What family-led businesses should learn from the Singh brothers' conflict

Experts, who have studied family-led businesses, offer some lessons.

By E Kumar Sharma  
Thursday, September 6, 2018

"I can no longer be party to activities in which transparency and ethics are continuously and consistently neglected," Shivinder Singh said in a note shared with media to declare the move to disassociate himself from his brother Malvinder Singh. The Singh brothers are now at war. We have seen the feud between the Ambani brothers earlier and there are few other battles probably simmering in India Inc. As it appears, two promoters boxed together at the top, is not always a comfortable situation in the corporate world.

We spoke to experts, who have studied family-led businesses and they have some lessons to offer. The pre-condition is that every business needs to have ethical business practices in place; especially as no two businesses are the same. For example, Y K Hamied and M K Hamied of Cipla have worked out really well so far.

And those who know them, say that it seems to have worked because of their mutual respect. For G V Prasad and Satish Reddy of Dr Reddy's, role clarity and communication seem to have helped so far. The same is probably also true for the siblings at Lupin, with an added dimension of geographical business division.

The Dabur family, some find, stands out for its approach at separating ownership from management. Then, there is the case of Godrej, where the family leaders are involved in business but there are clearly defined areas.

The brothers at Parle carved out businesses, when the transition was made to gen-next. The Munjal brothers at the Hero group took different routes, and one of them exited and took family office capital to build new businesses. The Bajaj family also has siblings in every generation, dividing their turf along business lines.

But, as experts point out there are a few questions that all the leaders in family-led businesses need to ask; here are some of them.

1. Do they communicate enough?

2. Are there enough formal retreats and is there a dialogue?

3. How often are beyond business relationship reviews held to iron out minor differences?

4. Is there a role clarity between the two and are they making equitable impact on business?

5. As new generation joins in, is the elder or the patriarch ensuring role clarity for gen-next?

6. Introducing gen-next, early on to dialogue and formal meetings?

7. Is there a common agenda built on each person's needs to consult the other?

8. Do they have a coach/mentor to guide them?

9. Institutionalising the value systems helps. Something that is written to ensure deviations are not ignored and checked early on.

10. How important is personal ego? Is that being checked?

11. Do the dual leaders at the top, play to their strengths?

12. Trust is binary. Either you have it or you don't have it.

Some of these are easier said than done and perhaps more such battles can come out into open going ahead. But then, as we gather, getting alignment on business ethics and governance may be a good starting point and perhaps the best way to ring fence the business or the enterprise from personal differences.  

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