Three Keys To Sustainability in Family Business

On July 18-19, 2019, Sasin Executive Education was very pleased to welcome Dr. Sanjay Sharma and Dr. Pramodita Sharma from the University of Vermont, USA, to conduct the Sustainable Innovation for Family Business program for our enthusiastic participants. Today, we’d like to share some of the key insights from the class for Sasin Executive Education’s followers!

“Why some family businesses struggle after the founder’s era, while others thrive over generations?”

Dr. Dita started with this critical question before revealing that the nature of family business is very complicated. First generation owners have power to control the companies. However, when it comes to the second and third generations, the enterprises are increasingly involved with many family members such as siblings and cousins who have diverse personalities, preferences, skills, and needs that makes the process of decision-making even more complicated.

Dr. Dita also suggested that growing the family business for future generations requires continuous development and renewal possibilities in three zones. First, the “Incremental Zone” is when the company is selling the same products in an existing market. Second, the “Adjacent Zone” is when the company is selling the same products but in new markets. Finally, the “Radical Zone” is when the company is expanding the business towards new products and markets!

Next, we moved to another question:

“What can you do if you are in a family business that is being disrupted?”

Dr. Sanjay noted that “Customers buy solutions not products”, citing the envelope as a great example. Today, fewer and fewer people use envelopes in their daily lives; however, what people get with an envelope is not just a product but a solution for “transferring a message”.

Think about your products and services. What are the solutions that customers buy? Can you provide these solutions in other platforms or business models?

Dr. Sanjay also emphasized that family businesses have to step out from the narrow lens of marketing in order to see a wider view of renewal possibilities so that they can survive and thrive in this digital era.

Sasin also invited two guest speakers for the program: Jittapa Angkhasekvilai, the Assistant Managing Director and second-generation of the founding family of General Candy, the makers of Hartbeat; and Siradej Donavanik, the Director of Development and Projects and third-generation of the founding family of Dusit International (Dusit Thani Hotels and Resorts). Participants heard from both of them that the roles and responsibilities in family business need to be clear so that the employees will not get confused. They both noted it is also very challenging to deal with the digital divide between generations, especially in today’s data-driven world. How can the third generation convince the first generation that decision-making based on data is as important as wisdom, which is experience-based. The guest speakers suggested that time, patience as well as communicating the benefits of the enterprises can help solve this issue.

Thank you to all of the participants who were part of this program. We hope you can all go back and apply these insights to your family businesses.

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