Success is a Process, which should be designed / aligned with professional’s expertise, To Minimize risk & uncertainties
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Change Before It Is Necessary To Change.




Business Start-up Decision are crucial & 40 % Business Fail in First 3 Yrs. after start up.

To evaluate Business Process from Start-up Stage to On-going Business Process for Small & Mid-Sized Co. where there are lack of Managerial Skills within Organization, must know about Risk & Opportunities. Business planning and execution; considering all the factors influencing the quality of Business is not an easy task. It requires rigorous planning to be done to ensure a smooth work flow and execute the project. Consulting offers integrated consulting services that help companies ease the pressure of execution in terms of cost, man power, materials, time, safety and other related issues.


Family Run Business Control > 90%, ignorant of Invisible Corporate Value / Process, No succession Plan, Restricting Growth & opportunity.

  • Family Value
  • Organizational Value
  • Professionals Value
  • Conflict Management Process

Need of Organization: Restructuring, Organization Development or Transformation depending on how much Organization is prepared to accept the process of Change Management, Succession Planning.


Professionals often face problems at their work due to lack of communication. Training on communication – the ways and means, with proper knowledge and information flow will help employees perform better at their work and ease the knowledge and information flow between the teams and the functional departments in the organization.




Having started and run over 40 businesses (including a couple of failures), I know from personal experience that successfully making this transition is difficult and challenging. However, the reward (in terms of unleashed business growth) is far greater than the challenge.

There are four key issues that typically occur when family run businesses make (or try to make) the transition to being a professionally managed organization:


While some founder/owners move seamlessly from the founder/owner management model to the Management team’ model, most struggle with this transition. This is understandable – it requires a different style of management (specifically, trusting process, rather than trusting your gut). Many founder/owners cannot make this transition, finding themselves repeatedly bypassing their own systems and overriding decisions made based on process.

When an owner does this repeatedly, someone needs to be brave enough to suggest that external management may be necessary to take the business to the next level. Many founder owners are reluctant to consider any such thing. Those who do reach to superior level of respect ,recognition & wealth.


When an owner of an organization of any size *does* step back to let someone else take control, it is often very difficult to allow power & authority move from him / them to others. Most will reserve substantial power to themselves by appointing themselves chairman/ MD / Director / CEO , by creating a special position for themselves, or simply by hovering around, micromanaging the new manager and second-guessing his or her decisions.

The bottom line is this: If the founder/owner remains involved in the business in any capacity, they will in the majority of cases eventually try to wrestle back control. This is, after all, their baby (even if all grown up), and it’s hard to see someone else act like they are the parent!


Besides There is a fear on the part of the founder/owner that the organization will lose its entrepreneurial edge. This ‘edge’ is brought by the family member(s) who oversaw the birth and growth of the business. Because they could (and often did) ‘bet the house’ to get the business where it is now, the ‘sidelined’ founder/owner’ feels building frustration at what she sees as bureaucratic systems and processes brought in by a professional management team.


If the changing risk profile doesn’t frustrate the founder/owner into ‘jumping back in’, the next challenge is accepting a change in the culture of the organization.
From birth through to this stage in it’s existence, the organizational culture has been heavily influenced – if nor dictated by – by the family owner.

As the owners begin to step back, it can start to feel that the organization is changing, in their view, almost certainly for the worse. A key sign of this is talk in the corridors of “how it used to be” and “the good old days”. This is usually accompanied by the exit of a number of employees, particularly those who have been around from the early days, and who are very loyal to the family.

In a panic, the founder/owner can be tempted to step back in to return the business to ‘what it used to be’ – forgetting that the whole point of the transition was to make it something it didn’t ‘use to be’!

Given that these are frequent responses by founder/owners when transitioning to professional management, there are a number of measures they can take can do to smooth the process:


If the founder/owner is going to continue to be involved in the organization after appointing an external manager, it should be in an advisory position – not one that will give them direct functional control.

This position (whatever it is called) should allow the founder/owner to continue to inject their entrepreneurial spirit and maintain a strong culture – the two biggest strengths they can bring to the newly managed business. Placing the founder/owner in such a position will also help minimize the exit of disaffected key employees.

A great example of doing this is to watch the transition process between Bill Gates (essentially the founder/owner of Microsoft) and Steve Ballmer (essentially the ‘professional manager’). One thing Gates did really well was to clearly define his new role(s) as he handed over power to Ballmer, and he made sure he stayed within those boundaries, allowing Ballmer to bring his own style and culture to the business. In India Examples are like Godrej , Bajaj, Murugappa , Adani, K.M Birala , Marico , Reliance Etc.


