Parampara Family Business Institute

Overview

2

Agenda

• Objective and Vision of Parampara Family Business Institute

• Proposed curriculum and program structure

3

The reason for our creation is ….

Parampara Family Business Institute is conceptualized with the following rationale :

Social Endeavour to make a difference to family owned business community

especially the small and medium business enterprises.

Sensitize emerging family business in the value of good governance.

Contribute to the awareness, education, adoption and development of family

business governance.

Create Robust Sustainable family business for perpetuity.

Engage on thought leadership and research

Educate and evangelize the concept of family business governance in the

Indian sub-continent.

4

And in India Family Businesses play an important role

• Out of the nearly 1000 companies with market capitalization

greater than USD 50 million, 663 are family businesses

• Family businesses in India account for 70% of the total market

capitalisation and 57% of employment

• As they succeed they contribute to the economy of the country

because Family Business contributes 60-70 percent of GDP of

most developed & developing countries. India is no exception..

• The close-knit structure of families, which fosters teamwork

combined with respect to family values and family elders, has

been the key to success of many family businesses

Source from 2013

5

Challenges faced by Family Business

Most of the Business families face unique management challenges

because of the differences in the attitude & aspirations of family

members

As new generations join the family business, it is an enormous

challenge to keep the family & business together. Some sacrifice the

business to keep the families together, while others sacrifice the family

to keep the business

It has been observed that just 13% of the Family business survive till

3rd generation & only 4% go beyond third generation and one third of

business families disintegrate because of generational conflict

Source from 2013

6

• Creation of cadre of professionals in family business advisory

• Specialized training in the area of family business relevant to family members and professionals working with family businesses

Awareness & Education

• Conduct meaningful research in the areas of entrepreneurship and family businesses in India

• Consulting and advisory services to family businesses in all processes that lead to the establishment of family business governance and perpetuity

Research and Advisory

• Organize national and international seminars and conferences in the area of family business

• Provide a platform for the creation of special interest groups and exclusive networks of high net-worth individuals

Events, Conferences

and Networking

PFBI will be a vibrant hub of thought leadership & COE in family Business

The objective of the Parampara Family Business Institute is

7

This Not for Profit organization is owned and managed by GMR Family, with

focus on

Establishing itself as a reputed center for learning,

networking and advisory services in the area of family

businesses in the Indian sub-continent characterized by

High quality content & expertise

Trust & Integrity

Leading edge faculty and experts

Global Standards and Process

Social development

Philanthropy

8

Agenda

• Objective and Vision of Parampara Family Business Institute

• Proposed curriculum and program structure

9

To understand Indian market, a market survey using an independent surveyor

was done

• The survey covered 35 cities in India studying sample of 200

family members besides 50 family business advisers (like

advocates, chartered accountants who are rendering advice

in their respective area)

• Survey shows that there is a huge demand in India for

Certified Family Business Associates – about 1000 advisors.

However, there are currently hardly 20 advisors in India

• Absence of India based case study and thought leadership.

Body of knowledge is meager.

• Emerging generation is keen to professionalize family

governance

10

Based on the survey finding, we decided to design programs which will focus on the

family specific attributes of management

Strategy

Development &

Business

Management

Organization

Development

Leadership,

Facilitation and

Social Skills

Family

Relationships

Legal, Trust

Deeds, etc.

Philanthropy

Family

Governance

Family

Constitution

Family office

Setup

Business Family

11

Methodology of Implementation

Individual

Family

Group of

Families

Awareness

Mass

Program

Road Map

Program

Single

Family

Program

Advising

Through

Knowledge

Partners

Direct PFBI

Awareness, Education, Development and Adoption

CFBA

12

Hence, the Institute will focus on four main verticals

Parampara Family

Business Institute

(PFBI)

Education

Research &

Advisory

Services

Events,

Conferences

and Networking

Objective:

To generate Indian and Asian

Case studies to use in

programs

To provide Advisory services to

Family owned business on

Family Governance

Objective:

Connecting the

members of families

owning & managing

family owned business

in India for Knowledge

Sharing.

