Family businesses in Kerala poised for next-gen transformation, says CII-KPMG report

The next-generation leaders returning to Kerala are keen to lead family businesses with a vision for global expansion. The shift is fostering professionally driven mindsets and stronger governance practices, says a Confederation of Indian Industry (CII) and KPMG report titled ‘Kerala – Empowering Next Generation’.

The report highlights the dynamic transformation of family-owned businesses in the State. It was launched on Thursday and provides insights into Kerala’s entrepreneurial spirit driving innovation and sustainable growth across local, national and international markets.

A communication on the study said here that Kerala’s rich entrepreneurial history, tracing back to the ancient Malabar coast traders, continued to inspire the new generation. Kerala’s family businesses have showcased remarkable resilience and adaptability, thriving in diverse sectors such as health care, manufacturing, IT, and retail across India, West Asia, Africa, Europe, and the Americas, says the report, which underscores how these businesses have navigated complex markets while maintaining strong growth trajectories.

The report emphasises the pivotal role of the younger generation in ensuring business continuity and sustainability. With rapid technological advancements and a growing trend of next-gen leaders taking up board positions, Kerala is witnessing a paradigm shift towards a more professional, governance-driven business environment.

Effective succession planning is identified as a critical factor for the longevity of family businesses. The report reveals that while 80% to 85% of all incorporated businesses in India are family-owned, only 14% make it to the third generation and a mere 5% to the fourth. This highlights the need for structured and formal succession plans to preserve family legacies.

The report looks into the challenges faced during leadership transitions, including perceived disinterest on the part of the next generation and the senior generation’s reluctance to step back. It also explores the benefits of involving external professionals to facilitate smooth transitions and enhance business operations.

The report also stresses the importance of balancing formal education with soft skills development and practical business experience, both within and outside the family business. The report outlines various techniques for conflict resolution from mutual discussions to external mediation, ensuring long-term business success.

Published - November 28, 2024 06:50 pm IST