The key to any change within an organization is communication, and the transition to professional management is no different – in fact, it is even more important here than at any other time in the organization’s development.

Employees should be made aware of what is happening, and why it is happening at each stage of the process, and there must be a mechanism whereby they can voice their concerns. A ‘town hall’ meeting with both the founder/owner group and the professional management team is a great example – such a forum affirms to employees their position and value within the company, helps to align the employees with the goals of the management change and minimizes gossip and confusion.


In This Process , You will find Professionals will join & accept Challenges on your behalf . They will be target of all set of Old Culture to be exited.

Among Professionals , Respect & Recognition with Reward are three important factors which can specially motivate to offer company to reach stage of Transformation. These Professionals should be Respected with reward based on degree of experience & Qualifications. Pl . Never judge Professionals on their approach & affiliation, they should be evaluated based on Diversity & understanding Corporate trend & what they look for your Co. or how they help to make your Company more Visionary.


For the transition to professional management to succeed, it is crucial to stick with the process once begun. When things get tough (the risk profile changes, or the culture seems to be dissolving) it is very easy to want to simply return to the old days. The founder/owner, or the board of directors, or the shareholders, can lose their nerve and bring the founder/owner back in, leaving the business ‘stuck’ in a no-mans-land of past glories and present-day ineffectiveness.

The process needs to be completed, no matter how hard or painful it is.

If founder/owners and the new management team stick to their guns, communicate clearly, and retain the advice of the founders (without them having operational responsibility), they will make huge step to transition successfully from a family owned to a professionally run business.


Once you take decision & become Successful, There will be Change in your Corporate Image which will lead better respect by Employee , Industry & Investor.



Succession to leadership is common to any organisation, a professionally-run or a family-run company, and other organisations. Succession issues are more pronounced in a family-owned and family-run company because the promoter holding 100% or a majority stake may want his son or daughter to succeed him as a birth-right or his children may think that they have a birthright to succeed him.

In the past, we have witnessed succession issues even amongst kings. For example, we have seen diametrically opposite succession issues in our epics Ramayana and Mahabharata.

Majority of the private sector listed companies in India are family-owned and family-run companies.

According to an empirical study conducted in 2008, in India, there were 224 billion $ listed companies accounting for 81% of the total market cap of all the companies listed on the Bombay Stock Exchange (BSE). Further, the promoters’ stake in those billion-dollar companies was 67% of the total market cap of those companies. Moreover, only about six companies (ICICI Bank, L&T, HDFC, IDFC, ITC and IFCI) have no identifiable individual promoter or promoter group.

(Source: Building Billion $ Indian Companies by Market Cap, by Dr. Pravin P. Shah, Growth Publishers, 2008)

Worldwide, majority of the businesses in number as well as in value are family-run and family managed. Hence, the succession issues are a global phenomenon.

In India, we have witnessed that wealth does not pass in the family beyond the third or fourth generation or business does not remain with the family beyond the third or fourth generation. One of the main reasons for this is that the succession issues are not properly managed.

To illustrate various issues and challenges involved in succession management, various reallife examples are given at appropriate places. The purpose is not to criticise any particular person, group or family, but to learn from the way they handled succession issues and/or their mistakes.

In this article, masculine pronouns are used for brevity and refer to both males and females. Hence, ‘he’ also means ‘she’ and vice versa.


The basic question is can you manage succession, just as you manage a project or a business?

Yes, it is possible to manage succession, just as managing a project or a business. The basic principles are the same. In Kautilya’s Arthashastra, Rajguru Chanakya explains how the succession in the kingdom from generation to generation should be handled.

Let us discuss some of the important ingredients of effective succession management in family-run companies and how to achieve them.


The present leader should recognise the reality and be aware of various events which are likely to happen, such as the following:

  • Some day, he will have to retire and somebody will have to succeed him.
  • He should recognise that succession can be managed and if he approaches the issues systematically, he can implement succession more effectively and smoothly.
  • Succession management requires long-term planning and execution: there are no quick fix solutions. For example, it has been reported that Captain Nair, Chairman of the Leela Group of Hotels has decided a succession plan to avoid any family feud in the future. According to his plan, his elder son, who looks after finance and day-to-day operations will get the hotel business while his sibling will spearhead the group’s new ventures.
  • A leader should also be aware that sudden emergency may arise because of his untimely death or severe disability.
  • In Succession management, things may not happen as planned. However, if the succession is systematically managed, then the outcome would be much better than if it is handled haphazardly.


