From L-R: Anupam Bansal, Executive Director, Liberty Shoes Ltd.; Kishan Bherwani, General Manager, Kings Lifestyle; B. A. Srinivasa, Jt. Managing Director & Chief Executive Officer, Vivek Ltd. and G. Venugopal, Managing Director, Naidu Hall Family Store<\/p><\/div>\n

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In addition to integrating professionals in to the business, you need structures to socially integrate them into the family without compromising the family\u2019s social fabric.<\/p>\n

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Decoding this concept was the objective of the panel discussion on-Professionalizing Family Managed Businesses <\/strong>@ CRS 2013. Panelists for the session included \u2013Anupam Bansal, Executive Director, Liberty Shoes Ltd.; B. A. Srinivasa, Jt. Managing Director & Chief Executive Officer, Vivek Ltd.; G. Venugopal, Managing Director, Naidu Hall Family\u00a0and Kishan Bherwani, General Manager, Kings Lifestyle and\u00a0Moderator: B. S. Nagesh, Chairman RAI & Founder, TRRAIN.<\/p>\n

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How do family managed businesses handle transition?<\/b><\/p>\n

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\u201cRole mapping is the key in the transition to the second generation.\u00a0 You bring in \u2018professionals\u2019 only for specific areas of competence which are missing within the family\u201d \u2013<\/em><\/h3>\n

Anupam Bansal \u2013 Liberty Shoes<\/strong><\/p>\n

\u00a0Its not about whether a FMB is professionalized or not \u2013 its about getting the balance right between skills and experience.<\/p>\n

\u201cYour responsibility as owners is to handover a great business to the next generation.\u00a0 Professionals don\u2019t have this view.\u201d<\/em> \u2013<\/h3>\n

B S Nagesh, Founder TRRAIN<\/strong><\/p>\n

The single biggest difference between owners and professionals<\/b><\/p>\n

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• \u00a0<\/b>Decision making by owners can seem subjective \u2013 because they will consider hard and soft factors \u2013 \u201cSOPs\u201d and \u201crelationship\u201d factors.<\/li>\n
• On the other hand, scale requires standardization of process, policy and decision making.<\/li>\n<\/ul>\n

  \u201cProfessionals don\u2019t always bring in a sense of ownership –\u00a0 in such cases, the owners intuitive solution works better than the skill set of a professional\u201d \u2013<\/em><\/h3>\n

  G Venugopal \u2013 Naidu Hall<\/strong><\/p>\n

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  How do you empower the professionals?<\/b><\/p>\n

  \u00a0<\/b>\u201cThe debate is more about finding someone with the right mindset for the business \u2013 someone willing to learn constantly. He could be an owner or he could be a professional\u201d \u2013<\/em><\/h3>\n

  B A Srinivasa \u2013 Viveks<\/strong><\/p>\n

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  • Its critical to ensure that the professionals feel empowered. Information about the business including metrics and financials should be freely shared.<\/li>\n
  • Create processes by which owners and professionals are engaged in a regular, two way, dialogue. <\/b><\/li>\n
  • Consider remuneration structures which give the professionals a share in the value creation AND the risks of building a business.<\/li>\n
  • Once empowered, owners have to <\/b>\u2018<\/b>let go<\/b>\u2019<\/b> and let the pro<\/b>\u2019<\/b>s do what they are good at.\u00a0<\/b><\/li>\n<\/ul>\n

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    \u201cIn our case we have 9 family members running the business, but other family members set the measures by which we are measured as success or failure\u201d \u2013<\/em><\/h3>\n

    Kishan Bherwani – Kingslifestyle<\/strong><\/p>\n

    \u00a0Creating performance management standards<\/p>\n

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    • Decision metrics for family members and professionals cannot be different.<\/li>\n
    • When the business is growing, its easier to manage the creative tension between KRA\u2019s for professionals and family members.<\/li>\n<\/ul>\n

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      \u201cYou do tolerate a disgruntled family member more than you would a professional. You would let the professional go.\u201d \u2013<\/em><\/h3>\n

      G Venugopal \u2013 Naidu Hall<\/strong><\/p>\n

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