A Coaching Model Created by Vijay Kumar Karai
(Executive Coach, INDIA)
The backbone of the economy in most countries is family run businesses. Most family businesses are started by an enterprising individual who builds it to a level with a hope that the next generation, ie his sons and daughters take over the business. In India only 4% businesses are succeeded beyond 3rd generation, only 14% beyond 2nd generation and 33% beyond 1st generation. It means around 49% businesses get shut down in the first generation itself (reference no.2).
Poor succession planning, and inability of the 2nd, 3rd or later generation to take over and run the business are sited as some of main reasons for the dismal performance of business , inspite of a successful start by the ‘promoter entrepreneur’.
My Coaching Model (VALUE) is focused around family businesses and in particularly helping the transition and transformation of the 2nd or 3rd generation to managing and leading the business that they inherit. The aim is help the client (the next generation inheriting the business) in the smooth transition, achieve success and finally feel fulfilled.
A– AWARENESS for ALIGNMENT
U-UNDERLYING BELIEFS & REALIGNMENT
E-EXECUTE & ENERGIZE
The 2nd or 3rd generation entrepreneur (the client) looks at the values around which the company that he or she inherits against his own value systems. Depending on the size of business and/or the market forces, he evaluates these values of the company and that of his own.
Ideally, if the father (mostly) has planned it well, he would have installed the same value systems in his sons/daughters that he has built the company on. Even so, the next generation entrepreneur will bring their own distinct values with him/her. The market forces too may compel the company to change which sometimes the next generation maybe more willing to accept the change than his earlier ones.
Awareness for Alignment:
The client is helped to become aware of themself. That includes one’s personality type, leadership style, risk taking capability, Emotional Intelligence, strengths, skill gap analysis, etc.
Once the values are identified and awareness (self) is established, the logical steps is to map the clients values, strengths, etc to the demands of the company. Skill gaps that need to be plugged, leadership style to be fine-tuned, honed and developed.
Softer skills such as risk management, people management, etc need to be studied and may require separate coaching.
The coach also helps the client to draw up his life plan for the next 5, 10 & 20 years and map how much of his goals in life would be met by running the business he inherits. The coach also helps the client explore various options in case business doesn’t fulfil all his/her goals in life.
Having said that, it is also possible that some values of the client maybe very fundamental and hence some alignment is needed by the company also to be in sync with values and expectation of the owner/CEO.
Based on the values and awareness of client and mapping them on to the business that they inherit, the coach then helps the client plan a program to ensure that they learn the ropes needed to take-over or even hand over the business.
For example, the client may attend a program on financial management, leadership development program, etc. The coach may also help client to professionalize the business and to let go of the day to day control, incase the client wishes to pursue a line of business that is different to the one he inherits.
The coach helps identify his strengths and work on them. He also studies others in similar situation and how they have coped with such transitions.
Underlying Beliefs & Realignments
As the client embarks on the learning journey he also faces several underlying beliefs that he has been living with. Sometimes, the learning show that some beliefs that he had may not be real. The biggest belief could be that just because the father ran the business and managed the day to day operation, the client (son or daughter) too should do the same. Some clients also have some limiting beliefs that he or she cannot be as successful as the father or the one from whom they inherit.
The coach challenges the client to examine several such beliefs. For example, some powerful questions could be:
- Can the company that operated for the last 50 years in a particular way can continue to do so for next 50 years?
- Have the company’s response to the dynamic market forces been adequate?
- Can professionals have the same passion that the business owner has?
- How fulfilled will the client feel after dedicating his next 10-20 years in the development of this business?
The culture of the company built on such underlying beliefs tends to hold back the next generation. Typically, either he accepts the culture or he completely junks this culture, throwing out both the good and bad.
The coach helps the client to study and evaluate in light with what the client wants of his or her life. Realignment is required both by the company and/or client. This could be a very critical step to ensure that the client performs at his peak level and also feels fulfilled.
Executing the realignment is an essential step to ensure harmony between the client’s values and beliefs system as well as his vision for his life. This could be a series of steps, some of which could be initially painful but would help the client and the business in the long run. For example, it could be some of the following steps:
- Client builds the business as per the plan that is in sync with his values, life goals and market dynamics.
- Client hands over partially or completely the day to day management to professionals.
- Client may even hive off parts of the businesses that he is uncomfortable with.
- Client builds new businesses where is interests and passion lies.
- Client firmly establishes his/her leadership style.
- Builds a team that is so energized and willing to execute his vision.
In the final analysis, the client must learn to love the business that he inherits and runs. He must run the business with passion and become a leader that the company and its shareholders look up to. At the end of his career, and when he is ready to step down, he can look back and say it was a life well spent.
The best Armour of Old Age is a well spent life preceding it; a Life employed in the Pursuit of useful Knowledge, in honourable Actions and the Practice of Virtue; in which he who labours to improve himself from his youth, will in age reap the happiest Fruits of them; not only because these never leave a man, not even in the extremest Old Age; but because a conscience bearing witness that our Life was well-spent, together with the remembrance of past good actions, yields an unspeakable comfort to the Soul Marcus Tullius Cicero
Challenges of Indian Family business – By Kavil Ramachandran and Navneet Bhatnagar, Indian School of Business
Indian Family Business – Their survival beyond 3rd generation – By K. Ramachandran, Indian School of Business.