It is essential for the present leader to define his vision, mission and then set the goals. For example, his mission statement could be: “Have a smooth and effective succession consistent with the family values and harmony”.


Following are the major pre-requisites for effective succession management:

  • The leaders should take care of all the members of the family.
  • He should have a proper mindset and provide appropriate opportunity and wealth to every member of the family.
  • There must be fairness in his handling of succession management.


A leader should learn the factors which may influence the effective and smooth succession management and decisions. Some of them are summarised below:

  • Emotional vs. Rational Thinking: e.g., my children should succeed me whether they have merits or not.
  • The family often thinks that a well-established family business can be run successfully by anyone in the family.
  • The family members may have an incorrect perception/view about the capabilities of the next generation, even though it may not be in tune with the reality. For example, the parents may think that their child is very capable of being a successor to the present leader.Culture, personal value systems and family tradition: For example, elder son always succeeds the father.
  • Ego Trip: The outside perception by relatives, friends, and executives in the organisation, etc. For example, if an elder son is not given a responsible position in the organisation and the younger one is given a responsible position or a better title, then it may be a subject-matter of gossip, evaluation, criticism.
  • The thinking regarding females: Whether females can work in the family companies and can females succeed to a family business? A problem would arise if the female members do not agree to the thinking that they cannot work in the family companies or they cannot succeed to the family businesses.


In India, we are witnessing the succession issues in more and more family-run companies, such as Birla, Tata, Bajaj and Reliance, and even in a professionally-run company like ICICI.

For example, in the Birla group, Mr. G. D. Birla was succeeded by his grandson Mr. Aditya Birla, bypassing his father.

In the Bajaj family, because the brothers, sons and cousins are contenders, there are succession disputes among them.

In the Tata group, presently the successor-Chairman is being selected, who may or may not be from the Tata family.

The present leader should identify the challenges that he is likely to face in effective succession management. For this purpose, he should proceed systematically. He should list out the family members, their present ages, and the likely major future events and their timings, e.g., children’s education and training, their entry in the family business, his retirement and the succession. Based on this, he should prepare a list of likely succession challenges he will face in years to come.
One of the major problems in a family-run company is to decide about the succession criteria. For example, whether the succession should be based on merits or on seniority.

Hence, every family should define the family values and the personal values system it wants to follow in this respect. This requires tough decisions on the part of the family, particularly, in a family-run listed company.

If there is only one potential successor, the question may be about his present capability, his potential to be a leader, his age, his willingness, etc.
Sometimes, a potential successor is capable of succeeding, but he may not be interested in the family business and he may want to set up his own business or profession. The present business may not measure up to his ambitions and aspirations. Post liberalisation and globalisation of the Indian economy, a vast number of opportunities have opened up for starting new businesses.

Further, a potential successor may not be interested in being in any business; he may want to be a doctor or a professor or a social activist.

Let us suppose that the father wants to retire in one or two years, and therefore, the succession question has arisen.

Let us further suppose that he has one son who is actively involved in the management of some of the companies in the group. He is capable of succeeding the father, but he is not ready to take over the full rein of the group because he is not willing to devote full time and attention required for managing the business.

If an outside person is brought in among Professionals, then the question of working relations between the son and the outside Professional would arise.

In several wealthy families, it is witnessed that some children do not have a fire in their belly or they just want to enjoy life with the family wealth.

The potential successor may have the technical competence, but he may not have leadership quality or skills which may also be very important for a particular business.
In a knowledge-based business, the potential successor may not have the required knowledge as well as skills and he may not be willing to acquire the same. That would really pose a challenge because a person cannot manage or control a function which he cannot himself do.

The problem is more complex in a knowledge-based service company (e.g., financial services, IT software, etc.) than in a manufacturing company.

In some cases, where the present leader is relatively young or is not likely to, or willing to, give up his rein in a timely manner, then also there may be a conflict with the potential successor even if there is a single successor. He may not be willing to wait for a longer time required for succession.

In such cases, one solution may be that the existing leader gradually delegates more and more responsibilities to the potential successor, so that the potential successor is able to do worthwhile work commensurate with his abilities.

If the potential successor does not have the capability as well as potential, but the promoter insists that his family member should be a successor, then it may adversely affect the functioning of the company.

If the son (or daughter) of the promoter has no capability at present, but has the potential to succeed, and if he takes over the reins today, then he may become diffident or he may not be able to properly manage the company.

If in a family, there is more than one contender for succession, then also there may be a problem. E.g., brothers, uncle and nephew, cousins, son and nephew may be contenders in which case the conflict may arise (e.g., Bajaj family). Further, if an elder brother is less capable than a younger brother, the problem of selecting the successor may be a vexed issue.

