Family businesses have a very bright future in India:
Farhad Forbes
Farhad Forbes was all set on a career in the US after
graduating from Stanford, until a visit back home made him change his mind.
"Moving back in the early 80s, a decade before liberalisation, wasn't an
easy thing to do, but it was one of the landmarks moments of my life and has
definitely shaped and influenced me," says the soft-spoken 56-year old.
After coming back, Forbes joined his father at Forbes Marshall and today, runs the business along with
younger brother Naushad. The company has the rare distinction of making all of
its joint ventures work successfully. Forbes shares his secret
to joint venture success and his personal management hilosophy.
Who has been the biggest influence on your life?
There was no one single influence; many things influence you along the way. The first is what you learn at home — the basic work ethic and not giving up when you fail or don't do as well as you expect to. That was an important thing we learnt while young. My father is a great role model for me, and has influenced me professionally as well. I also learnt a lot during my time in the US, first as a student and then working at HP. That influenced my thinking and helped me develop a sense of perspective.
What is your management philosophy?
Early on in life, one tends to be driven by 'B-school thinking'. But over time, you learn that your intuition matters. If it doesn't feel right, don't do it, no matter how good the numbers. Similarly, if you are convinced about something and the numbers don't necessarily back that up, I'd say go ahead and still do it.
What do you do in times of trouble?
In times of trouble, it is important to rely on your conviction and values, both personal and corporate. We spent a lot of time developing our corporate values. No matter how difficult the problem, if you are not sure how you should do things, go back to your values and you'll see the right path. I believe that no matter how tough the situation, if you persevere and continue to do the right thing — both by your customer and your values — things tend to work out.
What according to you is strategy?
For me, strategy is the approach you take to meet a particular business objective. It is the means in getting to the objective in an efficient manner, consistent with your corporate values, which brings you a source of competitive advantage. And the way you achieve your objective is what makes you who you are and how you differentiate yourself from competition.
Do you believe in following management gurus?
I read a lot of management books when I was in B-school and also subsequent to that. I respect them tremendously and like to hear what they say. However, my values and inner conviction are more important to me. I believe in taking their inputs and then doing what I think is right.
Are values still as relevant in business today?
I'd say they are more relevant than ever before. When you see things going wrong, it's often because companies have compromised on their values. A professor I know used to say that your values are the one thing that shouldn't change over the years — it is how you interpret and apply them that will evolve with time. And this is very true today. I wish the importance of values would be emphasised far more in our present education system.
Who has been the biggest influence on your life?
There was no one single influence; many things influence you along the way. The first is what you learn at home — the basic work ethic and not giving up when you fail or don't do as well as you expect to. That was an important thing we learnt while young. My father is a great role model for me, and has influenced me professionally as well. I also learnt a lot during my time in the US, first as a student and then working at HP. That influenced my thinking and helped me develop a sense of perspective.
What is your management philosophy?
Early on in life, one tends to be driven by 'B-school thinking'. But over time, you learn that your intuition matters. If it doesn't feel right, don't do it, no matter how good the numbers. Similarly, if you are convinced about something and the numbers don't necessarily back that up, I'd say go ahead and still do it.
What do you do in times of trouble?
In times of trouble, it is important to rely on your conviction and values, both personal and corporate. We spent a lot of time developing our corporate values. No matter how difficult the problem, if you are not sure how you should do things, go back to your values and you'll see the right path. I believe that no matter how tough the situation, if you persevere and continue to do the right thing — both by your customer and your values — things tend to work out.
What according to you is strategy?
For me, strategy is the approach you take to meet a particular business objective. It is the means in getting to the objective in an efficient manner, consistent with your corporate values, which brings you a source of competitive advantage. And the way you achieve your objective is what makes you who you are and how you differentiate yourself from competition.
Do you believe in following management gurus?
I read a lot of management books when I was in B-school and also subsequent to that. I respect them tremendously and like to hear what they say. However, my values and inner conviction are more important to me. I believe in taking their inputs and then doing what I think is right.
