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Coaching & Mentoring Indian Entrepreneurs
Global ForumSingaporeJune 2011
Sentient June 2011 1
Enterprises by families
Globally contribute to 70 – 90% of GDP
North America: 80 – 90% of all businesses
India – 70% of the companies Organization of Economic Co-
operation and Development – 85% of companies in 33 member countries
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Survival rates
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45%
40%
35%
0%
20%
30%
25%
15%
10%
40%
12%
3%
2nd 3rd 4th
Generation of family
Family Enterprises
Sentient June 20114
Through the firm, the family influences every element of the strategy framework except the Environment and Market
Goal Formulation
Firm
Strategy Formulation
Environment and Market
FirmPerformance
Evaluation And
Adaptation
Strategy Implementation
Family
Key Dimensions of the Family Element• Family Values• Family interests• Family goals• Succession• Family business culture• Family members as managers• Siblings/Family relationships• Inter-generational issues• Non-family members as managers
The family element brings additional dimensions into picture, that influence the various elements of the conventional framework
Source: Adapted from “Strategic Management of the family business: Past Research and Future Challenges’, Pramodita Sharma, James J. Chrismam, Jess H.Chua, Family Business Review, Spring 1997
Intrinsic Challenges
Nepotism Overlap of family goals & business
goals Professionalism Succession Family feuds
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Why Coaching - immediate
Founder has not developed his successor 2 generations of the families have
difficulties communicating with each other
Senior leaders hired by the previous generation
Lack of clarity in roles & responsibilities
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Why Coaching – Longer Term
Economic downturn Global opportunities Imperative to learn & relearn
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Coaching Challenges Need for advisors is recognized
Validation of their own decisions No adequate follow through
Professionalizing Vs hiring professionals Family role not clearly defined Need for corporate governance
Succession Because of family Management skills Leadership development
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“Almost all companies start out as family businesses, but only those that master the challenges intrinsic to this form of ownership endure and prosper over the generations. The work involved is complex, extensive, and never-ending, but the evidence suggests that it is worth the effort for the family, the business, and society at large.”
—McKinsey Quarterly, Jan 2010
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