(Details in Next slide)

Objective:

Develop professionals

committed to

• Evangelize & helping

family business

• A Career in family

business advise.

Family

Entrepreneurship

Objective:

Developing

Entrepreneurs in family

owned business – next

generation

Incubators and

accelerators for future

entrepreneurs

13

Details of Education Vertical

Parampara Family

Business Institute

(PFBI)

Short Duration

Programs

Roadmap

Programme for

Entrepreneurial

Families

Participants

Family firms

Duration:

1. E-learning: 15

hrs (60 days)

2. Road map: 3-

5 days

Participants

Any stake holder

Duration:

2-5 days

Certificated

Family Business

Advisor (CFBA)

Program

Participants

Through

selection process

based on criteria

Duration:

8-10 months

Institution

Programme for

Channel

Partners

Participants

Bankers, Trade

Associations

Duration:

1. E-learning: 15

hrs (60 days)

2. Classroom: 2

days

Family

Entrepreneurship

Participants

Any stake holder

Duration:

8-10 months

14

Content level partners at Program level

Business Family Foundation our Primary alliance partner – Premium Global Leader in Family Business

Education for 25 years based in Canada.

They develop and distribute educational courses and tools worldwide for family enterprises and their advisors.

BFF connects us with powerful knowledge and multicultural experiences for the success of the family and its

enterprises.

FFI's mission is to be the most influential global network of thought-leaders in the field of family

enterprise. They provide research-based learning and relevant tools for advisors and consultants, academics

and owners to drive success.

Partner for Certificate program in Family Business Advising

EDI, an autonomous institution (founded in 1983) for Entrepreneurship Development and Training in India

and around the globe. Conducts several national & international training programmes; implements projects for

the state governments, central government and international organizations; & offers two unique Post Graduate

Programmes under its Centre for Entrepreneurship Education & Research.

Partner for “Trans-generational Entrepreneurship in Family Business”

15

Certified Family Business Advisor Programme

Course Objective:

This programme has been designed to equip professionals as credible and most-trusted advisors of the business family with tools

and skills for supporting their progression through changes in ownership, relationship transition and other developmental phases.

Duration: 10 months

Topics Covered:

• Family Business Universe

• Family Business dynamics-- people, systems and complexity

• Family Governance

• Family Relationships & Family development

• Succession Planning

• Next Generation

• Family Business Advisor

– Guidelines for Choosing Family Business Advisors

– Values & Roles of Family Business Advisors

• Family Philanthropy

• Management of Business (Mini MBA)

• Organizational Development

• Legal Aspects of Family Business

• Facilitation Skills

Academic Partner

* Course syllabus is subject to change based on market needs.

16

Certified Family Business Advisor Programme (continued)

Learning Methodology: Blended Learning Approach

• e-learning courses & assessments by Family Firm Institute Inc.

• video case studies by Business Families Foundation

• interactive classroom & group learning

• Practical & Experiential Training in Facilitation Skills

• Internship/Projects at the end of the course

• After certification, you will be invited to stay connected and continue to learn online through your personalized PFBI

portal.

The Professional as a Family Business Advisor:

• Professionals (like for e.g. Lawyers, Accountants, Academicians, Family Bankers, Venture Capital/Private Equity

Players) working with Family Owned Business can strengthen their understanding of the complexities of Family

Business through this programme.

• Those who seek to transform themselves into full-time family business advisors can benefit through this Programme.

• The certified professional will work as a trusted family business advisor who understands the business , family and its

ownership dynamics, thereby facilitating the path forward to the success and succession of the family and the

business.

17

Roadmap Programme for Entrepreneurial Families

Course Objectives:

This programme is specifically designed for members of Family owned businesses which offers them the flexibility of online and classroom

facilitated learning to equip them with insights, help diagnose and derive solutions to the unique challenges they may face in their family

firm.

Duration: 15 hours (60 days) of e-Learning followed by 3-5 days of classroom sessions.

