Third Gen Entrepreneurs: New Age Businesses, Old Age Value Systems
Article by Ankit Shah, Co-Founder and COO of HRHNext
Plenty of studies have been commissioned to study Entrepreneurial families and their correlation to their longevity. Most studies are divided about the success of families, which thrive despite being active for more than three generations. Does entrepreneurship run in the blood or are entrepreneurs made? What critical traits do third generation businessmen possess that others don’t? In today’s day and age where speed and constant innovation are de rigueur for survival, what defines success? How do modern families continue to thrive in an ever-changing environment while retaining their core value systems? This essay attempts to answer such tricky questions.
I come from a traditional Indian family born and brought up in true Nizami culture from the erstwhile state of Hyderabad. Our family has been in Hyderabad for over 250 years and was one of the earliest settlers in the Pearl City. The ancestors, true to their name were the royal jewelers to the Nizam. Most of the family that traversed from a sleepy village in Rajasthan chose Hyderabad as business was flourishing here. The Nizam was quite entrepreneurial and in quite a contrast to the rest of the country was perhaps the richest person in the world at that time. I would presume the lure of having a decent shot at the flourishing trade environment would have tempted the folks to move base here. The generation thrived decently well catering to the needs of the royal family and allied trades. Time went by and socio political dynamics of the nation demanded that the family innovate to meet the needs of a newborn nation. But as luck would have it, the old trade vanquished and the next generation had to reinvent the business cycle all over again. This time the opportunity was not limited to catering to the likes of a few noble men. It was a time when people wanted to know what was happening in India and elsewhere around the world. Our grandfather had to press the reset button all over again and his journey began trying to sell LPG cylinders on bicycles. It was a tough job convincing Indians to migrate from their existing habit of cooking food on Chullaas and other mechanisms. He was a pioneer who saw what was lying ahead. He carried the same belief while starting the first chain of electronic stores across South India. Most of the products were imported and radios and gramophone sets were a novelty. For years, the chain of stores catered to the needs of aspiring Indians wanting to experience newer sights and sounds.
The electronics business died after running for 4 decades. But what he did was to anticipate the future and offer goods and services to an India that was awakening. In his lifetime the legacy that he left behind was not the business itself but the core values and beliefs he instilled in the generations to come after him.
The message was loud and clear. Businesses may come and go but what you leave behind as value systems is what defines you. Grandpa had a team, a coterie of like-minded individuals who worked with him and beyond till the business survived. Some survived even if the business didn’t. They took leadership roles in other ventures. The trust-based system, which empowered these unique individuals to come together, was the most defining learning for us. To value attitude and integrity over specific skill sets. To value employees over customers. To value customers over principals. To inculcate a culture of family amongst employees were learnings and concepts in sync with today’s co-ownership and intrapreneurship models. The senior leadership staff always had a say in business decisions, whether they were major or minor.
In modern management studies we delve and debate upon the benefits of long term investments taking precedence over short-term dividends. Such debates casually took place over candid conversations at a breakfast table and it was no wonder where the debate was headed. Family owned enterprises face unique challenges. While most would hover around who would lead the family or the firm into the next generation, our discussions centered around which ideas would survive. Which breakthrough concepts will stand the test of time.
What makes family owned enterprises thrive?
F i r s t s u c c e s s f u l f a m i l i e s s e e t h e f u t u r e w a y t o o e a r l y a n d a d a p t t h e m s e l v e s t o c h a n g e s i n t h e b u s i n e s s l a n d s c a p e .
S e c o n d , i t ’ s a l w a y s b u s i n e s s f i r s t f o r s u c c e s s f u l f a m i l y o w n e d e n t e r p r i s e s .
T h i r d , s u c c e s s f u l f a m i l i e s r e m a i n l a r g e l y u n i t e d e v e n i f t h e b u s i n e s s e s d o n ’ t .
As we enter the third generation of entrepreneurs still operating out of Hyderabad and still living together in a joint family, the lessons imbibed into us are standing the test of time. Though there is no single business that binds us together, what keep us together are the values. The family has diversified into IT, BPO & LPG. Each unit needless to say is an Independent entity and largely run by respective partners. The firms have their own core team players, just like the erstwhile days and have been active in the businesses since inception. There is seamless cross sharing of business insight, information and access to newer ideas. The owner partners continue to keep giving feedback and take active interest in others businesses without directly getting involved. Contacts and business leads are shared informally without expectations. It is as if there is a higher purpose and an unstated Family Mission. Family members who are not actively involved in business support philanthropic efforts and their involvement in social activities and engagements is sometimes enough to keep the family united.
As the next generation gets ready, it is certainly not expected of them to inherit the business or take charge of the reins, as other internal stakeholders may be highly competitive and talented. What is really expected though is they carry the same belief and value system, which held the family system to survive and thrive together, forward for years to come.