If a successor is very much younger to the top one or two senior executives, there may be an issue of whether the younger promoter would be able to lead very senior executives.

The management style of the present leader and the potential successor may be diametrically opposite. Therefore, he may not be interested in working under him or following his footsteps. This may create a potential conflict between them.

Several families have decided that the equity shares held in the listed company will pass on only to the male members, and the female members will get the wealth in monetary terms. This raises several vexed issues. For example, how to monetize the shares in the family-controlled listed company to give the monetary value to the female members in the family? When should this be done? What if at the time of inheritance, the other male members in the family do not have adequate liquidity to buy the shares from the female members who will inherit the same?

Succession issues are there even in a professional firm of chartered accountants and lawyers. However, in a partnership concern the issues involved are different from those in a limited company because in a partnership concern there may not be hierarchy of positions.


One should develop appropriate solution(s) for each issue. It may not be possible to develop a solution immediately. But one should periodically think of the solutions, may be with the help of others.

If there are two possible contenders, then both may be given a title of joint managing director and then a division of functional responsibilities be made between them according to their capabilities.

Real-life examples: Some real-life examples will illustrate the point.



Some 20 years ago, a promoter of an unlisted software company recognised that he has 2 sons studying in a college and one day they may enter his business. At that time, succession issues may arise, and therefore, he wanted to plan in advance. For that purpose, he decided to start another business in the same line which would gradually become of equal value.

He also wanted that during his active life, he should have the final say in respect of both the businesses. Once his sons become capable, he would gradually give the responsibilities to them. He wanted that the succession should be very smooth and tax-efficient.


  • The first issue involved in this case was of the ownership, present ownership and passing of the ownership to the next generation.
  • The second issue involved was of the present management control and gradual passing of the control to the next generation. The control in legal sense arises from the ownership of the equity shares and if the ownership is to be passed on to the next generation during the lifetime of the present leader, then the tax issues may arise because at that time gift tax was in force.


An appropriate solution which would meet his requirements from a taxation angle as well from a business angle was developed by his chartered accountant. This demonstrates the role a chartered accountant / Tax Consultant can play in the succession planning.


Today, his both the sons are involved in managing two different businesses which have synergies, but each one is running the business independently. This has avoided the potential conflict between the father and his two sons which could have arisen if there was a single business.

Similarly, it is also reported that the RPG Group has divided its companies between the two brothers.


Compare this with the case of Dhirubhai Ambani Group where RIL is the company and there are two contenders to succession, Mukesh and Anil. Everyone is well aware about the legal battle which was fought between the two brothers regarding the succession and division of the RIL businesses, their assets and related issues.


  • The first objective should be the preservation of the wealth in the family and the second objective should, if possible, be the preservation of the same business in the family.
  • If the next generation is not interested in the same business, the succession need not be to the same business. In such a case, the existing leader should provide support in developing the business of the choice of the potential successor, and at appropriate time sell the existing business.
  • An interesting case of succession is of two sons of Dr. Parvinder Singh who inherited Ranbaxy Laboratories Limited and later on sold it to Daiichi of Japan. With that money, they have started new businesses in the field of financial services (Fortis Financial and Religare Financial Services) and healthcare (Fortis Hospitals).

Is it possible to separate ownership and management: In India, it is very uncommon. But in developed countries, it is very common.


In a family-run company, the succession management, governance of the company and governance of the family go hand in hand. Hence, every wealthy family should have a code of family governance or family code of conduct and preferably, it should be in writing. Examples of corporate houses which have adopted such a code, include, GMR, Lanco, etc.

The family code of conduct should cover division of assets/businesses amongst the family members, rules for business decisions, succession criteria, training and grooming of the family members to a defined carrier path, inheritance, separation from the family, misconduct, etc.

The code should also cover all other major aspects, such as code of conduct in public, various decision-making rules, remuneration policy for family members, the personal lifestyle related issues, such as residence, type and number of cars each member could have, club membership, etc.

Every family member should be required to read and understand them. There should be a characteristic approach. Those who follow the family code of conduct should be appropriately rewarded and those who do not follow it should be appropriately punished.


It is often debated whether it is possible to develop entrepreneurs or leaders, or are they born and not made? The answer is Yes and No.

It is not possible to develop or train a person to be an entrepreneur or a leader to deal with every aspect. However, there are a number of areas where he could be given proper and appropriate education and training to make him a better entrepreneur and leader.