Are values still as relevant in business today?
I'd say they are more relevant than ever before. When you see things going wrong, it's often because companies have compromised on their values. A professor I know used to say that your values are the one thing that shouldn't change over the years — it is how you interpret and apply them that will evolve with time. And this is very true today. I wish the importance of values would be emphasised far more in our present education system.
How
do you make joint ventures last?
All our joint-ventures are 50-50 ventures, something every lawyer will tell you is the wrong thing to do. They'd insist you get a majority stake even if its 50.1%. When you enter the venture as equal partners, then no one has the upper hand. Of course there are problems and differences of opinion, but you work through them to evolve a consensus and do what is right for both of you. A lot depends on what you want out of the venture — whether it's to satisfy a shortterm need or a long-term sustainable partnership. When we form the joint venture, we take a long time to take the final decision — only when we are sure that we'd like to work with someone indefinitely, do we move ahead with the JV. After that, we live by the conviction that we have to keep it going. It is difficult, but finding a way around the difficulties has been our philosophy.
How do you see the future of family businesses in India?
I'd say family businesses have a very bright future in India. The biggest reason for the failure of family businesses was that they weren't able to manage the transition between generations smoothly. Over time, one learns how companies have managed transitions and can work through these. There are forums and experts available to see companies through this. Consequently, there is a lot more knowledge available and a much greater opportunity for success if transitions go through smoothly. Luckily in India, there is a belief in preserving family businesses within the family, similar to Europe and Britain. Consequently, given the strong family values and exposure to best practices and good governance I don't see why they won't do well in the future.
Mentoring is a big part of what you do...
In any organisation, what comes in the way of success is that people can't work together or some obstacles that get in the way. As senior management, it is our job to ensure that these obstacles get removed and that differences of opinion get resolved and to drive people towards the company goals and visions. I work with my managers towards building the future of the organisation and it's probably the most effective use of our time.
How do you de-stress?
My hobbies are Western classical music, reading and travelling. In fact, travel is one big binding factor in our small but close-knit family. I try to take a vacation at least once a year with my wife Rati, our children and my parents and brother. Sometimes it's a three day getaway, like the last one at Udaipur over Christmas last year.
All our joint-ventures are 50-50 ventures, something every lawyer will tell you is the wrong thing to do. They'd insist you get a majority stake even if its 50.1%. When you enter the venture as equal partners, then no one has the upper hand. Of course there are problems and differences of opinion, but you work through them to evolve a consensus and do what is right for both of you. A lot depends on what you want out of the venture — whether it's to satisfy a shortterm need or a long-term sustainable partnership. When we form the joint venture, we take a long time to take the final decision — only when we are sure that we'd like to work with someone indefinitely, do we move ahead with the JV. After that, we live by the conviction that we have to keep it going. It is difficult, but finding a way around the difficulties has been our philosophy.
How do you see the future of family businesses in India?
I'd say family businesses have a very bright future in India. The biggest reason for the failure of family businesses was that they weren't able to manage the transition between generations smoothly. Over time, one learns how companies have managed transitions and can work through these. There are forums and experts available to see companies through this. Consequently, there is a lot more knowledge available and a much greater opportunity for success if transitions go through smoothly. Luckily in India, there is a belief in preserving family businesses within the family, similar to Europe and Britain. Consequently, given the strong family values and exposure to best practices and good governance I don't see why they won't do well in the future.
Mentoring is a big part of what you do...
In any organisation, what comes in the way of success is that people can't work together or some obstacles that get in the way. As senior management, it is our job to ensure that these obstacles get removed and that differences of opinion get resolved and to drive people towards the company goals and visions. I work with my managers towards building the future of the organisation and it's probably the most effective use of our time.
How do you de-stress?
My hobbies are Western classical music, reading and travelling. In fact, travel is one big binding factor in our small but close-knit family. I try to take a vacation at least once a year with my wife Rati, our children and my parents and brother. Sometimes it's a three day getaway, like the last one at Udaipur over Christmas last year.
CD ET 120803
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