Hay Group India Blog

Generational transitions are landmark events in a family-owned business’ (FOB’s) lifecycle. It nearly always takes an epic infusion of time, discussion, and emotion to find a point of intersection between the soaring visions of the founding first generation and an achievable reality for the following generation. In my experience, these factors interplay to often create disruptive tensions that drive actions.

As part of an organizational restructuring engagement with a mid-size manufacturing organization (which is part of a larger, diversified conglomerate), we found ourselves involved in a long debate on the top-level governance structure. (Mostly because it involved deliberating the role of the entrepreneur and the first-level of professional management).

Towards the latter part of our discussion, the firm’s chairman invited his son to join in. The son had been part of the conglomerate for three years and was primarily responsible for incubating and running businesses in the services space. Now the son was clear that he did not want to get involved in the day-to-day running of the businesses he was responsible for. His role, he said, was to build the business and the team, and provide oversight where required. Good teams, he added, should run day-today operations.

To make sure this happened, he had painstakingly ensured there was a proverbial “Chinese Wall” between the business he managed and the one under his father’s direct management control. To a large extent, this insulated employees of both the existing manufacturing company and the new services company from changes in management style. Employees of the newly-formed services company were able to create their own roadmap—with practices and values more aligned to the nature of the business and the targeted talent pool.

Contrast this to another Indian entrepreneur we’ve worked with, head of large manufacturing firm. He has always struggled with his management style. His personal preference was to get involved in the business only when there is growth opportunity; rather than take day-to-day administrative and management decisions. While his father was respected for his deep operational knowledge of the business, the son wanted to play the role of the classic investor-promoter and not the hands-on, chieftain role that his father had played. However, because he and his father had worked together closely for over nine years during his initiation into the business, he tried to inculcate his father’s style. This struggle between his natural preference and his father’s management style found him oscillating between two very different styles of management. As a result, his team received confusing, often conflicting, signals on what was expected. The cascading impact was so severe on the teams that the son managed that in a few years, his firm went through instability, lack of cohesiveness, and ineffective decision-making.

When two generations overlap for an extended period—like in this case—the inability to break away from tradition to create or to lend legitimacy to a unique management footprint is common.

Clearly, the first generation plays a crucial role in determining how the second generation and the employees experience the generational transition. Their messages and actions set the stage for the change. Their willingness (or lack of it) creates space for the next generation – a thought to ponder upon by captains of Indian FOBs.

Emotional Intelligence helps you measure and develop high performance behaviors.

Hay Group’s research, in partnership with Daniel Goleman and Richard Boyatzis, continues to demonstrate that emotional and social intelligence differentiates outstanding performers from average employees.

Emotional Intelligence (EI) helps you measure and develop these star qualities in your employees. It uses the Goleman and Boyatzis Emotional and Social Intelligence Competency Inventory (ESCI) – the most validated measure of EI behaviors on the market.

Ask any group of businesspeople the question “What do effective leaders do?” and you’ll hear a sweep of answers. Leaders set strategy; they motivate; they create a mission; they build a culture. Then ask “What should leaders do?” If the group is seasoned, you’ll likely hear one response: the leader’s singular job is to get results.

But how? The mystery of what leaders can and ought to do in order to spark the best performance from their people is age-old. In recent years, that mystery has spawned an entire cottage industry: literally thousands of “leadership experts” have made careers of testing and coaching executives, all in pursuit of creating businesspeople who can turn bold objectives—be they strategic, financial, organizational, or all three—into reality.

Still, effective leadership eludes many people and organizations. One reason is that until recently, virtually no quantitative research has demonstrated which precise leadership behaviors yield positive results. Leadership experts proffer advice based on inference, experience, and instinct. Sometimes that advice is which precise leadership behaviors yield positive results. Leadership experts proffer advice based on inference, experience, and instinct. Sometimes that advice is right on target; sometimes it’s not.

Like parenthood, leadership will never be an exact science. But neither should it be a complete mystery to those who practice it. In recent years, research has helped parents understand the genetic, psychological, and behavioral components that affect their “job performance.” With our new research, leaders, too, can get a clearer picture of what it takes to lead effectively. And perhaps as important, they can see how they can make that happen.

The business environment is continually changing, and a leader must respond in kind. Hour to hour, day to day, week to week, executives must play their leadership styles like a pro—using the right one at just the right time and in the right measure. The payoff is in the results.

These days we can take a good level of technical knowledge and intellectual ability in a given job for granted. These are qualities related to our IQ. Our Emotional Quotient (EQ) measures personal qualities such as empathy, adaptability and persuasiveness. These qualities are becoming more and more important in a world fragmented by technology and changing work structures. How important? We reckon that EQ is twice as important as IQ in determining future career success (not to mention what is does for your social life). And it can count for even more.

It’s a growing phenomenon. The emotional abilities of today’s children are dropping even as their IQ is rising. So Emotional Intelligence is becoming more and more important as a way of recognizing tomorrow’s leaders. A low level of Emotional Intelligence can actually hold you back; think of the boss who loses their temper. Out of control emotions can render the smartest people stupid. The smart thing to do is work on your EQ. It’s not a fad, it’s not a trend. EI is the result of a long history of analyzing social intelligence (otherwise known as ‘what makes people tick’).

Another demonstration of the value of Emotional Intelligence comes from the financial sector. Hay Group provided emotional competency development support for 45 sales people in the insurance industry. Our client gave high quality product and sales training to a matched sample of 45 other sales people. Their intention was to run a comparison of the two groups for a full year. They called a halt to the action research after seven months because the difference in sales results was so large that they could not afford to wait another five months before training the control group.

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Many employees are well motivated. They want to provide quality service to their customers but are hindered by weak systems, heavy bureaucracy and conflicting pressures. Organizations can function on this motivation alone, at least in the short term. But if employees lack the support and business processes to get their jobs done, they can ‘burn out’ from the effort of just trying to do a decent job. The result is a workforce of frustrated people. If employees are engaged but not ‘enabled’, around one-third of the workforce is likely to be making plans to leave. (This figure rises to a massive 76 per cent if employees are both unmotivated and not enabled).

Frustrated employees tend to behave in one of three ways:

1. Break through the performance barrier – through force of effort, some highly engaged employees find ways to overcome the obstacles to getting their jobs done.However these high-value individuals are at risk of burnout in the medium term,usually after about six months

2. Stop trying – other less driven employees reduce their efforts to match their limited opportunities to succeed

3. Leave – yet others will seek greener pastures where their strong motivation to succeed can be matched with more supportive working conditions. This creates an unfortunate drain of what is often an organization’s best and brightest talent.

On top of this ‘mindset’ challenge, there is also the issue of the survey approach itself. For surveys to deliver real ROI, they should be connected with strategy rather than be run as a standalone HR exercise.

When developing our client-specific survey solutions, we strike a unique balance between engagement and enablement to provide you with the information you need to take action.

By including both components in our surveys, we are able to provide clear direction on systemic issues as well as issues specific to what managers need to do to create effective work environments.