Indian family businesses: Power of legacy and driving it forward
The Forbes India special package captures the phenomenon of how the next-gen is bringing in fresh energy and ideas into businesses that have evolved over decades, even centuries
Depending on the research or analysis you stumble upon, you’re as likely to read pieces on the ‘three-generation rule’ as you are about the ‘three-generation myth’. The three-gen rule postulates that most businesses degenerate by the time the third generation of the family gets into the frame.
In the current Indian environment, this theory—which may have been founded in a localised study in the West—does not hold much water. Sure, there have been storied family empires that have crumbled over the past few decades, but that may have a lot to do with poor governance and increasing competition, both local and global, in a better regulated and liberalised post-Licence Raj era.
There are some other pretty universal reasons why family businesses could fail beyond the second-gen, perhaps the biggest one being that the scions lack the hunger and passion of the founders. Succession battles and resistance to change are a few other reasons for businesses faltering.
From the Tatas, Birlas and Godrejs to a bunch of contemporary Indian business families, there is enough evidence to suggest that private Indian industry has more than survived beyond the second generation. To be sure, a clutch of next-gen descendants is breathing fresh life into traditional businesses, by injecting technology and/or starting sunrise activities.
The Forbes India special package captures the phenomenon of how the next gen is bringing in fresh energy and ideas into businesses that have evolved over decades, even centuries. On the cover are two young women leading their respective conglomerates, both whose origins go back to the late 19th century, on a fresh course.
(This story appears in the 06 September, 2024 issue of Forbes India. To visit our Archives, click here.)