Topics Covered:

• Introduction to the roadmap for Entrepreneurial Families

• The Interdependence of Our Family, Our Ownership and Our Business Entities

• The different Ownership Types for Business Families like Ours

• Relationship Transitions for Members of our Business Family

• What will our Family be known for in the Future?

• How can members of our Business Family deal with Each Other?

• The Planning Process for Our Business Family

• How can we as a Business Family Organize and Structure Ourselves?

• Our Succession and Continuity Leadership for the Family, the Ownership and the Business

• How can we coordinate these units within one system and in our Plans for the Future?

• Methodology: Blended Learning Approach

• e-learning course by Business Families Foundation

• video case studies

• interactive classroom & group learning

• After certification, you will be invited to stay connected and continue to learn online through your personalized PFBI portal.

• Exclusive knowledge sharing events for members of family business

Academic

Partner

* Course syllabus is subject to change based on market needs.

18

Institution Programme for Channel Partners

Course Objectives:

This Programme offers specialized training to Professionals like Lawyers, Accountants, Academicians, Family Bankers, Venture

Capital/Private Equity Players etc. associated with Institutions. These professionals can promote family governance systems to

their clients (Family Firms) as part of their family office organization.

Duration: 15 hours (60 days) of e-Learning followed by 2 days of classroom sessions.

Topics Covered:

• Introduction to Family Business

• Significance & Impact of Family Business

• Dynamics & Complexity of family business

• 3 Circle model: Ownership, Family and Business

• Understanding of Family business

• Family: Values, Legacy, Relationships, Business Culture

• Family Membership and Governance

• Vision and Values

• Family Models

• Family Constitution and Policies

• Legal Frame work of family constitution

• Why do I want to be a Family Business Advisor

• Role of an Family Business Advisor

• Managing Differences in Family

• How do I Segregate the market

• Suspect, Prospect and Closure

• Understanding the tool Kit.

• Role Play* Course syllabus is subject to change based on market needs.

Methodology: Blended Learning Approach

• e-learning course by Business Families Foundation

• video case studies

• interactive classroom & group learning

After certification, you will be invited to stay connected and continue

to learn online through your personalized PFBI portal.

Academic

Partner

19

Short-Term or Modular Programs

As different businesses and individuals have different requirements with respect to their educational and business gaps, they may

not choose to attend programs that are comprehensive in nature. Therefore, in order to provide a learning experience in

niche/specific areas of Family Business, the short-term or modular courses have been designed. These can be availed by

members of Family Owned Businesses as well as Professionals working with Family Firms.

Duration: 1-2 days

4.1. Succession in Family Owned Businesses:

Research on family owned businesses states that less than one-third of family owned businesses are continued by the second

generation when owners (managers) retire, and only half of those make it into the third generation. Though succession planning is

an important process for the ensuring the long-term continuity of the family firm, this aspect is either largely neglected or not

successful.

The founder’s feeling of immortality, the lack or abundance of appropriate successors, the lack of trust in next generation’s

entrepreneurial competences, and the fear of retirement by the manager (founder) are the main reasons why some firms don’t

think about succession (Leach 1991; Kets de Vries 1988; Scase and Goffee 1987). In fact, the CEO’s inability to let go is the

single most cited obstacle to effective succession (Sharma et al. 2001). Moreover, problems within the family can also lead to

failed successions among the family owned companies (Morris et al., 1997).

This course helps understand the process of succession, barriers to it and strategies for effective Succession Planning in the

Family Owned Business.

Academic Partners

* Course syllabus is subject to change based on market needs.

20

Short-Term or Modular Programs (continued)

4.2. Developing Next Generation:

A person will not be really happy in the midst of wealth, finding an enduring sense of satisfaction and meaning,

if as a consequence of having it, his or her unique individuality has gone undeveloped.

- Stephen Rockefeller

The development of Next Generation members in Family Owned Businesses involves:

• Aligning with the family’s core vision, mission and values

• Finding new passion & focus for business

• Developing self-confidence, competence and work ethics

• Discovering hidden strengths and potential

• Developing positive identity with wealth

• Revising strategy as per “Modern” business practices

• Fighting for position–within, across generations

• Acquiring skills and knowledge to make effective financial decisions

This course will help explore the opportunities and focus areas for the development of the Next Generation

members in Family Business.

