3 next-gen entreprenuers explain the art of revving up legacy, family businesses
As Indian family businesses look to bounce back from the adverse economic impact of COVID-19, they look towards the younger generation of entrepreneurs to instill new ideas and adopt modern business solutions.
At YourStory's TechSparks 2021, a panel of second and third-generation family business entrepreneurs came together to discuss how they have been keeping their legacy businesses afloat and revving them up to meet new demand in the years to come.
Dhruv Toshniwal, CEO & Co-founder, The Pant Project; VP of Business Development, Banswara Syntax; Karan Mehta, Managing Partner, Ashok Oil & Food Products and Dr. Jalachari Ella, Director, Biovet Pvt. Ltd, joined Dipti Nair, Editor At Large, YourStory, in an insightful discussion on the topic.
What innovation means for legacy businesses
"With our life sciences business, we've seen success by focussing on R&D, but innovation happens even beyond the lab. With our food business, we've innovated by using cryogenics to sterilise and make our food products 99 percent microbe-free," said Jalachari Ella.
In fact, Dhruv has also brought innovation to his family businesses. Dhruv, whose grandfather set up a textile business decades ago, has innovated by launching a D2C brand - The Pant Project.
"We all want to take our family businesses to the next level, and the opportunity for building digital brands has never been better. But it is important to consider the legacy business continues functioning according to its strengths. So, we set up The Pant Project as a separate entity and allowed it to have the agility to work fast, fail, and improve," he said.
For Karan, keeping the business away from unethical practices that are common in the edible oils segment is critical to keeping it relevant.
"We started with sesame and coconut oil back when my grandfather started, and then we got into mustard and linseed oil. In the 90s, imports soared, and there was a chance to venture into refined oil. But we refrained from capitalising on a great business opportunity because refined oil is not healthy," he said, adding:
"Even now, decisions boil down to our core values that we've been following since the beginning as a family business. Companies in our industry always have chances to engage in malpractice, but we've fallen back on our values and always refrained from doing anything unethical. This approach makes us proud."
Importance of family values
Jalachari Ella and Dhruv Toshniwal echoed Karan's notion that family businesses continue to retain their core values despite changing market realities and new and modern business processes coming into the picture.
"We are a close knit family and our values transition to the workplace as well. We have full faith in our manpower and have low attrition, as we believe our faith can empower them to stand by us and lead us to success in the long term," said Jalachari.
Dhruv added, "Family values play a key role while building new brands as well. We've always focussed on having happy employees, because we believe they are the key to having happy customers. We also tend to take a long term view for our plans, compared to some startups that build stuff quickly but may not be sustainable in the long run."
Despite the prevalence of family values in day-to-day operations, the entrepreneurs admitted there still sometimes arise conflicts in the approaches taken by older and younger generations of leaders.
"Sometimes, it may be easier to hire an independent consultant and listen to them recommend ideas, than to listen to ideas coming from the new generation of entrepreneurs," said Jallachari.
As the panel concluded, the panellists also reached a consensus on the importance of open communication when it comes to succession planning in family businesses, and how this helps the business identify its core strengths and come up with a well-drafted plan for the future.
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