managing transition across generations l.
Skip this Video
Loading SlideShow in 5 Seconds..
Managing Transition Across Generations PowerPoint Presentation
Download Presentation
Managing Transition Across Generations

Loading in 2 Seconds...

play fullscreen
1 / 25

Managing Transition Across Generations - PowerPoint PPT Presentation

  • Uploaded on

Managing Transition Across Generations. Kishor Rathi Chairman Sudarshan Chemical Ind. Ltd. Feb. 2009. My Perspective. Succession in our family business How is succession affected in the absence of a clear post-retirement plan? How do we ensure that merit is accepted ahead of seniority?

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
Download Presentation

PowerPoint Slideshow about 'Managing Transition Across Generations' - EllenMixel

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
managing transition across generations

Managing Transition Across Generations

Kishor Rathi


Sudarshan Chemical Ind. Ltd.

Feb. 2009

my perspective
My Perspective
  • Succession in our family business
  • How is succession affected in the absence of a clear post-retirement plan?
  • How do we ensure that merit is accepted ahead of seniority?
  • How do we manage the challenges now?
introduction to our family
Introduction to Our Family
  • My grandfather - J. M. Rathi (1900-1976)
    • Silk merchant in Pune since 1920
    • Had six sons
  • Eldest son - L. J. Rathi (1916-2003)
    • Started Sudarshan Silk Mills Ltd. in 1941
  • Third son - Dr. R. J. Rathi (1924-2003)
    • PhD from Ohio State University in Chem. Engg.
    • Late Dr. Rathi and Late Mr. L. J. Rathi started a small pigment mfg. factory in 1952 with Rs. 60,000 capital
  • Today, Sudarshan Chemical Ind. Ltd.
    • Is one of the largest pigment mfg. companies in India
    • Sales of over Rs. 4 BN.
  • We have revenues of Rs. 1BN in group cos:
    • RIECO Ind. Ltd.
    • Rathi Lightnin Mixers Ltd.
    • Rathi Vessels Pvt. Ltd.
    • Prescient Color Ltd.
family culture
Family Culture
  • Male participants
  • All are either Chemistry or Chem. Engg graduates from USA, with many having USA MBA also
  • Work from bottom of the organization moving upwards only as per merit
  • Values: Financially conservative, Higher Education, Continuous Learning and Improvement, and Simple living
until 1990
Until 1990
  • Dr. R. J. Rathi (1924-2003) was the Chairman and Managing Director
    • Absorbed all brothers, nephews and son (more than 13 members) in different family businesses
    • Kept family together and his leadership was accepted by all family members on merit basis
  • Family business was a:
    • Sibling partnership
    • With many documented policies
    • With formal, conservative, and frugal atmosphere
first transition 1991 2001
First Transition: 1991-2001

SiblingPartnership – 6brothers



SiblingPartnership – 4familyheads

transition features
Transition Features
  • For some time:
    • Two Managing Directors and One Chairman
    • Irrespective of Seniority
  • Currently
    • Single Managing Director
    • Heavy Business Restructuring and Professionalization
    • Retirement of Senior Members from Accountable Positions
  • Business conditions changed from 1990 onward, (we are all aware)
  • Some family factions with different aspirations went their own way
  • Businesses required competitive focus and accountability
  • Family became more informal and perhaps less conservative / results focused
next transition 2009 2015
Next Transition 2009 -2015?


5FamilyHeads, 4 Sons


our experience
Our Experience
  • We have had no problems due to:
    • Very good understanding between members in second generation who didn’t break-away
    • Policy of relinquishing duties after age of 65
    • Realism by all in accepting leaders
    • Two MDs were decided much before transition and ratified by family members in advance – It was not a power sharing formula, merit based
potential issues
Potential Issues
  • Due to emotional attachment, founders find it difficult to relinquish control
  • Due to lack of post-retirement plan for the retiree, members do not know how to spend time after retirement
some basic factors for meritocracy
Some basic factors for meritocracy
  • No entry to youngsters without higher education
  • Culture of no special treatment to family members once inside office premises
  • No responsibility based role after 65 … only advisory role
meritocracy externally
Meritocracy Externally
  • Today 2 out of 3 divisions, and all shared service departments are headed by non-family members
  • Performance metrics are clear and are discussed openly in monthly meetings
  • Senior level promotions are discussed amongst senior staff and informal buy-in is generated within family as well as non-family members
meritocracy within family
Meritocracy Within Family
  • Today the most senior Rathi is NOT the Managing Director
  • Company interest is paramount in choosing business heads, and that is what family has done voluntarily
  • Senior family members have realized long-term needs and have stepped into advisory roles
next transition 2009 201520
Next Transition 2009 -2015?




current challenges
Current Challenges
  • Sibling partnership perhaps will change into a cousin consortium
  • Age difference between various family members is large although number of members has not increased
  • Business is ever increasingly complex and future challenges involve:
    • Global Branding/Geographic Consolidation
    • Consolidation in the Value Chain
    • Growth
    • Absorption of Young Family Members in meaningful roles
steps taken
Steps Taken
  • Acknowledged Need for Tackling Issue
  • Involved external guide
    • IIM Professor who has been associated with family for more than 5 years
  • Address Difficult Questions
    • Head-On
    • Transparently
    • Frequently (i.e. No Procrastination)
    • With Sensitivity to Family Members
broad framework with external consultant
Broad Framework with External Consultant
  • Family Council
  • Owners Council
  • Succession Planning
  • Family Mission & Vision
  • Encouraging Entrepreneurship
framework for succession
Framework For Succession



Individual Family Members

Career Aspirations

Future Org.


Individual Family Members

And Non Family Members

Skills, Knowledge, Experience


Leaders Needed

framework for succession contd
Framework For Succession (contd.)

Fit Assessment

Succession Plan


Training Needs & Education

Career Plan & Job Rotation