This archive report was first published on 8 January 2020.
January 8, 2020, marked a significant milestone for many family-owned businesses, as they navigated the complexities of building a lasting legacy. However, as numerous examples have shown, this is not always an easy feat.
While some family businesses have thrived, creating multibillion-dollar empires like Facebook and Walmart, others have struggled with infighting and financial difficulties. Locally, companies such as Bidco Oil Refineries and the Ramco Group have managed to stay afloat, but others have faced significant challenges.
One of the key challenges faced by family business founders is managing employees and developing talent. While they excel at building personal relationships, they often struggle to integrate new and long-serving employees into a cohesive company culture. This can lead to difficulties in applying talent-management processes, particularly when it comes to family members.
For instance, some leaders may override their leadership team's decisions about bonuses based on personal opinion, or fail to apply talent-management processes to family members, even if they lack the required capabilities. However, these challenges can be overcome by establishing a clear talent management philosophy and implementing consistent processes.
Best-performing family businesses establish committees to manage family talent, assign mentors, set clear criteria for assessment and advancement, and define a rigorous professional development strategy for family members. They also maintain the discipline to follow these processes without exception.
