Tatwamasi Thursdays – Professionalizing the Business

For a few lucky entrepreneurs, professionalizing their business using strategic management techniques is an intuitive process. They instinctively recognize the crossover point after which the temporarily effective but untidy methods that have seen them through the start-up phase will actually become counter-productive; and that a carefully organized approach is now necessary to integrate all the parts of the business into a coherent and manageable whole. Their intuition also extends to telling them how this ought to be carried out.

For the less fortunate majority, the need for the transition is generally recognized, but not only at the level of a vague awareness that something is about to go wrong, and a feeling that a different approach is now required- but what? Recruiting outside professional managers or consultants to simulate the process of organizational development presents special problems in family firms because it is necessary to adapt the process to the needs of specific personalities in senior management and in the family unite. The central personality is generally the founder, and founders who do recruit outsiders are often unable to let them get on with their job independently. The obstacles include[1]:

  • Difficulties in delegating responsibilities.
  • Positions of authority may be reserved for family members.
  • Fear of loss of control by the family.
  • Lack of an alternative vocation available to the owner.
  • Family loyalty towards long-standing (but not necessarily proficient) employees

 

Professionalization involves decentralizing some processes and empowering management at various levels. Decision-making, therefore, would rest in the hands of not only the founder and family members but also with certain non-family members in key positions. This can be viewed as ‘loss of control’ by traditionalist and autocratic family business owners.

Unfortunately, there are no quick or easy solutions for owners and their families seeking to overcome these obstacles in the process of professionalizing their business. It requires a willingness to change, a strong commitment, and someone in the family who is prepared to lead the process and see it through.

 

 


[1] Leach, Peter, and Tatwamasi Dixit. Indian Family Business Mantras. Delhi: Rupa Publications, 2015. Print.

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