Ajay Sharma, Director, Shree Baidyanath Ayurved Bhawan Pvt. Ltd.
My journey started with a very profound statement I heard when I was 30: 80% of family businesses do not survive the third generation, globally. It’s shocking when you hear this the first time. To top it all, I was the third generation in my family business and so there was a lot of burden on my shoulders.
At Baidyanath, our family is steeped in the tradition and knowledge of Ayurveda. We were exposed to these ancient scriptures and knowledge from a very young age. I drew an analogy to the trinity of Hinduism; Brahma – the creator, Vishnu – the preserver and Mahesh – the destroyer. My young mind said, hey am I Mahesh? Have I been born to destroy what my grand-father created and my father preserved? And, mind you, the business has to grow to preserve it.
But then my logical side of the brain said, 20% businesses have survived. They must have done something right or something right must have happened to them. The inquisitiveness to know about this made me move on in my journey. The lessons I learnt from my own business, the observation from other similar business around me and then ultimately studying 250-odd family businesses, some of them which unfortunately did not stay alive while some did and some thrived. The knowledge gathered has been concised in this book that I wrote – how to thrive in a family business.
It is important to understand what exactly is meant by a family business. So, if two brothers start a business, it is a mere partnership. It does not qualify to be a family business. Only when the young generation, the next generation, joins in this partnership that the institution of the family business takes shape. So, if the foundation of a family business is based on the next generation joining in, it becomes important to understand and manage this generational dimension.
Going back to the ancient scriptures, they talk about four ashrams – Brahmacharya, Grishastashram, Vanaprasthashram and sanyas. Putting this knowledge in the context of a family business, I devised a theory of four Ts in the life cycle of a family business. They are – training, transaction, transition and turning.
Training, we all start our life with it. We are born and we want to acquire some soft skills, some hard skills and there is a normal urge to get into the transaction mode. Nobody tells you this; you are just keen to do well and start fresh, get into transaction mode. So, T1 and T2 just naturally happen. Those of us I see here are in T3. They will see there is a natural progression that takes you to T4, sanyas.
The core disconnect actually appears between T2 and T3. Most of us do not see the dawn of vanaprastha and those of us who do are in denial mode. I have heard statements that: the business needs me or what will I do? Or I have milestones to achieve, I have to cross an X turnover or I have to take my brand global. Well, these are all excuses because these are all about I and Me. They are not about the family business or the family. So, it is important for us to understand that there comes a time of vanaprastha which has to be taken seriously. In this study, I realised that vanaprastha is the most important part in the four stages and the most critical and the least understood.
So, I would like to deep dive into it and discuss two points on Vanaprastha. Firstly, it is a fallacy that it is a one-day affair. One should not take it as a coronation of a king. It is not a kingdom; it is a family business. So, first we must throw this out that it is a one-day affair. The way we spend X number of years in Brahmacharya, in training, and Y number years in transaction mode, there is a Z number of years you need to spend in vanaprastha which is a transition mode and in the balance number of years that goes to sanyas. It is important to understand that. The second part which is also important is that you have to learn two arts – the art of giving and the art of self-exploration, self-fulfilment.
We Indians, from childhood, we are taught about charity and donation, we are taught to give away our toys, clothes, we donate to the orphanage, shelter homes and then our festivals are always about donating blankets etc. We are always giving away but vanaprastha says learn the art of giving back to society.
There is a big difference between giving back and giving away. Giving away is an act of generosity and giving back is an act of gratitude; one has to learn that to be able to live vanaprastha better. The second part is self-exploration. You have given enough of your time and money and everything to the business and the family. It is time to give that back to yourself too. You have to explore what you are, you have to get back to yourself. We may have some talent which may want to pursue. We may have a cause which we may want to back, we may have a passion, we all have some will to do something. This is the time! And believe me, I am going through my vanaprastha, if you do this and learn these two arts, your transition mode becomes extremely enjoyable and fulfilling. You actually learn how to pass on business to the next generation because you get into that role. Otherwise, you keep clinging on to it. So, transition is the core point which I discuss in this book.
The other part with those who will end up going through this book of mine, you will see that I mentioned in the four stages of life, we commit 30 actions which are the sins of a family business. So, I’ll not go deep into it but swim around it. Sins 1 and 30 are the eternal sins – it is the elder son syndrome and relinquishing ownership.
