Major steps and actions are taken to adapt to the changing market conditions and technological advancements in the family business industry
We are now in a new era that presents both unprecedented challenges and significant opportunities for family enterprises. The success of family businesses in this new era will be supported by their long-term perspective, financial resilience, loyalty to stakeholders, and commitment to positive social impact. However, certain characteristics such as a focus on privacy and control, a narrow definition of stewardship, prioritizing family harmony over unity, and resistance to change will need to be modified.
To thrive in today’s turbulent era, family enterprises will need to adopt new mindsets, strategies, and practices. It is crucial for owners themselves to lead the way from within, advocating for new directions and transformative actions to ensure future success. In India, family businesses contribute an astonishing 79 percent to the country’s GDP. Even during times of volatility and uncertainty, these businesses have demonstrated conviction and resilience. However, it is essential for them to embrace modern techniques and competencies in order to thrive in today’s fast-paced world.
Family businesses play a vital role in the Indian economy, contributing to business growth and stability. They represent an impressive 79 percent of the national GDP, with India being home to the third-largest number of family businesses globally, including 111 publicly-traded family-run companies valued at USD 839 billion. While it may be challenging to fully comprehend why family businesses require distinct treatment from other corporate entities, it is important to understand that these businesses are often built on unwavering values and principles. These values and principles enable family-run businesses to navigate challenging times through meaningful collaborations both internally and externally.
Family businesses are grounded in trust, integrity, kinship, and solidarity, which extends to their employees. Data shows that 78 percent of family businesses have made efforts to retain their existing staff in the face of adversity. Their resilience under volatile conditions stems from the fact that they do not solely rely on external entities for their capital.
There are several key areas for Indian family businesses to contemplate:
👉 Speed is essential in today’s fast-changing business environment. What used to be accomplished in 10 years now needs to be done in one. Agility is crucial in adapting to rapid changes.
👉 The era of small shops or factories is over. Scaling up is the new norm. Franchising, partnering, and collaborations play a significant role. Scaling rapidly has become a key factor for success.
👉 Mediocrity is no longer acceptable. With competition from all over the world, businesses are expected to deliver quality at competitive prices and in the shortest possible time. This necessitates the development of world-class competencies.
👉 The “alone we will climb the hill” approach is no longer viable. Collaboration is now essential. Businesses can benefit from capital from one source, management from another, and execution from a third. This approach allows for collaborations with experts from various fields, thereby reducing risks.
👉 Transform limitations into opportunities. Previously, staying within a small closed circle was seen as virtuous. For example, a textile trader may have seen no need to learn about developments in information technology. However, with the plethora of new advancements, it is crucial to remain open to new ideas and trends.
👉 Embrace globalization, be accessible, and be prepared to expand. Businesses that operate in multiple markets across borders have ample opportunities in the future.
Internalise technology, own your expertise, and keep upgrading it. No business in the world will remain insulated from the onslaught of disruptions. It is better to invest time, money, and energy in technology to keep the cutting edge in current times. There are five reasons why the future holds a number of golden opportunities for Indian family businesses.
We are bestowed with some of the finest business acumen in the world.
- We understand money and their cost consciousness gives an edge.
- The ability to understand and grasp technology fast.
- Fire in the belly.
- A dollar to seventy rupees gives a tremendous advantage.
It is time, for Indian family businesses to tighten their seat belt, thrust on full throttle, and aim for the world. All this is possible provided they listen. With their deep conviction in Lakshman Rekha, most of them still continue to neglect the world of opportunities and keep asking the question “Who moved my cheese?”
Also read our article on : How Family Owned Business Manage Capital For Growth and Expansion?
Empower and rejuvenate your family.
Families are the foundation of family enterprises. However, like any organization, they need to be actively involved in a compelling mission and revitalized in each generation to make meaningful contributions. It is particularly challenging in today’s world, where families are increasingly diverse in terms of values, lifestyles, and geographical dispersion. Family leaders must embrace and leverage this diversity to maintain family unity and tap into a diverse pool of talent. Building personal relationships, being open to new ideas, implementing formal inclusion policies, and providing a range of roles for family members to contribute to the family enterprise can all be helpful.