21

Short-Term or Modular Programs (continued)

4.3. Professionalizing Family Business:

Most often, lack of professionalization amongst family run businesses tends to hamper their growth. Many

family businesses face the challenge of attracting and retaining professionals in the organization. Ultimately

only a set of “loyalists” stay back with the promoters over a period of time. Eventually, promoters are forced to

reward loyalty over competence.

This translates into a vicious cycle where:

• Family Business Owners don’t trust non-family member employees for taking decisions

• Non-family member employees tend to look out for better opportunities

• This in-return validates Family Business Owners perspective that non-family members cannot be trusted

This course helps identify & evolve solutions to overcome the challenges of Professionalizing the Family

Owned Business.

22

Short-Term or Modular Programs (continued)

4.4. Conflict Management & Resolution:

As a business family grows in size, more number of family members get involved in the business with different set of vision and

thought process. Ideological conflicts are therefore bound to happen at some point in time. In many cases, ideological conflicts

arises either due to difference of opinion or lack of communication or ego problems. In addition, conflicts in family businesses also

arise due to generation-gap; older generation's desire to preserve wealth and next generation's aspiration to diversify and grow.

Most often conflicts arise when the third generation comes into the picture. This is also commonly known as the “Third Generation

Jinx”.

This course helps understand and effectively deal with conflicts in Family Business.

4.5. Scaling Up & Expanding Family Business:

According to survey findings by PWC (2012), family businesses, like other businesses, are facing big pressures to start expanding

overseas in order to remain competitive. They are being driven by competitive pressures - or market openings due to innovation -

to get past their instinctual reluctance to avoid excessive risk and are entering into foreign markets.

Many family owned businesses have an aversion to leveraging their balance sheet or mortgaging physical assets which makes

raising growth capital difficult. Moreover, issues of ownership, succession, and the hiring of outside managers and unwillingness

for family members to relocate can present themselves as unique challenges for business expansion.

This course helps understand issues related to competitiveness and expansion for the Family Business and offer perspectives on

overcoming these effectively.

23

Short-Term or Modular Programs (continued)

4.6. Attracting Next Generation to Family Business:

Working in a strong family business can present itself both as a great opportunity or as burden for the next

generation. It is a daunting proposition to take over a company that was led so well by a parent. At the same

time, personal pressure to carry on the family business tradition is often felt. Attracting and engaging the next

generation in the Family Business is hugely dependent on the degree of emotional ownership experienced by

them.

So, how to foster emotional ownership among next generation? How to align the aspirations & passion of Next

Gen family members with the need to successfully lead the family business?

This course helps address the above and explore greater possibilities to attract next generation into the family

business.

24

Family Entrepreneurship

Businesses are characterized by efforts on the part of ownership to balance financial performance with maintenance of family

control and benefits for future generations. This dual focus can complicate the planning and decision-making process.

For family firms to survive and grow, they must pass on the entrepreneurial mindset and capabilities to create new streams of

wealth across many generations- not just pass the business on from one generation to the next. This practice is referred to as

‘transgenerational entrepreneurship’ or more simply, family entrepreneurship.

Topics Covered:

• Introduction to entrepreneurship and new-venture creation

• Managing the entrepreneurial Process

• Entrepreneurial Enterprises

• Conceptual frameworks & tools for identifying entrepreneurial opportunities

• Evaluating attractiveness for investment & commercial viability of the new venture

• Funding strategies

• Developing a realistic Business Plan

• Launching your new venture

In order to create and sustain the new venture, the incubation programme will facilitate the following:

• Review of the business plan

• Raise funding to set up and operate the business

• Provide mentoring and business resources and industry experts

• Provide access to networking opportunities with other new business owners especially Family Owned Businesses

Academic

Partner

* Course syllabus is subject to change based on market needs.

Thank you