Professor K Ramachandran from the Indian School of Business looks at the impact that values and visions can have on the success of a family
Traditions and values form the core ideology of all everlasting institutions. Visionary families are characterised by a core purpose, a collectively shared mission, and a set of unique values. Their core competence lies in their ability to shed the irrelevant and acquire the relevant, which helps them to be in sync with the emerging socio-economic practices of today's rapidly changing global world. Businesses that are owned or controlled by such visionary families, naturally acquire the family's core competency, which is stimulating progress while preserving the core values.
Often not so heavily driven by clearly defined structures and systems, family businesses rely on traditions and values for accomplishing their strategies and vision. Corporate values are not only the unifying factor, but also the main driving force behind all business dealings in such organisations. Keeping in mind the quintessential role played by values in the growth and success of family businesses, the vision of the next FBN summit in its prime youth is woven around the idea of synthesising family values as the key success factor for building lasting businesses that emerge as true winners in the global economy.
Family business leaders are not mere owners of some kind of property, but trustees of significant wealth of the society – their business not an individual possession, but a collective asset that should be preserved, grown and passed on from one generation to the next. By virtue of being sub-systems of the larger system called society, family businesses exhibit a high sense of responsibility towards the larger community and are naturally committed to bring about visible social impact through business.
In the current global economic scenario, the major thrust of all businesses is on beating competition through innovation. However, in the case of family businesses, traditions and values act as great competitive advantages, provided they know how to accommodate innovation with tradition. Maintaining sustainable growth in profits and growing beyond the "shirt sleeve to shirt sleeve in three generations" phenomenon calls for sustainable entrepreneurial capabilities across generations and constant innovation and adaptation in technology, operations and strategies over time. The only way to keep the productive power of the centuries-old values, traditions and practices intact is through questioning and revalidating assumptions and reinterpreting and revitalising values over time.
Unfortunately, the amoebic model of splitting is quite common in family businesses for want of role clarity and absence of effective governance practices. This is particularly so when family members have to wear multiple hats, playing the roles of business owners, employees and members of the family simultaneously. Strong emotional ties, tolerance for diversity, and unity in purpose are important factors that bind the family together and prevent them from breaking apart.
Traversing outside the Western world, FBN is all set to explore the "new world" of Asia with an open mind to integrate the DNA of family businesses across the world. The next Family Business Network Summit in New Delhi, 20–22 Oct, will provide a platform for business families from across the globe to discuss issues around the overall theme of "Family Business Values for Sustainable Success in the Global Economy". It is a great opportunity for family business leaders, academics and practitioners to share insights on emerging issues of concern learn from each other's experiences and synthesise the influence of family values on businesses across cultures.
To register for the summit, visit www.fbn-i.org/summit