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March 2021 < Back

Transformative Power Of Women - A Differentiator For Family Business

Women have traditionally played a somewhat 'invisible' role in their family businesses, working behind the scenes in administrative duties, as informal advisors and moderators or focusing exclusively on managing their households. With gender stereotyping gradually making way for gender parity, women are now charting out a more defined role in family owned companies.

Gender stereotyping is often reflected in the nature of roles and decision-making. Even when the credentials of women in family firms are equal to, or better than, those of their male counterparts, it was not uncommon that other business stakeholders bypassed them and looked to their male counterparts for final decisions. There was often a misconception that women hold positions in the family business only because they are related to - the 'boss', and not due to merit.

Whether the business was passed on to the women in family due to a crisis (like unexpected passing away of the founder) or through focused preparation as the future successor, they have risen up to the challenge and overcome the barriers brought about by gender disparity & other challenges. In India there are numerous such examples of powerful women leaders who have transformed the business and delivered exceptional results.

Jyotsna Suri (Chairperson and Managing Director of Bharat Hotels Limited) took over the chain after her husband Lalit Suri passed away. At that time, the group owned six properties in India, which has now more than doubled to fourteen. Her son Keshav says "I think my mum played it so smartly, calling the hotel group after my father, so we always have an emotional connect, how much ever we might want to argue and fight, you can't really walk off because it is my father's name".

Lavanya Nalli (fifth-generation owner-manager of her 91-year old family-run business) spearheads the Nalli Silk Sarees as the vice chairperson, handling its e-commerce and private label business. "The core business of Nalli is silk sarees. I want to build on that," she says. Thus she started Nalli Next, with trendy designs with affordable prices, for younger, urban, working women. She was the first woman from her family to enter the business and since then has played an important role in adapting the business to changing customer preferences while at the same preserving & protecting the family's core values and legacy.

Vinita Gupta (CEO, Lupin Pharma) joined the family business (founded by her father Desh Bandhu Gupta) at the age of 25 after completing her MBA. She widened the horizons for Lupin through a chain of global expansions.

A wealth of research demonstrates that having women in leadership and strategic roles makes economic sense for businesses. More women in leadership means better financial and all-around performance. Publicly listed companies with women on the board tend to outperform those without in such key metrics as share price, return on equity, net income growth and price-to-book value. A gender-balanced board is also associated with better corporate social performance in community, customers, environment and supply chain. And these activities, in turn, improve business outcomes in areas such as risk management, corporate and brand reputation, and recruitment and retention.

The world's largest family businesses emphasize values and activities that keep family members and their employees more cohesive and engaged with each other and the business. This emphasis on inclusivity appears to be another reason they are more likely to bring women into leadership roles. Increased cohesion leads to better financial performance, and better financial performance helps make a family business more cohesive. When businesses put more emphasis on women in higher-level roles, that effect becomes more pronounced.

References:

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