Regular board meetings very important for family-run businesses

Published On: September 6, 2016 12:10 AM NPT By: Republica  | @RepublicaNepal

Reg Athwal is the chairman of RAW Group & TAO-Inc Family Office, and the founding partner and MD of RTS Global Partners, the leading family business advisory firm in Africa, the Middle East and South Asia. He is also a World Certified Public Speaker in Family Business and is currently retained as a Global Trusted Executive Advisor by many large family-owned businesses and first generation entrepreneurial enterprises. Athwal has worked with over 100 family businesses, from two members to 53 members, from the 1st to 5th generation. Athwal who, was recently in Kathmandu to conduct an inspirational session titled “Unleash Your Family Business DNA” organized by the Entrepreneurs' Organization (EO) for the new generation leaders of family-owned businesses in Nepal, spoke to Akhilesh Tripathi of Republica. Excerpts:

What brings you to Nepal?
I'm here on behalf of the Entrepreneurs' Organization (EO) -- a global membership-based organization with a chapter in Nepal as well. About 35 Nepali entrepreneurs have become members of EO.  I have been an expert resource speaker for EO for the last 12 years.

Now, I am on a tour to South Asia. I just visited Bangladesh and now I am here. I will be travelling to 12-13 cities in India over the next two weeks. The purpose is to impact on a thousand entrepreneurs over the next two weeks.   

Basically, you are a public speaker and your talk apparently inspires businesses to do better. What do you talk to them?
There are two parts to what I do. Public speaking is one part. I am a world certified public speaker - one of about 500 in the world.  I am also a past president of the Professional Speakers' Association. So, it is in my DNA. I really enjoy that.  But, I use that as a mechanism to deliver content, my core business under the founder of RTS global partners. It is a global family business advisory firm with 50 partners. We have worked with about 108 family businesses till now.  

We have a brand called “Unleash your Family Business DNA” based on my research.

When we work with these families or also while delivering speeches, or facilitations and board meetings, we try to provide them stepping stones through case studies and right facilitation to create a legacy. Only three percent of the family-run businesses have survived past the fourth generation. Why is that? Some reasons include lack of unity and other family issues that come in such as sibling rivalry, and uncle and nephew relationships. We have identified around 20 such blockages. We try to ensure that our clients do not have to face such issues. We try to ensure that the unity in family-run businesses is intact and the talents of the new generation are used in the right way, and the right governance is there. This allows them to potentially build the legacy for another 100 years. 

You have worked with over 15,000 CEOs in 37 countries. Could you explain to our readers what kind of work is that? Is it the inspirational speeches or something else?
We are like a family doctor to our clients. They call us and we meet them regularly. We have impacted over 108 clients in 15 years. Similarly, our works have made impact on about two million people in 59 countries so far. They have really witnessed the content through speeches, workshops, master classes, and light conferences. One can't just work physically with all the CEOs. We have had tens of thousands of CEOs go through our master classes. We call it unleash your human capital DNA, a separate workshop especially for the CEOs.  

Do you believe that business is in the DNA of the people? Or do you think that they acquire it over the time?
We have something called a DNA model, created 15 years ago, which all our clients go through. So, it takes like two hours to go through each profile, one to one with each owner or entrepreneur. Once we've done it and people have something that we call innate talent, it comes as a part of their genetics. All of us have at least two or three of those talents.

Then there is a whole bunch of something that we acquire, we acquire a lot of it between the ages of 0-14. We get influenced by parents, grandparents, uncles or our first teachers; they influence us and based on our practice become our mentors over time. We acquire more of those skills as adults. 

You seemingly have worked closely with people in the SME sector. Can you explain it in brief? 
When you say SME, it depends upon the size. Typically, we break our clients down into tier 1, tier 2 and tier 3. A tier 1 client means businesses of USD 1 to 10 million dollar a year. Tier 2 implies to businesses worth around USD 30 to 300 million. Most of our clients are tier 2 clients. We have around half a dozen tier 1 clients which are typically a billion dollar classic families with like 30, 40, or 50 companies in their portfolio.  

Why do you think it is necessary to push the SME sector in an economy, especially not doing well, such as Nepal?
We think that the SMEs are the life blood of an economy. If more people don't become entrepreneurs and don't start new businesses, you don't have that ripple effect of innovation. And if you don't have that, you cannot create more jobs. SMEs are really very important for a country like Nepal. An SME could be a business started by a husband and his wife or a son, or it could be a son who starts the business leading the business to the next 50-100 years. That has a huge impact on the GDP in Nepal and it will end up benefitting thousands of people. All starts with the SME. That is where it leads to when one person says that I want become an entrepreneur. 

How can we ensure professionalism in a family-owned business?
Our research shows that 67 percent of family-run businesses do not have any formal board meetings. It is very important to hold regular meetings in order to become professional. In such meetings, formal agendas should be discussed, follow-ups are made, and people are kept accountable. The next thing for these companies is bringing in advisers, experts and non-executive and may be even international people who could sit on the board for one or two years and add value. These are the starting points for making a family-owned business professional. 

The ultimate test of  a family-owned business -- whether it's a professional organization -- is can the owners take a vacation of three months and the business experiences growth when they come back? This is the ultimate test of professionalism in any organization.

Therefore, is the dream team in place? Are the processes in place? Are the strategies clear enough? Do they have the authority and capability to drive that? Are there right people in the right roles? Are their financial challenges? The owners need to get the idea of a whole lot of things that are very necessary for the company to be completely professional.

What are the typical problems faced by family-run businesses when they start thinking big and start making expansion plans?
When it comes to really setting up a family business, one must make sure that the right investment decisions are made. Large companies professionalize by having a criteria for investment. They start diversifying as well to make sure that there is protection for the families. Some of them look for offshore trust funds. They require assets in other countries as well. To become professional, there needs to be policies in place with the whole family of how decisions are being made. 

Is there anything that you would like to share with our readers?
I look forward to coming back to Nepal and adding value to the family businesses and entrepreneurs in the future. The last message that I would like to give is to the young people here in Nepal to join entrepreneurship because sometimes, a 20 year old has better ideas than the older people in this field. 

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