More than 1 in 3 people in India have hypertension. Diabetes and pre-diabetes together affect 1 in 4 people. In absolute terms these numbers are staggering. The business community is particularly vulnerable because the pressure and stress of running a business leaves no time for health and fitness. These metabolic diseases increase the probability of stroke and cardiovascular disease and sharply increase the risk of early disability and death.
But by the time these conditions show up in the lab reports it is already too late. Each of these diseases started decades earlier and slowly built up in the body. Modern medicine treats only the symptoms and not the disease. So a lifetime of progressively increasing insulin or BP medication is prescribed by doctors and the patient is resigned to live with the disease. Patients think that this condition is hereditary or maybe a part of aging and accept the disease as inevitable.
However, these diseases are entirely preventable by a mix of lifestyle and diet control. Cutting out processed food and sugar and balancing the right nutrients starting from an early age when combined with exercise and adoption of a regular lifestyle enables you to steer clear of doctors and medication and live a healthy disease-free life till the very end. The famous guru, Dr. Peter Attia, in his bestseller, Outlive, states that the answer to managing these metabolic diseases is to adopt a preventive approach – not drugs and ICU visits.
Exactly the same principle applies to family business unity. When there is a breakdown in trust and communication between family members they scramble to repair the relationships but by then it is too late. There is already so much acrimony and ill will that it takes years of patient efforts to rebuild trust step by step. In many cases, no resolution is possible because the relationships are broken beyond repair and the business suffers. The potential value destruction due to internal family conflict at a national level is staggering because 90% of all listed companies in the country are family businesses.
But this breakdown of trust and communication did not happen overnight. Its roots go back years and maybe decades. The fault lines were visible years back but the patriarch did not heed the early warning signs or did not know how to resolve them.
Everyone is armed with the knowledge that the overwhelming majority of family businesses do not survive beyond the third generation. While the conflicts in the biggest family businesses in the country – Ambani, Godrej, Kirloskar, Murugappa, Singhania, Hindujas – have been widely reported in the press, smaller family businesses have experienced the pain of splits just as much.
In my years of work as a Family Business Advisor and coach I feel that the founder has to start thinking about internal alignment and long-term unity as soon as the second generation joins the business. They need to understand the very real risk of hairline cracks widening to unbridgeable cuts. The reality is that most founders get into denial mode and hope everything will get resolved on its own with time.
Building an enduring institution requires a strong foundation and a long-term vision and these are the proactive steps a founder must take to build unity in the DNA of a family business.
1. Values & Culture:
Because power and authority is so centralized in a family business the founder has an oversized influence on the values and culture. So think about what values you stand for and what kind of a culture you wish to build. Family Culture is the foundation stone of long term family unity.
Establish open and honest communication channels within the family. Regularly share updates about the business and encourage family members to express their thoughts and concerns.
All family members need to get internally aligned on values and culture so that they are not sending conflicting signals to employees. In addition to keeping the family together, a strong culture also directly impacts financial performance.
Companies with strong cultures typically deliver 2 to 3 times higher returns to shareholders. A great culture manifests itself in enthusiastic teams, lower attrition, more innovation, better customer service, and ultimately, better financial performance. In a Bain & Company Survey of 365 companies, 81 percent believe that a company lacking a high-performance culture is doomed to mediocrity.
While over 90% of business leaders agree that culture is critical to success, they don’t know where to start. Most Founders manage culture intuitively based on their personal values and beliefs, when and if they find the time, and without any long-term strategy.
2. Co-create a Family Charter:
A Family Charter lays down the principles around which a business family would like to make decisions, solve problems, resolve conflicts, and govern their organization. It becomes the foundation for governance – how the family will guide the business. It is a process designed to open up the lines of communication and offer the family an avenue to a sincere and open conversation regarding their relationships as owners, managers, and family members.
This is a set of mutually agreed rules that everyone will follow as they work together to manage and grow the business.
You have achieved success in building the business. Now comes the next stage: How do you build an enduring legacy for generations to come? From smooth leadership transitions to conflict resolution in day-to-day decision-making. Because you will have around the table a diverse team of family members across generations with different capabilities, personalities, and aspirations. The influence of spouses who come from a different culture brings in an added level of complexity.
3. Annual Off-Site Family Retreats:
High above the shimmering waters of Lake Lucerne in the Swiss Alps, at the Presidential Suite of the Burgenstock Resort, one of the world’s wealthiest families convened in early September 2020. Mukesh Ambani, India’s richest and most powerful private citizen, retreated with his wife, three grown children, and their partners for a family retreat to brainstorm long-term succession planning. Having gone through a difficult transition when Dhirubhai passed away without leaving a will in July 2002 they wanted to plan a smooth succession.
But why go outside for a family meeting?
Moving to a different location provides a change of scenery and environment, which is refreshing and stimulating. It helps participants break away from their daily routines and mindset associated with their regular workplace and home.
Annual off-site retreats set the stage for sincere and transparent conversations on what is working well and what needs to change. It helps reset relationships and nips problems in the bud. In my 10-year experience of hosting such retreats, I feel this is absolutely vital to the long-term unity and success of every family business.
Family Business Advisor and Coach