Professor K. Ramachandran, Thomas Schmidheiny Chair Professor of family business and wealth management at the Indian School of Business, Hyderabad, recently conducted a study on how the stock market responds to succession announcements from Indian family businesses. He found that the announcement of a new generation taking over pushed up stock value. “The reaction could be based on hope, rather than knowledge. Or it could be because the old guard in the firm has plateaued. Or the youngster is already a known quantity, and his or her specialized knowledge or experience builds confidence," says Ramachandran.

A confirmation to this study comes from the positive reaction of the stock market to the 2009 announcement of Roshni Nadar joining HCL, and Ashni Biyani joining the Future Group in 2007.

Family successors traditionally attain positions that would be unthinkable for anyone else of their age—and, arguably, anyone else in a different age. But the old suspicion with which the rich heir or heiress was viewed has gone today—in its place is a growing confidence that a generation under 35 is automatically more clued in, and more meritocratic than its predecessor.

“There’s a desire to professionalize businesses among younger generations that is definitely marked," says Paresh Kumar Vaish, managing director of consulting firm Alvarez and Marsal India. “Young successors are inducting new management and bringing in more qualified, younger people to their teams."

To Anil Sainani, a family business governance consultant whose experience includes succession planning for the GMR Group and the Dalmias of Dalmia Cement, the respect for competence has trumped stubborn Indian traditions of inheritance related to age and gender. Families, Sainani says, are “much more open to discuss women’s votes in decision-making."

The emergence of women in businesses is typified by the rapid and high-profile successes of women such as Nandini Piramal, executive director of Piramal Healthcare, and Devita Saraf, executive director of Zenith Computers.

Biyani has been in the news for bringing change to the Future Group’s internal affairs and its retail business with rapid success. Similarly, first-generation heir Pallavi Gopinath has taken Deccan 360 and father G.R. Gopinath’s vision into fresh territory by challenging the existing transportation and logistics monopoly in the aviation industry.

The new inheritors with whom Sainani works typify their age—all place great emphasis on communication and they want to move fast. These qualities interact unpredictably with the markedly Indian respect for experience. “There has to be a concrete plan in place to ensure that elders’ input comes in only when it is required or wanted by younger people. Anything else could be seen as interference, and rejecting that can create tensions," says Sainani.

Succession comes with inherent emotional contradictions. How does the family brand balance the idea of change with that of continuity? Who in a family business that may often have several inheritors, gets to “own" the brand?

The family governance plans of the Emami group, owned by two friends who have divided the company among their heirs in a way that ensures one heir of each chairman will always work with another, may seem utopian in this regard, but the partnership has been uniquely successful so far.

For the Godrej family or the Burmans of Dabur Industries, the tradition is even older. “Everyone is looking at the Godrej family, whose legacy plan has been in effect for the last few years, and takes into account the cumulative effect of several generations of families owning the business," says Sainani. “Aditya Burman is a Dabur heir, but doing something different in a biotech company of his own."

Inheritance and its dramas are integral to India’s public life. In politics and popular culture, the debate about its effect on the country’s future is contentious, even as third- and fourth-generation politicians and artistes take up family seats in independent India. The managing directors and CEOs who are under 35 today have much left to prove: rarely have they been publicly involved in company failures or made—or been allowed to make—mistakes in planning for the future.

The emphasis, Vaish points out, has been on developing their abilities. “Families are starting to build in work experience for new generations before they hand over the business to inheritors," he says. “Anant Goenka (son of RPG Group chairman Harsh Goenka), for example, is a deputy managing director at Ceat, where he can learn from managing director Paresh Choudhary. Nandini Piramal went to work at training locations around the world, before she came back home."

They have also left the irresponsible partying, the unwisely-voiced opinions and the disastrous attention-grabbing to their counterparts in Bollywood and government. The next few years, when elders transition out of the company and the new generation is left to keep their corporations growing and well-managed, will present ample tests of their abilities.



