Family companies are making merit count

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Family companies are making merit count

Businesses get more professional and are encouraging scions to work hard before taking over reins

By Bikram Vohra (Between the Lines)

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Published: Thu 16 Mar 2017, 9:00 PM

Last updated: Thu 16 Mar 2017, 11:12 PM

Last week I had the rare opportunity to interact with 15 students from Northeastern University, Boston, who were on a visit to Dubai.
Until we met I must confess I had never quite heard of the quantum leap that has occurred in adding a professional dimension to taking over the company from Dad. For most of us, the mental image is one of the siblings just walking in one day when they are over 21 years old and becoming deputy MDs or CEOs and learning the ropes on the job. Once in a while, a more enterprising and forward thinking father or mother makes the child start at the bottom rung and get down and dirty. This we write up in media as very enlightening.
But actual courses in running family businesses have suddenly become hugely popular and important and are attracting global attention. 
Their relevance has taken centrestage and parents and the next generation both believe this is the be professionally integrated into the family business and actually earn a degree.
That's what these youngsters are doing: an exhaustive course in absorbing the pros and cons of taking over a family-run enterprise in today's highly competitive and technical environment.
Associate Vice-President Robert Dietrich, who accompanied the team, said the trend is moving swiftly upwards and many a university is planning to offer such courses.
"In the years to come and already pretty much on the educational highway the appreciation of learning in academia the subtleties and the ups and downs of taking over the reins is going to be much in demand course. We are already seeing this happening," was his take.
Choosing Dubai as a study area was logical. Family businesses here are offering multiple case studies in successful entrepreneurship.
The chasm between the old way of doing things and the modern way might cause some friction but an educational exercise over three to four years creates a solid grounding for young men and women to balance modern trends while protecting and preserving family traditions.
The students themselves, clearly affluent, seemed of one mind in that those days of just swanning in and grabbing the second best office are gone. There is just too much competition out there to see the bloodline as the main qualification. Family businesses can falter and tank, if they become insular, protect their own or be ruined by kitchen cabinet tactics, sibling rivalry and a deliberate but misguided attempt to dramatically change dad's way of working without really understanding why.
Family businesses are founded on trust and goodwill and a sense of personal commitment. These elements are essential even if the dreams are huge. And they come with their own sense of responsibilities.
Owners have to set the standard and work much harder than the people they have on their roles because they have to show the way and lead from the front. Schisms within the family must never be made public or else camps will form.
On the plus side if one can use the inbuilt acceleration of decision making, go for it without board clearances and the paper chase, reinvent family values to suit the script but don't mess with the core, you get a leading edge against top heavy corporations bent over under the weight of their designations.
Family feuds are probably the weakest link in the family business handing over. If they get out of hand, the impact is felt on all the employees because it becomes personal.
Courses in this genre have in the past five years moved away from mere lectures to proper curriculum with authentic degrees on offer.
Over dinner a group of students talk about how the course is helping them balance the knowledge of corporate functioning with that of running a family business that has been handed down from generation to generation and where decisions are made by the fam for the fam and outsiders are limited to support roles or trusty aides.
These young scions are clearly open-minded and understand the need for professional back up and the hiring of talent and giving it the power to exercise initiative. Human Resources has become integral to the running of a company and hiring and firing even in the family cannot be arbitrary if you wish to be successful.
Greg Collier, the Director of the D'Amore-McKim School Business is very clear that family businesses are no longer in a position to be seen as adjuncts. They are totally mainstream, make up a sizeable chunk of the global economy and can use their 'family value' systems to touch the stars.
Northeastern University kicked off this course in 2011 and it has been enormously successful. Other universities have done the math and found it sensible and lucrative. Perhaps one of the most interesting and positive developments is the softening in the older generation, who no longer see that romantic streak in 'get the lad in on the shop floor and let him learn' sentiment.
Technology and its breakneck speed have impacted on that mindset and families can no longer be closeted, blinkered or run a company from the dining table by making decisions as they pass the potatoes.
Even mom-and-pop stores are getting technically savvy.
I suggested the UAE is an ideal place to set up a course of this nature and it truly is. The only aspect that requires close study is getting a teaching faculty that knows the subject, not as a guest lecturer but as an educated and learned professor. Even in institutions like SP Jain at Academic City or College of Business at Zayed University, the awareness for such an option has risen exponentially and is available.
Since these young people are the pioneers it is certain that they could well be crucial element in the training blueprint and business school teachers could spend a length of time being inducted into a family business so they obtain that first hand knowledge of the texture of this new dimension.
Sooner than later they will be mainstream.
You want to take over the family business get the right degree. Earn it.
Bikram Vohra is former editor of the Khaleej Times

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