Secondly, it is not a question whether it is doable or not because in a family-run company if a successor has to be from the family, then it is essential that he is given proper education in this respect, so that his chances as a successful leader are improved.


It is very important to groom the potential successor for taking over the rein when the existing leader would retire. This requires proper education and training of the potential successor. The potential successor should not assume that because he is from the promoter family, he has a birth-right to succeed or that he can manage the family-run business.

For effective succession management, efforts must be made on building the capability of every potential successor. The capability-building exercise should begin from home and right from the childhood.

Every child in the family must be given basic education and appropriate higher education. Nowadays, recognising the need for this aspect, many management colleges have Family-Business Management courses.

Besides the formal college education, the potential successor should be properly trained and groomed in being a next generation leader.

The training and grooming should be not only at the Board level. He should be given a thorough training in all the key result areas of the business, though eventually he may select one or more of those areas for him to play a major role in years to come.


A potential successor would have certain skill sets and knowledge base. He would also have his likes/dislikes and his ambitions/inspirations. Moreover, his present strengths and weaknesses should be identified.

Similarly, every business has Key Result Areas or Critical Success Factors for being successful in that business. Hence, it is necessary to compare the Key Result Areas of the family business and compare them with the knowledge and skill sets and the likes and dislikes of a potential successor.

Thereafter, identify the gap and determine whether it is possible and if yes, how to bridge the gap.

In one company, we suggested that the group should set up a separate unlisted company for those members in the family whose background and skill sets were not appropriate for the listed company’s business. These family members are allowed to run the business of that company independently, so that they do not adversely affect the business or activities of the listed company. This recommendation has worked very well with that group.


The leader should keep in mind that many times an outsider can play a better role as a mentor for the next generation than he himself can. The mentor(s) may be an independent director, close relative, family friend or a consultant.

The mentor(s) should be carefully selected. He should act in an impartial, unbiased and objective manner. He may act as the situation demands, e.g., as a guide, a mediator, provide assistance in objective analysis of the issues, alternatives and their consequences, an arbitrator, etc.

In a listed company, independent directors should ensure that there is a proper succession planning and execution, particularly, where the present leader is approaching retirement or is not keeping good health.

If in case of a listed company, there are several contenders from the family for succession, then ideally the Board or its committee should make the final selection of the successor.


Succession management is not a one-time exercise; it is a life-long journey. The decisions taken in the past may require a change or the actions taken in the past may not work out, and therefore, changes may be required in the past succession planning.

Further, if there is an untimely death of the leader, or if he develops some health problem, then a change in the succession timing may required. For example, Mr. Ashok Birla died in an accident at a relatively young age, and therefore, his son Yash Birla had to succeed him at a much younger age.

An annual review of the performance of the key family members should be conducted which will also make the potential successor(s) aware about his (their) progress. For this purpose, the group should establish the evaluation process and the specific criteria.


One of the important aspects of effective succession is to determine the timing of retirement of the present leader and succession of the successor.

The succession timing should be well planned: it should not be too abrupt so as to leave a vacuum during the transition phase or too late to de-motivate the potential successor.

The potential successor should enter the family-run business as soon as possible. The leader should gradually delegate more and more responsibilities so that the appropriate opportunities are provided to the next generation for taking up the baton.

The present promoter-in-charge may continue as a mentor (e.g., as a non-executive chairman) for a few years until the successor is fully ready to take over the reins of the company. For example, Mr. Narayan Murthy at Infosys did so for a few years. Thus, the practice of having separate persons as CEO and chairman may be followed.


For most family-run companies, particularly small and medium enterprises, Quality chartered accountants / Business Analyst are the first point of contact for any issue. At minimum, a chartered accountant can play the following roles:

  • He can draw the attention of the present promoter-leader about the need for succession management.
  • He can list out for him the tough decisions required for succession management and assist him in reaching those decisions wherever he could.
  • He could also suggest the relevant business consultant or the relevant business management courses, which could help the leader and the successor.
  • Any effective success management may involve restructuring of the ownership or the businesses. In this area, a chartered accountant / Business Analyst with Legal ,can play a significant role in working out the most tax-efficient and legally effective methods.


A good and effective succession management is achieved through a judicious combination of various factors, such as planning, structure, discipline, mindset, culture, determination, training, implementation, and the like.

Succession management involves ethical and moral issues rather than legal issues. Hence, the approach to this aspect would vary from family to family depending upon its concepts, views and value systems.

Proper succession management, like many other projects, requires thinking and, as Henry Ford put it, “Thinking is the hardest thing there is and that is why very few engage in it”.