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Strategies for effective implementation of family business constitutions

The awareness and prevalence of Family Business Constitutions (FBCs) amongst the business families in India is rising. While many families boast of meticulously crafted constitutions, a significant gap often exists between aspiration and reality. Despite their existence, these documents frequently remain dormant, failing to permeate at the strategic, operational, and even familial dynamics level. This article explores strategies for the effective implementation and bridging the divide between the aspirational ideals outlined in the constitution and the lived reality of day-to-day interactions, long-term strategies, decision-making processes, and familial aspects of harmony and togetherness. Strategies for Effective Implementation Cultivating Mindset and Behavioural Shifts: Central to successful implementation is a paradigm shift...

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Writing is easy, not living: Challenges in implementing family business constitutions

Drafting a constitution for the family business has gained popularity, with many wishfully viewing it as a cure-all for their current and future challenges. While creating a constitution is essential, families should understand it merely marks the initial phase in fostering a cohesive family business. In reality, numerous families face difficulties in actualizing the principles outlined in the document into practical, everyday reality. We discuss here the key challenges encountered in implementing a family business constitution. Concept of Family Business Constitution (FBC): There are fundamental differences in the two systems of family and business, necessitating clarity across various levels to ensure the enduring strength of the combined entity. Serving as a guiding...

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Family Business Constitutions Challenges and Implementation

Editor's Note: Mr. Anil Sainani is the Founder and Managing Partner of BAF Consultants, a niche consulting firm specializing in family business governance. He is an expert in the field of family businesses and has worked with 200+ family businesses in India, Nepal, UAE and USA housing developed capabilities specialize in advising on Professionalization and Growth of Family Business, Family Constitution Creation and Implementation, Coaching and Mentoring of Family Leaders and Ownership/Management Succession Planning. He has close to two decades of experience of working with Business families like Godrej, GMR Group, Dalmia Bharat, DCM Shriram, Kirloskar, SRF and others, and his cases are...

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Strengthening alignment in family businesses

Synopsis The real issues need to be addressed at the fundamental level. The issues are: a) misalignment of values between the promoters, the board and the management team, and b) lack of clarity in roles and responsibilities. After losing the test series, the Indian Cricket team also lost the one-day series with South Africa recently. While winning and losing are part of the game, the recent misalignment between the BCCI President and former Captain does raise a few questions about the impact of such differences on the field and on the game. We have also seen such scenarios play out in the...

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Learnings from Next Gen Family Leader’s Dairy

“Hosh mein toh ho? Yeh civil contractor ka kaam khud karna chahti ho?” “Are you out of your mind? You want to work as a civil contractor?” My real journey as a next gen family business leader started 10 years ago with this dialogue. It was the first instance of difference in opinion between me and my dad. I was frustrated and hurt. At that point, I just had to agree with him and move on. A decade later, I’m much better at managing such differences, reining in the emotions and juggling between the different hats of an owner, manager and daughter. Or at...

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Rekindling Broken Family Ties : Is it Possible?

“Do you still regret the way we separated from the family?” worryingly asked Preksha Oberoi. She had not seen her husband so anxious & overwhelmed for quite a few years now. “No, it's not about regret. I do agree that we all could have handled the situation better. It’s just that I don’t feel like revisiting those events, it's somehow very uncomfortable ” replied her husband Mahendra Oberoi. Mahendra was apprehensive about what was awaiting him the next day. He had to face his siblings and participate in a discussion that had caused extreme disharmony and resentment in the family years...

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Growth Through Sustained Alignment

“Do you want some more rice dear ?” asked Swati Gehlot. Raju Gehlot didn’t respond. Sitting at the dinner table, he was completely lost in his thoughts. His legendary 100 year old family owned and led company was in a major crisis. Based in Surat, Diamond city of India, Everest Group has been one of India’s leading companies specializing in diamond mining and industrial diamond manufacturing. The promoters of this group are the Gehlot family, a third generation family business. The business is currently led by Raju Gehlot. The Gehlot family is historically close-knit and all the members have received a...

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Creating Confidence for Critical Conversation

Last night I got a call from Bharat, a second generation member of promoter family (4 founder brothers in 1st generation having 3 sons in 2nd generation). All seven members were active in business. They had few businesses, including a listed company. Their combined businesses were worth couple of thousand crores. The four brothers in 1st generation had worked hard to create the business from scratch. The three sons in 2nd generation had also contributed in varying degrees to the success of business. As it happens in many Indian families, the ownership share of family members was not clearly discussed....

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The art of thinking independently together

Rousseau, the great philosopher said "Man is born free and everywhere he is in chains." Humans are indeed a unique creation of God, not just as individuals but also as an integral part of human society. Every new born is unique and unlimited. While the society teaches him lot of valuable lessons and ways to lead his life it often forgets to value his uniqueness and beauty. More so, at home, at school and wherever the child goes, there is a comparison with others. The child soon learns that I am incomplete, and I have to prove myself better than others. We...

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Togetherness expands Freedom

Fulfilling expectations and at times going beyond them, is love and caring in action. It strengthens bonds of togetherness. Expectations are the essence of relationships. In reality, there is no relationship without expectations – even in parent child relationship, there are moments when one has some expectations from his/her offspring. So, let’s accept the reality of expectations. Unmet expectations are the root cause of all pain, disappointments and breaking of relationships. The perceived burden of expectations restricts one’s freedom and weakens and breaks the bonds of togetherness. It is perhaps, the most important cause of breaking of relationships – joint families...

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