Engaging and inspiring the younger generations within the family is crucial, as they have different expectations and more choices in their lives than previous generations. Proactive and flexible approaches are necessary, such as involving them earlier in important discussions about the future, implementing talent development programs, and creating opportunities for cross-generational partnerships.
To make the necessary bold moves to succeed in these turbulent times, families must elevate their family governance practices. Specifically, family councils, which play a significant role in family governance, need to become more strategic and empowered to prepare families for the future.
Also Read Our Article On: How a Business Consultant Can Take Your Business to the Next Level
Leveraging Modern Advantages for Growth
According to the 10th Global Family Business Survey by PwC, 71 percent of family businesses with strong digital capabilities were able to adapt to new developments and change the course of their organizations on short notice. Digital transformation and diversification are key priorities for family businesses, as highlighted in a 2019 survey. These findings underscore the importance of digitalization in the context of family businesses. The figure above provides an overview of the top priorities for family businesses in India. While there is a strong desire among family business leaders to utilize modern tools and techniques to develop their organizations, there is also resistance to change. To succeed in their change initiatives, family business leaders need to be equipped with knowledge of current management best practices and cutting-edge tools for effective implementation.
Unfortunately, there are limited courses available that specifically address the requirements of family business leaders. Traditional business management certificates or courses may not adequately prepare leaders for the unique challenges of managing family businesses. Executive education offers an effective solution to address these needs. Times Professional Learning has partnered with IIM Calcutta to offer a Postgraduate Certificate in Family Business Management aimed at equipping top leaders of family-run businesses with the skills necessary to tackle the challenges they face in today’s dynamic environment. The family business program at IIM Calcutta is exceptional and aims to provide leaders with the skill sets needed to achieve their organizational goals and objectives.
Family businesses are deeply rooted in cultural values and community principles, providing them with a solid foundation. These values help family-run businesses stay resilient even in the face of market volatility. However, the COVID-19 pandemic has shown that traditional values alone are insufficient for organizations to survive and thrive in today’s fast-paced world. Augmenting these inherent advantages with modern tools and competencies can empower leaders to take their family businesses into a new era of endless possibilities.
A business consultant can be a guiding force for a family business seeking to navigate the ever-evolving market conditions and technological advancements. By conducting a thorough market analysis, the consultant can identify emerging trends, understand customer demands, and assess the competitive landscape. This information forms the foundation for devising a robust strategy that aligns with the business’s unique strengths and objectives. Additionally, the consultant can evaluate the family business’s existing technological infrastructure, recommend appropriate upgrades, and suggest innovative solutions to optimize operations and increase productivity. With their expertise and objective viewpoint, the business consultant can help the family business take major steps and actions that facilitate a seamless adaptation to changing market dynamics and technological advancements, ensuring sustainable growth and continued success in the industry.
If you want to expand your family business and unlock its full potential, Econstra Business Consultant is here to be your trusted partner! Our tailored strategies are designed to propel your business forward, seizing untapped opportunities in the market. With our in-depth market insights, you’ll stay ahead of the competition and make informed decisions. Embrace the future of business technology with our expert guidance on automation, digital transformation, and AI integration. Join the ranks of our successful clients who have experienced increased revenue and market presence. Take the next step towards success and contact us for a free consultation today. Let Econstra lead your family business to unparalleled growth and prosperity!
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Conclusion
Family businesses must adapt to changing market conditions and technological advancements to thrive. Success relies on a long-term perspective, financial resilience, and social impact. Owners should lead transformative actions. Indian family businesses contribute significantly to the GDP but need modern techniques to thrive. Collaboration, agility, and embracing technology are key. Empowering and engaging younger generations, digital transformation, and executive education are crucial. Augmenting traditional values with modern tools can unlock endless possibilities for family businesses.
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