Executive director, Godrej Properties


Crossover: Godrej hopes to scale Godrej Properties up even as he contributes to the group as a whole. N Chandra/Mint

“Trust, quality, accountability." Pirojsha Godrej, executive director of Godrej Properties Ltd, ticks off traditional values that, he says, Indian consumers associate with Godrej. It may sound mystical, but to him, they are responsibilities attached to the family name.

With degrees from Wharton and Columbia, Pirojsha has worked up from being a management trainee in the company in 2004 to becoming part of Godrej’s new generation of leaders, taking over gradually from his father Adi Godrej, chairman, Godrej group. As the company pushes into new directions—one of which is Pirojsha’s own real estate division—the challenges of balancing old and new come with one advantage; Godrej has over a century’s worth of examples to guide him.

“I’ve been fortunate to work in a business where family members in earlier generations were forward looking and actively sought out new ideas, so I don’t think there are major generational issues," he says.

“In certain cases, people who are used to doing things a certain way are challenged by new and different ideas. This is a fairly normal occurrence at all companies," he adds.

The nature of corporate priorities has changed over time—philanthropy and environmental justice, for instance, have become public aspects of a company’s identity. This has been especially crucial to the Godrej group, Pirojsha says. “One of the areas I am trying to lead is ensuring that Godrej Properties is at the forefront of sustainable development. All our projects going forward will be LEED-certified (LEED, or Leadership in Energy and Environmental Design, is a green building rating system)."

Some projects have higher goals. “Our large township project in Ahmedabad was selected as one of only 16 projects from around the world to partner the Clinton Foundation in the goal of creating a climate-positive development."

So how does change come to Godrej? “The challenge and the opportunity going forward will be to take a few of these high-quality, medium-sized businesses that we have been so successful at creating, and try to make them among the most successful individual businesses in India. In the next 10 years, in addition to my role at Godrej Properties, I’d like to play a larger leadership role supporting the growth of the group as a whole."



Business development officer, Deccan Cargo and Express Logistics


In flight: Aviation has gone from being an option to a passion for Gopinath. Aniruddha Chowdhury / Mint

“Aviation was never on my radar until I met my father’s business associate at Airbus SAS, Kiran Rao. I was then (2006) doing an internship with BBC on media," says the 29-year-old, who is now the business development officer at Deccan Cargo and Express Logistics Pvt. Ltd that runs cargo planes under the brand Deccan 360.

Deccan Cargo is an express (small parcel) transportation and logistics company with dedicated cargo planes. Gopinath began to promote it after Kingfisher Airlines acquired Air Deccan in 2007.

Rao initially asked Pallavi to work with the communications department of Airbus. She did, for six months, and then moved to marketing. After her project internship at the customer support department of Airbus, she applied at ATR (Avions de Transport Regionale, an aeroplane design and management firm), and alongside pursued an aerospace MBA from Toulouse in France.

It was then, in July 2008, after two and a half years in France, that Pallavi got a call from her father. He told her to join his start-up, saying she could “learn in the profession".

On her father’s insistence, Pallavi started to work with ground logistics, warehouses and trucking before moving to aviation so that she could “learn and experience the frustration and exhilaration of doing business in India—in small towns and SMEs (small and medium enterprises)."

What is the biggest challenge before Deccan Cargo? She has one word for it—scale. “Setting up something on a large scale from Day 1 was a huge challenge," she says. She is now helping Deccan Cargo open retail outlets across the country to get “the scale". Deccan Cargo has plans for kiosks in at least 350 outlets of Reliance Retail Ltd, the retailing arm of Reliance Industries, along with building a multi-modal logistics hub in Nagpur.

“I want to make Deccan Cargo a household name—it should be available everywhere at affordable prices. Customers should have the choice," she says.

Like her father, Pallavi speaks of big ideas and extravagant projects. She talks softly, often pausing to collect her thoughts. It’s not the voice of a practised businesswoman but that of an emerging one, searching, yet confident and sincere.

Is dad grooming Pallavi? “Not at all," says the daughter. “He doesn’t interfere nor do I report to him. I report to the chief operating officer and head of sales," Pallavi says.

Gopinath says his daughter sometimes complains about the “pervasive corruption, the apathetic bureaucracy, the infrastructure woes and poverty, and filth of our cities. And how beautiful European cities are. But she realizes that it is as much her job to clean up the mess."

“The answer," adds Gopinath, “is not to escape to France or take refuge in cynicism or resentment. The way forward, despite insurmountable odds, is continued enthusiasm and inextinguishable optimism."

Gopinath remembers Pallavi once telling him, “‘Papa, we are not in a traffic jam. We are the traffic jam.’ I knew then that she had figured it out."

— PR Sanjai


Aditya Burman, 30

Managing director, OncQuest Laboratories


Start-up man: Burman’s role involves more business than biochemistry—for now.

But Burman isn’t doing too badly. For the managing director of OncQuest Laboratories, a cancer diagnostics firm, science degrees come in handy now and then. As for the business experience, he’s not a greenhorn. His last job was at Dabur Industries, which he owned.

Not exactly, of course. The Burmans took a collective decision some years ago that the family’s executive involvement in the company would come to an end. Today, they stay on as Dabur’s promoter family, but with a completely professionalized executive team.

“I handled sales and marketing for Dabur Pharma in Latin America," Burman explains. It was an invaluable experience when he came to OncQuest, a company set up by his scientist father Anand Burman, unconnected to Dabur.

In his managerial role, rolling his sleeves up in the laboratory wasn’t exactly an option for Burman. “There was a period when I wasn’t using my educational skill sets at all, but it helps to address so many gaps in the system as you go forward. It isn’t just about understanding the workings of scientific quality and integrity as they apply to what we’re doing: It’s about a conversation that is just about starting up in the whole industry."

Burman emphasizes the newness of the market, which then raises the question: Is there room for an old tradition, carried forward from the family’s century-old business? “Sure," he says. “We’re different animals, so there are some things that go forward that aren’t the driving force—financial decisions, for example. What matters are people. Dabur is a people-oriented group, which relates to how the company maintains faith in professionals to carry forward a vision."

Inheritance is tricky, he says, in spite of how fast things are changing and scaling up in India. “A key question to ask, alongside questions of how to link past and future is: What is happening to the people dealing with change right now?" he says. “It’s up to us—I’m much older than the rest of the generation of this family—to study what happens and to convince people of genuine change."

But the focus is on the future, on how to make OncQuest “a professionally run company that encapsulates the family ethos. I’d like us to imbibe all the plus points of the family tradition, and avoid all the minus experiences", he says.

The family brand, in Burman’s case, is one whose preservation depends on how older ideas can adapt to the needs of this “different animal". “We’re involved in public life in small ways, compared to Dabur," he says. “OncQuest cannot penetrate everywhere, as Dabur does. We do work in specific areas, addressing needs in hospitals, for example, in a few cancer-related charities, and in education."

In a country where even educated women in urban areas are unaware or apathetic about cancer risks, he says, “spreading awareness is a huge priority for us right now."

“I’d like to come in at the gaps surrounding healthcare, where solutions don’t mean getting in and throwing up some hospitals. Whether it’s awareness, counselling, patient handling, that’s where I’d like to come in, over the long term. It’s one thing to lay the foundations, but you also need to build a house on top of it."

That is precisely what Burman, foundation firmly in place, is in the process of building.

— Supriya Nair



Director, Emami group of Companies


Family guy: Being low-key is Agarwal’s preferred management style.

Emami (best known for its eponymous range of cosmetics, as well as medicine cabinet staples such as pain balm Zandu) began small, with a pact between two childhood friends and an initial investment of Rs20,000. Today, Radhe Shyam Goenka and Radhe Shyam Agarwal are joint chairmen of their fast-expanding concern, and Emami has business interests in a range of products. The Goenka and Agarwal scions—three each—all currently in their 30s, are directors with the firm.

Harsh Agarwal, at 34, is the youngest of the Emami heirs, and works closely on the divisions he heads with sister Priti Sureka, and Mohan Goenka. It sounds too much like an old-fashioned fairy tale to be true. “We’ve known each other forever, played together as children," he says, laughing. “I joined this firm when I was 19. All of us worked our way up together. That’s why it works."

Agarwal handles Emami Ltd, the consumer goods arm of the group, as well as Emami retail and media. “We have always been a cost-conscious company," he says. “We will continue that. We value commitment and transparency even against potential losses. And we don’t seek attention, because our performance should speak for us."

The main challenge for a firm with roots as traditional as Emami has not been to seek change, he says. “The challenge for any new generation is to understand what works in the traditional functions, and continue in that vein. There’s no sense of right and wrong between old and new."

He acknowledges that change takes work. The succession plan at Emami has included solutions like appointing an independent board of directors to advise the family, as well as internal management initiatives that help to identify common goals. But more importantly, they have avoided the pitfalls of internal conflict that have often marked the legacies of Indian business families. “With so many family members, clarity is important," Agarwal says. “It helps that we are a well-diversified group, so areas of overlap are uncommon."

With new projects in coal and power, Agarwal’s quiet emphasis on how well the company has done may seem a trifle understated. Change will keep coming, he says, but nothing outlasts one’s roots. “In the years to come, people are going to be our biggest asset," he says. “We will be more dependent on their efforts than ever before. Over the long term, my emphasis is on keeping them motivated, charged and committed—just as they are now."

— Supriya Nair



Director, Future Ideas


Photo: Abhijit Bhatlekar / Mint

The juxtaposing of her simplicity alongside her comfort in wealth is as seamless as the transition she has made from being her father’s daughter and a woman to playing a larger role within the group.

Her father, Kishore Biyani, chairman of India’s largest retail chain Future Group, with a market capitalization of around Rs10,000 crore, has led the retail revolution in India in the last decade or so.

Within three years of joining the group officially as a manager, the younger Biyani—who studied design from Parsons The New School For Design, New York, and did a summer programme from Stanford University—has come into her own as the director of the innovation cell of Future Ideas. Like her father, who was one of the early champions of creating a uniquely Indian retail model, Ashni is taking the philosophy to the next level—community retail.

“We believe that India must have its own idiom. It cannot be lifted from China or any other country. Our habits are different, we practise various rituals differently and so on," says Ashni, whose drive for regionalization is being reflected in store layouts, merchandise, products, advertising and marketing.

The strategy is to align with the intrinsic shopping habits of Indians—60-70% of shopping for apparel, consumer durables and home furnishing happens during festivals. At least 40-50% takes place during the peak festival season, between September and November.

The group has announced the unveiling of the next-generation Big Bazaar in 2011 and she is identifying the next set of differentiating features for the food and groceries value retail brand. Earlier this year, she launched Ethnically, a new retailing format for Indian ethnic wear and craft. Most recently, she launched Holii, a bags and accessories brand co-created by Hidesign and the Future Group.

The shift from Big Bazaar to Holii to other concepts, “is seamless", says Ashni. That is the whole idea of Future Group as well. “It is designed to be seamless. It is not designed to construct the mind in formats. The group looks at consumers eventually like it is one consumer."

Her father is “clear" of the family’s role and involvement in the business. “We will mentor, ideate, be relationship managers and not run the day-to-day business," he says. Kishore Biyani also maintains that as a woman, Ashni has the ability to delve deeper into issues.

Ashni’s growing-up years coincided with the inception and growth of the retail business. Post marriage, in November 2009 to Viraj Didwania, nephew of Anil Agarwal of the Vedanta group, Ashni is also looking to learn from her husband’s business about efficiencies and practices evolved.

“For me, work and life are not distinct. You don’t know when you simply flow from one role into the other," says Ashni, who refers to her team as “the gang" and her best friends or “buds" are all from the workplace.

Her only lament is that in the last year, she has not managed to get 15-20 days at a stretch to visit her favourite city, New York. But Ashni, who is known to have taken “hardly any days off" her busy work schedule even during the wedding and maintains a 12-hour day, quickly shrugs and says, “It really is not that bad".

— Sapna Agarwal