Family-owned to Professionally Run Ventures

According to a Deloitte study, a staggering 85% of Indian companies are family-owned ventures. And yet, a vast majority of these businesses struggle to scale up and capture a prominent market share.

One of the leading paint manufacturing companies in India, Berger Paints shifted its model from family-led to professionally run more than a decade ago. The brand currently holds a 20.2% market share and is among the top 5 listed paint companies in India.

So, how did Berger make this happen? Is there a secret sauce? Like in the movie Kung Fu Panda, there’s no such thing as a secret recipe for anything. The secret simply lies in looking within.

When we meet our potential clients for the first time who are established businesses wanting to scale even further, we notice that there are great similarities in the potential issues that we identify. We have observed this across many of the established family-owned businesses we meet. Even at their scale, there are certain issues that they are yet to tackle in order to break the ceiling and turn into a professionally run business. Some of the things that we’ve observed are:

  1. Separation of control and day-to-day management. The job of the family is to envision the future of the company and drive the organization forward and not to manage day-to-day operations.
  2. The power struggle between the family members managing the business and/or the hired CEO.
  3. Lack of proper education, skills and industry experience when it comes to the newer generations leading the business.
  4. Informal and laid-back management culture.
  5. Lack of an external view, i.e., professional consultants to identify the actual core problems.
  6. Pressure to hire family members for key roles, with limited capabilities and experience.

These problems may seem very obvious, but there may be issues that are deep-rooted and in different directions.

If you’re the CEO of a family-owned business and you’re struggling to break that ceiling and become a market leader, there is more than what meets your eye. At Purple Oak Advisors, we work with you hand-in-hand and in the trenches, to identify the deep-rooted issues, strategize, and create solutions that eliminate those problems so that the company can transition into a professionally run organization growing at a quick pace.