2 Tested Ways of Inducting a Family Member into the Business
Source: Study Cloud
About 85% of incorporated businesses in India are family businesses – Times of India
Welcome back dear readers. In this blog, we will examine the two most effective ways of onboarding a family member into the business. This piece is based on queries by a few of you after the last blog on giving feedback to family members at work.
Today, in addition to my own experience, I also spoke to HR onboarding and training professionals, and interviewed 5 second and third generation family businesses. I hope the result of the exercise proves useful for your own situations.
So let’s get started with the example of twins Alia and Akshay. They have has just returned from doing their bachelor’s degree at a decent university abroad. Two weeks after settling in, they have are to join the family business. A fairly common story in most business families, including mine.
Now there are two ways the twins can be groomed to take over. One, as an apprentice under the direct supervision of their father or uncle, or as a ‘management trainee’ within the organization. For the purpose of this piece, let’s assign (random selection) Alia to the apprenticeship model and Akshay to management trainee. Both are great hands-on approaches where one learns on the job, real time. Let’s discuss the apprenticeship model first.
Apprenticeship Way –
This is the more traditional way of inducting the family member. It is common for the next generation to finish formal education and join the family business. In this method they shadow a family elder, and learn the ropes directly from them (as they unlearn many concepts learnt at university).
““the older generation is sitting on an under-rated wealth of generational experience and wisdom which modern management and younger people need to appreciate. You cannot transplant western management in India” ”
What works –
Working directly with the top boss will give the Alia a front row seat to study the overall business and all its moving parts all at once. It is also the quickest way to induct someone and bring them up to speed to start taking responsibility and sharing the load sooner than later. The eventual transition becomes smoother within the organization and with external partners who interact with the family member over time and understand the succession plan.
Where it falls short –
To begin with, Alia would come with limited or negligible outside exposure. This would impact her ability to add value during critical decision making moments and consequently affect her self-confidence, and colour her perspective and thinking. Which in turn would influence any fresh innovation and evolution of the business. Additionally, because she started from the top, she will have limited understanding of the ground realities and operational nuances. She would need to rely on middle level managers for intelligence and information. Leaving her vulnerable to manipulation and being short changed. She will also inherit the pros and cons of her own conditioning of ‘this is how we have always done it’ mindset.
Management Trainee Model –
In this Ahshay would have a grown up discussion about his mentorship roadmap; training, role and responsibilities, and duration in each department and deliverables. The plan is to give Akshay a rotation and exposure to all departments before joining the top office to work as an understudy. He would have to start working ground-up, reporting to other experienced managers who are not family. Now let’s look at the pros and cons.
““the traditional family business setup is slowly warming up to the merits of a more impartial and holistic work experience for the younger generation. The world has changed at an unprecedented pace in the last fifty odd years” ”
What works –
To begin with being treated like any other employee, or as much as possible would help with grounding Akshay and hopefully tone down any sense of entitlement. Additionally, reporting to a seasoned expert or someone he is not related to would also provide a window of opportunity to learn the nuances and build professional accountability to an extent. This would also put Akshay directly on the front lines with others where he gets his hands dirty and learns from his own mistakes. By the end of the rotation, he would have a much better understanding of how the business works and be able to add value as he starts his training in the c-suite.
What doesn’t work –
First of all, this approach will not work for smaller businesses that don’t yet have different departments or functional heads. It would also not work for flat structures where the top boss is heavily involved in most aspects. Additionally, being the top boss’s potential successor means not only will Akshay not be able to escape his privilege, but will also be vulnerable to sycophancy and hidden agendas of others. Last but not the least, this is also a time consuming process. It’s not for those with less time or those who discount long term planning.
Source: Vecteezy
So which way does one choose?
While both methods have their own merits and de-merits, it would be better to choose depending on the amount of time available to induct and the scale of business. Should the time be short or business not yet at the level with different departments, it would be most effective to go the apprenticeship route. However, if one has time, vision and scale, then the management trainee model would prove to be superior given the rigor, detailed understanding of all aspects of the business and time to get into the groove of things.
So, if you are planning to join the family business, or planning to induct someone in, I hope this helps bring clarity and helps you make a more informed decision. Do write in and let me know how things go for you and if you would like me to explore any other aspects.
