case Studies will be launched in June 2017.
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