Book Review: "Family Business: Methods and Essentials of Building Business Families"

“Family Business: Methods and Essentials of Building Business Families” by Dr Mohanakrishnan Raman offers a lucid understanding of family businesses, challenges and complexities while also presenting solutions and practical recommendations in a candid, point blank manner. Before I jump into a full-fledged review, a brief introduction of the author. Dr Raman is an Industrial & Organizational Psychologist with a PhD and has 22 years of wide-ranging experience in research, teaching, consulting, institution building projects and enjoys deep corporate exposure across Telecom IT and Banking sectors. In his debut as an author, Dr Raman takes a ground-up approach to explain the key tenets, methods and essentials for managing family businesses. The title, at the first look did not enthuse me much, but after completing the read, my thoughts are veering in another direction. Without further ado, let me get to my observations.

First, Dr Raman sets the context, flow and order right upfront. By doing so, he takes a well-defined, structured approach to listing down essential elements in a logical sequence. The first three chapters pivot around the softer or less technical aspects of family businesses such as family values, evolving family systems, cultural and demographic shifts and anthropological origins, to orient the reader to the topic. In the next three chapters, the author makes a smooth, but tactical progression to harder topics around succession planning, family constitution, family councils, family governance etc, while time-to-time weaving in the concepts from earlier chapters to reiterate the inter-linkages. The final chapter highlights the importance of family health and wellness – a subject that is rarely discussed in any business literature and not surprisingly ends up being the most ignored by family businesses.

Next, my initial inkling after scanning through the contents page was, this is going to be a dry academic exercise at best. But this isn’t really the case. Unlike most books in this genre that use fancy models and complex frameworks, it is not preachy. Instead, it brings out the simple, yet business-critical elements that are core to managing family businesses in a succinct manner - turning it into a ‘living guide’. While it touches upon the commonly covered topics to put things in perspective, the author delves deep into the less discussed, but arguably most important issues such as business hand over, family health, retirement plans and role of elders. The easy-to-read format, anecdotes and examples from personal experience sans blue-sky thinking offer a grounded and practical perspective.

Third, Dr Raman draws extensively from his experiences of consulting with family businesses and blends them well with case studies, interviews and tales-from-trenches which offer not just compelling insights, but also a grassroot level perspective. Facts always carry more weightage than fiction, more so when it is serious business. By narrating several instances of family conflicts and their outcome on the business, presenting the hand over road map designed for one of his clients, and sharing experiences from consultative workshops and OD interventions, he keeps the reader engaged in anticipation of newer discoveries. At the same time, he makes liberal use of references to earlier works of published research/studies and stats to validate his points.

Four, while the book’s overarching theme is essentials of family business, there are one or two distinct themes that stand out. There is a whole lot of new thinking around ‘reciprocity’, gratitude and the application of family therapy towards conflict resolution and intergeneration bond building. For some this may at first sound like a spiritual discourse, but as you understand and appreciate the delicate nuances and dynamics between family members (who are also business managers/owners), this makes a lot of sense. To me, the use of positive disposition (or positive psychology in the words of Dr Raman) to deal with something as complex as conflict management, isn’t just an easy fix, but serves as a gateway to build an equitable, strong and mutually beneficial relationship – a key to a family business’s long term success. As for the power of gratitude, not just anecdotal stories but numerous research studies have proven the its significance to influence day-to-day lives, relationships and businesses. MNCs, startups and private enterprises too encourage expressing gratitude to co-workers by way of post-it notes, e-cards or offsites meant primarily to appreciate and recognize employees – the feel-good factor.

Now the misses. The book focuses primarily on the state of family businesses in South East Asia and brings out the cultural/ethnic influences one of which is gender disparity – common across the region. The patriarchal family model is still the dominating one where female members of the family are not allowed to participate in the business, restricting them to managing care work and home chores. The book does not offer guidance on how family businesses should address this glaring gap, which is not just a moral and social issue but also a critical economic challenge. As per McKinsey study, advancing women’s equality can add $12 trillion to global growth by 2025. If family capital has to translate into wealth creation, nation building and employment generation, it has to place unequivocal focus on diversity & inclusion. Secondly, given the tectonic shifts in technology and markets, businesses are striving hard to innovate and many smaller sized firms are struggling to survive. As per PwC India Family Business Survey 2019, 54% Indian family-owned businesses say the need to innovate is their biggest challenge. Additional inputs on how family businesses should adopt innovative technologies and models such as AI, big data, cloud etc. and include the same in their family vision/charter would have helped.

Globally, as well as in India, family businesses contribute to over 70% of GDP. India currently ranks third globally in terms of number of family owned businesses with 111 companies, behind China (159) and the US (121), per Credit Suisse report. Most Indian family businesses were set up during the 1990s following the economic liberalization. Currently into their 2nd generation, many are facing headwinds from technological advancements, rising competition and recently the challenges brought on by the pandemic. It is all the more important for them to reset strategy, sharpen the focus and infuse high degree of dynamism and professionalism to win and grow. The book, in this regard offers the right ingredients to chart out their plans, reinforce their core values and retest their business models. It is a must read for family business leaders, entrepreneurs and consultants and a good read for students, academicians and researchers.