KOCHI: The next generation of leaders is returning to Kerala to lead family businesses with a vision for global expansion, fostering a professional mindset and stronger governance practices, according to a new report.
With rapid technological advancements, an increasing number of next-gen leaders are taking on board positions, stated Kerala - Empowering Next Generation, a report by the Confederation of Indian Industry (CII) and KPMG in India.
The report highlights a paradigm shift in Kerala toward a more professional and governance-driven business environment.
Kerala's rich entrepreneurial history, dating back to the ancient Malabar Coast traders, continues to inspire new generations to innovate and expand their business horizons, the report noted.
Vishnu Pillai, Office Managing Partner - Kochi, KPMG in India, said, "Kerala's entrepreneurial landscape is at an exciting juncture. We are witnessing a new wave of young leaders poised to take their family businesses to unprecedented heights while upholding the values of their predecessors.
"There is a notable trend of next-gen leaders returning to Kerala to lead family businesses with a vision for global expansion. This shift is fostering a professional mindset and stronger governance practices," he added. Kerala's family businesses have demonstrated remarkable resilience and adaptability, thriving in sectors such as healthcare, manufacturing, IT, and retail across India, the Middle East, Africa, Europe, and the Americas.
The report underscores how these businesses have navigated complex markets while maintaining strong growth trajectories.
The CII-KPMG report also emphasized the importance of succession planning. "Effective succession planning is a critical factor for the longevity of family businesses. The report reveals that while 80-85% 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 said.
Nilesh Mody, Partner, M&A and Family Office, KPMG in India, remarked, "The successful transition of family businesses to the next generation is crucial for sustaining economic growth in Kerala. Our report highlights the importance of structured mentorship, effective succession planning, and professional governance in fostering a new era of business leadership. We are committed to supporting these families as they navigate this transformative journey."
The report also delves into challenges faced during leadership transitions, such as perceived disinterest from the next generation and the senior generation's reluctance to step back. It explores the benefits of involving external professionals to facilitate smooth transitions and enhance business operations.
Addressing potential conflicts is essential for maintaining family harmony and business stability. The report outlines various techniques for conflict resolution, from mutual discussions to external mediation, ensuring long-term business success.