India is an agrarian economy and in agriculture, strength and muscle are important. The eldest one grows up and becomes the responsible one. Plus, we have been ruled by the kings and the queens over the century and they have a law that the eldest male heir will inherit the throne. Then we have the HUF where the eldest male will be the karta of the family. This is years and centuries of conditioning of our mind. So, while we moved from agriculture to business, our minds did not. It is important to understand this point and families have to stop committing this sin because while agriculture is about strength, business is about a sharp mind. While HUF is about continuity, business is about competency. And monarchy is about a figure head while business is about leadership and vision.
Relinquishing ownership is the next eternal sin that appears in sanyas. Believe me it is mandatory to relinquish ownership in sanyas. If you do not do that, you will not plan financial security for self and for independence. A lot of us hold on, that ownership is security. So, the case is clear, you have to have to do that, or you who are the asset of the company becomes a liability for the company because as long as you are there you try to see financial security. So, you must do this act to gain financial security. The Roman Catholic theology talks about seven basic sins and because of that all sins happen. They are known as the Catholic Cardinal Sins. In my book also sins 2 to 8 in Brahmacharya are the cardinal sins of a family business. Because of that, the balance of the 21 sins happen.
Sin 29 is close to my heart which is not having an exit policy. In businesses, and especially in India, we don’t have an exit policy for members. Here I am not talking about selling the business and monetizing it, it is having an exit policy for a single member. In fact, it is a taboo. I have heard authoritative statements like you are born here and you will die here. What appeared in my study is that it is taken as a value judgement on a family business. There is always a ring of suspicion, why is he asking for exit? Or a sense of betrayal. Believe me you cannot trap a soul in a family business. You cannot trap. It is advised not to do that and have a robust fair exit policy. You would also see that it gives you a leaner ownership to move on.
I will end this session with a small story from Mahabharat. By a quirk of fate, Abhimanyu got to know how to get into a Chakravyuh, unfortunately he did not know how to get out – the exit – and he died fighting that. When the news reached his father, he along with his uncles went on a rampage and destroyed the Kaurava Dynasty. I don’t want this to happen to any family business. So, you must never trap a person and you should have an exit policy. I rest my case!
Most of us would love to use Ayurvedic medicines but unfortunately it is told that there is a lot of metal in it as a result of which it is not good for the system. Your comments.
All the pathies have their strength. In Ayurveda, your culture had a knowledge of metallurgy and it came into the system when surgery was put off during Buddhism. A lot of R&D is still going on, the science exists. To share an anecdote, when I was 21 years-old, my father told me to go along a team coming from America to see how they view the system. One of them actually asked me, if we ate herbs and grass, leaves. He actually thought that we go to the trees and munch like animals. I told them, no, we collect them, process them and convert them into medicines. So, it is all about sharing the knowledge with your people and community. There have been great studies going on with the use of nano-technology to break down the metals. It will be out soon.
In the Singhania saga the father suffered. Your comments.
It is extremely simple, when we talk about transition, we go to T3, a transition is only of management and not of ownership. We make this mistake that transition is about giving away everything. One should not do that. Even I propagate in my book that in vanaprastha, in T3, only handover the management. Ownership should only be given once you ensure your financial security and that should be done in T4. This is what the learning is, always be clear with management and ownership. There is always an emotional part to it, but one has to manage it. one should not end up in such a situation after creating everything. It is only logical.
I am second generation and my daughter is already like when are you giving me more shares?
I must share this story, there was a husband and wife, the owners and the second generation and the third generation had two. So, they said we will start with 5% each to both of you and then every year as you perform you will get 1%. I said oh, that is a great way to do it. So, there are a lot more ways, you find your own way. each family has a unique solution.
Narendra Modi as a PM set up a huge Ayurveda ministry, has it done anything to propagate Ayurveda in a big way?
Ayurveda was always kept like a step-son but it was actually my uncle who put this proposal 35 years back that we must have a separate industry. Then you have people who are dedicated to the cause and that makes a difference.
Baidyanath is 100-year-old company, there are so many new entrants. How is Baidyanath innovating to be relevant and consolidate its market position?
In an industry, older brands do need to shake up and address the new situation. The competition is always welcomed. The new brands shake us up and that is why important, ultimately you also emerge powerful. There is no prescription in Ayurveda which does not have a Baidyanath medicine. That is our strength.