This pandemic has taught us that if the immune system of the body is healthy and the immunity is high, it can fight the onslaught of any disease. Family business is a living entity, it has its own immune system. The virus attack comes in the shape of sins, committed by different generations through their four stages of life. There are different variants which affect in childhood, adulthood, midlife and old age. Businesses which succumb get destroyed. How can one build immunity within a family business? There are actions of individuals or the family unit which reduce the immunity and make the family business susceptible to the curse. These sins must be avoided so that they don’t infect the body. A healthy family sustains a long-lasting family business. There are lessons to be learnt in each sin. Readers can take these learnings and apply them with ease.
Sin 1: The Elder Son Syndrome
India has largely been an agrarian country. Our customs, festivals and common rituals are connected to agriculture and have given rise to the concept of the elder son being the obvious heir or the next family supreme to take charge. Since the elder one gains strength first, he also becomes the responsible one since agriculture is about strength and muscle. It is years and years of mental conditioning that has defined the way we think and live and given power to the eldest male member in the household.
With the prevalence of the Hindu Undivided Family (HUF) system in India, the importance of the elder male found further prominence. An HUF or a joint family is one single entity with social status and economic power. If the head passes away, an undesirable vacuum is created which may put the HUF in disarray. Hence, as per seniority, the eldest male is the head of the family and karta of the HUF. The year 2005 witnessed the amendment to Section 6 of the Hindu Succession Act of India, giving full rights to daughters to be part of their father’s HUF. We have witnessed this change of mindset after forty-nine years.
Furthermore, India has been a land of kings and queens. We have all grown up listening to inspirational stories of valour and sacrifice of these kings and queens. It is in our DNA to revere them, and, in extreme cases, worship and follow their actions. Centuries of conditioning, even as recent as being ruled by the British Crown, have instilled these beliefs. For luxury and lifestyle, business families and the elite, till today, look up, aspire and get influenced by royal families. Their succession plan is the same—the eldest of the male heirs inherits the throne.
This behaviour of business families, in my opinion, is a sin. For successful succession in business, one has to shun the elder son syndrome. Business families are already changing and the most talked about example is that of renowned industrialist G.D. Birla. He had three sons. The jewel companies of his empire were handed over to his grandson, Aditya Birla. Whatever may have been the internal reasons, the move paved the way for business families to think differently. They could see that his choice was clear—business first.
From agriculture to monarchy, there are varied deep-set influences which we carry into the business environment. We moved from our agricultural roots to business, but our mindset didn’t. While agriculture is about strength, business is about a sharp mind. While the HUF is about continuity, business is about competency. While monarchy is about a figurehead, business is about leadership and vision; and hence, the mindset of considering the eldest as the natural successor/supreme doesn’t find place here. The family must have a succession direction and not be glued to the obsolete order that is followed in agriculture or monarchy. In fact, one can see changes happening in royal families too. The reasons could be gender equality or other things, but laws are already being amended. Are these signals? The Succession to the Crown Act 2013 (an act of the Parliament of the United Kingdom) allows the eldest child—either male or female—to be the heir to the crown!
A successor in a family business must be competent to sustain the business and the family. He could be a family member or not. If we go by the elder son syndrome, we won’t be able to place the most deserving person (or the right fit) in the leadership position. Hence, a departure from the elder son syndrome is essential and becomes the first indication that business families are serious about growth and continuity.
This excerpt from How to Thrive in a Family Business: Business Lessons from My Baidyanath Journey by Ajay Sharma has been published with permission of Penguin Random House.
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