Documente Academic
Documente Profesional
Documente Cultură
by
Rishabh Gupta
14PGHR50
by
Rishabh Gupta
Table of Contents:
1.0 Introduction4
1.1 Executive Summary..6
2.0 Milestones Achieved..7
3.0 Milestones to Achieve7
4.0 Appendix:
4.1 Interview Guide Prepared..9
1.0 Introduction:
The potential and importance of Family led Enterprises (henceforth mentioned as FLE) can be gathered
by the fact that more than 70% of Indias largest and most celebrated organizations were nurtured and
revolutionized by a small group of promoters and family members. The contribution of FLEs to the
Indian economy has been and will always be significant in terms of its growth as a revenue generator as
well as a major source of employment for a billion plus population of India.
By definition, a FLE is one in which the majority of the stake is held by the person who has formed or
acquired the company (by his/her parents, spouse, child or childs direct heir) and at least one
representative of the family is involved in the management and administration of the business. Family
businesses have historically been undermined and downplayed with respect to the Indian economy but
FLEs have aggressive future growth plans, which could give them the deserved recognition and highlight
the importance by doing the same.
The FLEs span from manufacturing, retail to automotive, construction etc. that shows the diverse sectors
it has presence in. Despite varied differences in their sizes, locations, industry sectors etc., there has been
observed a stark anomaly when it comes to their performance, point of view towards expansion and
internationalization and approach on the qualities that set FLEs apart from other businesses.
FLEs have fared reasonably well in the past years and remain bullish about their growth in the coming
decade. 74% have grown in the last few years and 36% are aiming at an exponential and quick growth
rate over the next 5 years. It is because of the inherent belief FLEs have that possess certain advantages
over their non-family organization counterparts when it comes to motivation, strong values and culture,
agility and speed in decision making as well as their particular insight and entrepreneurial nature of doing
business in the market they are currently operating in.
Focusing on the growth rate of the FLEs in India and the economic significance of such businesses to the
Indian economy as described above, an acute need is being felt to come up with a customized approach
towards meeting the various challenges, which will be discussed later in the report, which these FLEs
uniformly face across all the sectors in todays environment of increased competitiveness and constant
innovation. These challenges broadly include next-generation leadership development, succession
planning, professionalization and formalization of the systems and processes, talent and performance
system inadequacies etc. and these can be generally owed to the inherent patriarchal structure and the
dormant owner-management governance mechanisms of the family led enterprises in India. Coming up
with a customized approach to mitigate these challenges would help streamline the Human Resources and
other functions in these organizations and improve the viability and sustainability of the family led
businesses as well as facilitate the leveraging of the time and resources for the key aspects of their longterm strategy.
To cater to this need, Aon Hewitt has taken a pro active initiative thorough a FLE vertical constituted
under the Talent and Performance Management Division and has worked with some of the biggest family
business houses in providing them with a holistic solution to carry out Human Resource transformation
and interventions for the same with the objective of facilitating a culture of high performance and growth
in these organizations. It has been continually striving towards creating a more customized approach
towards revamping other systems and processes for the FLEs by leveraging its expertise, extensive
knowledge base and global presence spanning various countries.
In India, FLEs range from the small mom and pop stores to large corporations with varies business
interests. As their growth has been exponential and they have been striving to expand geographically as
well as demographically to better their products and increase their customer services to maintain a
competitive edge in the marketplace, they have been stepping out of their comfort zones to acquire
companies in new industries and geographies or just trying to grow organically through in-house
capability building.
But along with this comes a very unique set of challenges very specific to FLEs:
Managing diverse opinions of the family stakeholders, family dynamics, internal conflicts and
disputes etc.
Creating a succession plan for the family members to take over the business in the next
generation
Contrasting views and styles of operation between the older and the newer generation
Hiring non-family executives who may perceive that career growth, major decision making
authority and autonomy are solely under the purview of the family members
Regular access to capital to help the business grow and develop
Though a staggering 78% of the FLEs believe we have mechanisms in place to deal with family issues
and conflicts to avoid interference with the business side of FLEs, yet there are some very disturbing HR
issues which plague FLEs such as
-
It has thus been felt that certain HR interventions are needed to revamp how these FLEs function and
chart out a strategy and a robust transformation system to help them guide through the various stages of
the business cycle so as to optimize the organizational performance and facilitate its future growth. Hence
the objectives of the project were identified as below:
Identifying the major challenges FLEs face specifically with respect to the
Indian scenario
Customizing the core solution areas for the Family led Enterprises domain at
Aon Hewitt i.e. Performance Management, Diagnostics and Organizational
structure
Preparing a customized methodology, tool package, credentials and
ultimately a focused approach towards this domain
Preparing customized go-to markets for each of the core solution areas
depicting the Aon Hewitt approach and methodology towards solving the
challenges faced by the Family led Enterprises in India
4.0 Appendix:
4.1 Interview Guide Prepared: