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Leadership and team management in a family business

All great projects start with a single idea. The processes of starting up of a family business or a big conglomerate or a multi-national company are all quite similar to each other. It usually starts with a vision of the original leader. In the later processes however, the composition of the employment and the basic management styles differ slightly so as to suit the differing work environments.

Understanding family businesses:

Family businesses are commercial organizations that are actively run by different generations of a family. The management styles and decision making are usually influenced by the pooling in of opinions of all the generations actively participating. In such a dynamic situation, often it becomes important that the leaders get accustomed to new strategies for handling situations and people in a much better way. Learning about different strategies and carefully analysing what might suit their organization is therefore something all leaders should do.

In a family business, the leader has to make sure that the unity of family; united ownership and ownership support of the business are all present. The leadership is handled by a group of people. The most observed style of management is the autocratic leadership. In such a style of leadership, the subordinates usually have none or fewer powers. The next generation entrepreneurs are hired on the basis of inheritance and the mere familiar bond. The organizational structure is centralized and the authoritarian style is very prevalent.

Leadership and management: The two main faces of a business –

In a business, A leader is someone who develops and improves the strategies of a company. The main task of a leader is to be able to set the direction and motivate the employees to follow that. In addition to that, the leaders should also be able to manage and handle the work environment smoothly.

Management, on the other hand, mainly focuses on the handling of people and situations. Various organizations adopt different management styles to suit their company’s aura. Different management styles such as

1. Democratic style that considers the opinions of the other employees.

2. Authoritarian style that sets certain targets and expects the employees to meet them

3. Basic management style

4. Laissez-Faire style that allows the employees to work without being hovered by the manager, and advocates less administration from the management, also known as the “hands-off” approach, are adopted by various managements.

According to experts’ opinions, a healthy combination of these three styles of management proves to be profitable for a company.

The different approaches for leadership and management in family businesses -

The leadership and management of family businesses differ from the corporate model because it is influenced by several generations of family and culture and is based off a strongly tested and trusted business model. The work environment of a family business is friendlier than the corporates and that is because of the familiar bond and the very approachable aura of the leaders and the managers.

Given that these businesses are based in and among families, active participation is done by the leaders and the employees to understand each other and thrive towards meeting targets set up on the basis of the common good. In a family business, the goals of the organization and the individual usually match and resonate with each other. Teamwork is also given much more importance in these set ups.

In the general sense, the family elders usually comprise the leadership and management board. Parents and grandparents fill the role of leaders in most of the cases. In India, the big corporate businesses operated by families such as the Tatas, Ambanis, Birlas, Godrej, Bajaj and Jindals have all advocated effective leadership tactics for the overall growth of their organizations. Great leaders of the past have envisioned the growth of these organizations.

Quoting Ratan Tata’s leadership skills is an effective method to illustrate this. He aimed to lead the TATA group to grow into an international business. He worked hard to make it into a global brand. Ratan Tata is known for using ethical ways in the business.

However, it can be observed that even though the base of the management styles are influenced by age old beliefs and traditions, the approach of leadership and the delivery of command differs hundred folds. Leaders of the past preferred extensive meetings and based several decisions on the process, whereas the current leaders take a more modern approach. They prefer active feedbacks and weekly and monthly reports.

The leaders of today -

The leaders of today are more focused on making the work environment a democratic one and prefer the inclusion of the employees for various feedbacks and other essential processes.

The leaders of the past, however, preferred the supervision and the fulfilment of tasks and the meeting of the targets by the different people holding different positions.

One main task of young managers of the present is to be able to nurture passionate minds and actively guide and motivate next generations to realize their potentials and develop different skills that are favourable to be recruited.

Meetings are no longer secretive and exclusive to the board members, a fair percentage of the employees are included in the process of the decision making.

The young generation today, is also more focused in deriving a better framework of the official procedures and the laying down of agendas and rules in a clearer manner. The focus of today is to be able to make the work environment so welcoming that the next generation is more than enthusiastic to join the business.

Leadership, in its truest sense, does not advocate for the leaders to develop a set of traits. Leadership as a characteristic cannot be defined as the permutation and combination of a number of strategies.

Today, leadership is more involved in the ability to make two way communications and constantly reflect with the feedback. In the modern day, the multiple perspectives towards a problem and the multiple approaches to a project are actively considered.

The advantage of a family business is that it becomes a personal project to all the participating members. Each individual focuses on making the work environment warmer and more open to opinions. Carrying the business to newer, greater levels becomes a responsibility that the legacy bestows upon them. The experience of a family business is very wholesome, and that is because of the constant learning and participation of the family members in the office as well as the home environment.

However, keeping these two environments from clashing into each other is one more trait the leader must be evolved in. Allowing family clashes to disturb the work progress is the sign of bad management. A leader should be able to master diplomacy and peace of mind so as to avoid bias and commotion from him/her to the employees and vice versa.

This separation of work environments and successful avoiding of the clashes is considered very tricky but it can be made possible by the safe and warm support of the family members.

We can conclude by saying that the leaders of today are also involved in providing a flexible atmosphere. The autocratic behaviour of leaders if slowly dissolving and the whole organization is more involved in the process of management and decision making and much more concentration is being given to making the company go global so to be able to serve and communicate with consumers worldwide is very essential. Businesses are focusing more on making the organization go global and cater to a more diversified consumer base.

New age managers also realize the importance of sustainable development of the organization. Family businesses these days are more involved in the careful using of resources so as to allow the next generation to be able to work and feed themselves working in the same field. Gradually, the boundaries between the leaders and the followers are getting blurred and the decision making process is becoming more collaborative.

On the whole, family businesses today are much more socially aware and are aiming at practices that serve for futures to come. The age old practices are still considered as holy and as guidance and new techniques are also employed. Leaders of the new generation are focused on the development of new practices that are profitable for the functioning of their companies. A lot of effort is being put on managing the generations and their differences and thus creating a more interdependent work environment.

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