There is a saying, “your family is the best team you could ever have”. But mismanagements lead to the failure stories of many countries. One popular story of Tata Nano was that the automaker was under the misconception that the low price would be enough to motivate people to buy the Nano. So, bad marketing was perhaps the key reason for Tata Nano’s failure. The average consumer wants a smartphone that makes their life easier and functions well. Apple and Samsung realized this, which is why they took the company’s best innovations and worked on improving those. However, the reason behind LG’s failure is that it simply wasn’t memorable enough to users. So let’s take a look at the statistics of family-run businesses across the globe.
It is interesting that the US is the dominant country for the world’s biggest family-run businesses, a remarkable number of 166 while Germany is the second-largest center with 96. According to the price water house coopers survey (PwC), about 91% of family-run businesses in Bangladesh are mostly run by first-generation entrepreneurs. But Bangladeshi family-run businesses have more next-generation family members working in the business at 75%. However, 63% of the next generation working for the business is in the leadership team which is higher than the global average of 43%. So family-run businesses have been growing significantly in Bangladesh. We can see the above data shows the growing number of family-run businesses. But is it really a blessing or the other way round?
There are actually many successful family-run businesses in our country. So I would like to enlighten my readers with some magnetic examples. According to PwC, 97% of family-run businesses in Bangladesh have a clear sense of agreed values while they expect 91% of family businesses to grow in 2 years. Let’s have a look at a few of them. Some successful giants are A k Khan & Company. This company has one of the largest Bangladeshi conglomerates headquartered in Chittagong. It was established by Abul Kashem. Salahuddin Kasem Khan is the managing director and the CEO of the company. Now, let’s take a look at the Akij group. Sheikh Akijuddin was a Bangladeshi entrepreneur and the founding chairman of Bangladeshi conglomerate Akij Group and now the company run by his sons. Alim Industries Limited is another renowned and successful business run by the family. Mr. Alimul Ahsan Chowdhury is the managing director of Alim Industries Limited. He inherited the Alim Industry from his father Mr. M.A. Alim Chowdhury who started manufacturing small machine parts that evolved into a large agricultural machinery manufacturing industry.
Actually, family-run businesses have shown more success rates above the boundaries. Those exotic companies are Walmart, Fiat, Cargill, Combat, Volkswagen AG, Berkshire Hathaway Inc., Exor N.V., Ford Motor Company, ALDI group, Dell Technologies Inc., Reliance Industries Limited, IKEA group, L’oreal S. A., Mahindra and Mahindra Limited, and many more across the globe. There are some factors which made these companies successful. For example- Reliance Industries limited belongs to the Ambani family which has been known as the fastest growing and diversified company. As this company shows an upward sloping curve in crores within a period we can see the company follows proper guidelines, has appreciated the managerial skill and leadership quality. IKEA is successful because it has implemented a low-cost structure in its operations. Dell is a very successful company because it gives a customer the option of customization and also it has direct interaction with customers. This company has a very up-to-date managerial skill that shows its customer fanbase. Mahindra and Mahindra Limited were successful too because they were an instant success as the product quality was high and the pricing was right. This company follows proper guidelines to maintain product quality.
Till now we focused on the blessings of family-run businesses. But we all know, a coin has two sides. So yeah! Some companies suffer for their decisions too. Here we will discuss a few of them. Nokia, the young and energetic leadership of the company was the reason for its wide acceptance in the consumer market. However, over time, the excessive growth rate, loss of agility, and the lack of innovative leadership resulted in the failure of Nokia as the company on the strategic level. So Nokia fails on a strategic and leadership level. Instead of concentrating on its main business, several imperfect decisions, including investing in the power sector, have turned Otobi into a dying company in just 10 years. Another reason was a huge debt of loans. Their poor managerial skill and improper guidelines lead them to inhuman losses. As a result, weak leadership and unplanned investments have caused the company to sink. Another one is the latest e-commerce platform Evaly. This company grew on advances from customers against its promise to deliver products at a much later date that only deferred further, keeping hundreds of thousands of customers waiting for the products and causing the payments due to hundreds of sellers, who sold products to the platform on credit. We can see Evaly has very poor managerial and leadership skills. Apart from these companies, the Partex Beverage industry e.g. RC cola business faces a huge loss due to the entrance of foreign cola drinks or beverages in our country. In addition, recently many e-commerce companies like Eorange, Dhamaka, and Sirajganjshop.com are on the blacklist.
So we have encountered some curses and some blessings on national and international levels. So those examples clarify a family-run business does not necessarily always create an opportunity for legacies. But also creates examples for being inspired by adapting collaborative qualities. These qualities are the base of any business but when it passes from generation to generation it becomes an asset for a country or globally. In addition, the three important traits that must be practiced are professional-managerial skills, commendable leadership skills and following proper guidelines to maintain a family-run business.
According to my observation, stability is the significant difference when it comes to blessings or curses for a family-run business. Analyzing the successful business of Reliance company we get two lessons. One is unity is strength and another is success depends on individual potential. Let’s look at two scenarios for better understanding. When two brothers Mukesh Ambani and Anil Ambani were taking care of this big industry, they were leading individual sectors, where they made decisions according to their perceptions. There arise serious issues between them. So reliance has been distributed between them. It happens because there were two different leaders for one position. This indicates they fail to be united. Another factor was they already expertise in different sectors as per their interest. But Anil Ambani failed to learn the importance of that and snatched the sector from Mukesh Ambani which he wasn’t even interested in. Though Mukesh Ambani has the potential of managing a telecommunications industry, he built his own soon named JIO. Here we have another point: success depends on the potential of an individual. On the other hand, if we look at Rahimafrooz company Niyaz Rahim and his elder brother worked together to make their company a successful company and established their business internationally. In addition, their fourth generation has already entered the industry but working from the bottom of the pyramid of hierarchy and give an exclusive and ideal example of the family-run business. Thus, with all these observations we can say that the proverb, “Only one person in a million becomes enlightened without a teacher’s help”-and that is a true leader.
