“Maybe you are searching among the branches, for what only appears in the roots.” – Rumi
The collective verses the individual, the ‘We’ versus ‘I’ – the values that are propagated not just by spiritualists but by Business Gurus also form the bedrock of family businesses that account for a large share of global and Indian businesses.
In India, there are several well-established family business houses such as Godrej, Birla, Mahindra and Bajaj with interests spanning diverse sectors. However, a key finding has been that an overwhelming majority of family businesses do not remain together beyond three generations.
Family businesses in India are estimated to account for 70% of the GDP(1). Over the last two decades, the performance of family businesses has been improving, with many performing better than some public sector companies, and even MNCs. India has one of the highest numbers of family businesses in the world because most businesses, especially small businesses, at the very core are family businesses. However, a large number of family businesses are unlisted, both in India and globally.
Family Business Network (FBN) and the India Chapter
The Family Business Network has its Headquarters in Lausanne, Switzerland. It has 4,000 business families – encompassing 16,000 individual members of which 6,400 are Next Generation – as members from across 65 countries who it engages with through a range of activities and events organized annually. It helps them manage their businesses and adapt and transform across generations (3). It provides an opportunity to build better families and businesses through international exchange of ideas and practices.
The Global Network has a unique approach of looking at businesses over generations and as an investment for the future which ensures a long-term perspective with respect to decision making and provides stability to the economy of the respective countries.
In India, FBN collaborated with Confederation of Indian Industry (CII) to form the CII FBN India Chapter in 2005. CII FBN works towards:
The CII FBN India Chapter undertakes several initiatives and holds conventions, summits and workshops to help family businesses deal with issues such as generation gap, managing aspirations of family members, managing professionals and family members as part of the management, amongst other issues.
Efforts made by CII in partnership with ISB towards promoting the need for family governance have resulted in an increase in awareness regarding governance.
Studies reveal that family businesses in India are on a growth trajectory, with 89% of businesses expecting to grow quickly and 45% eyeing steady growth over the next two years. As far as expansion plans go, slightly over half are looking at international markets, while 40% are aiming to diversify. (2)
Amidst regulatory changes and disruptive technology, family businesses are set to grow and expand, and increase their contribution to the Indian economy.
(2) PwC India Family Business Survey 2019