I was recently conducting a session for management students who were specialising in ‘Family-Managed Businesses’. The students were second or third-generation businessmen who were doing the course to take the business started by their parents and grandparents to the next level of growth.
This reminded me of a verse from the Arthashastra: “The kingdom continues in the succession of his sons and grandsons, free from dangers caused by men.” (5.1.56).
One of the basic aims of Chanakya was that every kingdom should continue from one generation to the other, free of any danger. For this, he stressed the importance of good planning and training to make the inheritance of a kingdom a full-proof system.
One extremely huge advantage of such an inheritance system is that the king gets to pass on the mantle on his own terms: Choosing to make his exit before being booted out!
Now, how do modern businessmen apply this thought in their own firms?
Train your children
The first and foremost task for any organisation’s founder is to acquaint the next generation with the firm’s systems. There is simply no alternative to training your children in your own business. But, at times, it does not work well because the father may have very high expectations from his own children in business. And children may take a lot of their parents’ good advices for granted and ignore them.
One solution adopted in many communities is to train children in a business under the watchful eye of the founder’s brother. Thus, decent training is imparted while retaining family control.
Emphasis on education
It’s a fact that each generation has more opportunities for getting a better education than the previous generation. So, seniors should capitalise on this and make it a point to educate their children with the best courses available. Education, even in business, should never be treated as an expense, but an investment that will have very high returns in the future.
Exit in time
Once you know your children are ready to take charge, make sure you exit out of the business in time. Leave before you are kicked out by someone else! Now, this may not be easy for a person who has started a business from scratch. But there is no alternative to it. The best way is to give up power slowly and smoothly.
Remember, even the most iconic businessmen like Bill Gates and Narayan Murthy exited before time—an exit which did not mean ‘retirement’. All they did was change their role.
And you can do that too—changing your role from running the business to mentoring it. You will be more valued and respected then.
Dr Radhakrishnan Pillai is an Indian management thinker, author, and Founder of Atma Darshan and Chanakya Aanvikshiki. Dr Pillai has extensively researched Kautilya’s Arthashastra, the 3rd century BC treatise and incorporated it into modern management.
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