Heir today, gone tomorrow
Succession plans
come with their share of conflicts — and the clash between generations is
evident from control issues to differences in the thought process
Many large business conglomerates in India started
out as family businesses and continue to pass the baton on from one generation
to next. The lasting success of the business is therefore largely dependent on
the successful transition of leadership. And yet, it is perhaps one of the
thorniest subjects that business families grapple with: succession planning.
A new study, undertaken by a wealth management firm,
points out the key conflict areas between two generations. It’s the age-old
problem, though. The kids think parents are too controlling. The parents feel
their children are either not competent enough or ambitious enough. Among
others.
Generational gap
“The older and younger generation have always had
their differences — usually the younger generation is more eager to implement
new ideas and willing to try new things, while the older generation, based on
its hard-earned wisdom, tends to curb their enthusiasm,” says the report.
One area that this difference of opinion is quite
glaring is the adoption of technology and digitisation. While the older lot
remain suspicious about the technology, the young ones are eager to give their
businesses the cutting edge.
Letting go
One of the most cited reasons for failure of
inter-generational transfer according to the report is: “Parents thinking wards
are not entrepreneurial enough and the younger generation feeling that the
elders don’t want to let go of control.” And more from the younger generation
hold this view as compared to the older lot, according to the findings.
Additionally, there is more pressure on the next gen to live up to the
achievement levels set by their elders.
Not always the right fit
The ‘it’s yours whether you like it or not’ is not a
concept that flies with the younger lot anymore. If they feel that the family
business does not fit right, they are vocal and decisive about walking away,
the report says. It doesn’t always stem from a clash with the older generation
though. Sometimes they just don’t find the business glamorous enough, sometimes
it’s because their heart lies elsewhere.
Gender equality
Many Indian businesses today are inducting the
daughters into the businesses, making no distinction between the genders of
their children while picking successors. “It will take a while for the
traditional mindset to change completely. Due to the differences in temperament
and outlook, not all next gens find their place or find integration easy.”.
ETP 6MAR18
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