Passing the Baton – Easy or Not!

For any consumer-facing organization, building a strong distribution channel is the key to success. From small-scale shops in rural and semi-urban areas to large retail chains and e-commerce platforms, a good mix is what works. In the recent past, e-commerce seems to have taken a large pie of the growth, and here I don’t mean just the big giants but the retail chains have also launched their own e-shops with an omnichannel strategy to reach out to consumers in the most effective manner. So to gather more insight on the evolving dynamics and hear from my partners, last week I went on a market visit covering smaller towns.

As always, the visit was delightful and full of deep insights. While most of the offline retailers I met, had re-started their business and were seeing some traction from consumers, they were contemplating innovative ways to reach consumers and increase engagement.

During my visits to market over the last couple of decades, I’ve noticed how the potential successors of business houses, who have grown up in the digital era, are well-travelled and studied abroad have now begun to take over important aspects of their businesses to ensure sustainability in this evolving and hyper competitive retail landscape. The intent is to leverage the fact that a lot of consumers expect a “Touch & Feel” experience before making the purchase decision. On top of that, in small towns, in particular, the trust gained by the local retailer over a period of time, often brings back the loyal set of consumers to their stores.

However, my today’s musing is not about the evolving landscape of retail. It is about an observation or if I put it more appropriately, an emotion that I have observed during my meetings with partners where two generations are present at the same time.

Here I am talking about establishments where the first generation would have set up electronics retail in the 1980s-90s. Hard work of the first generation became evident with the growth of such retailers, either in the form of expansion of the number of outlets or dominance of a particular counter with a strong base of loyal consumers. Such was the case last week when I met one partner in Rohtak. A typical tier 2 city shop, with a dense display of products, utilizing every inch of the shop floor. As a mark of respect, the proprietor gave me a seat next to him while his two sons stood on the other side of the counter, both in their early 30s. As always, I struck a conversation with the proprietor and then noticed that he purposefully pulled his sons into the conversation, encouraging them to lead it. At that moment, I did not realize his intention and continued my conversation with the two very knowledgeable, committed, and enthusiastic young men. I was quite impressed with their understanding of micro aspects of the locality along with the trends impacting the industry and the country at large. During this conversation, the father’s pride was clearly evident in his sons, who were matching pace with the management of a large multi-national which also included expats and a couple of locals. Towards the end of this long but engaging conversation, the father shared his experience on how he set up the business from scratch in the upcoming new market, worked hard over the years, and is one of the leading retailers in the city. Now, with changing times, his sons are taking over the mantle to introduce efficient processes and practices. Referring to them as “Ram and Laxman”, the father exuded confidence in his sons by declaring that he was passing his legacy into the right hands. I concluded the meeting by congratulating him on two things. Firstly, his resilience and ambition on starting something from scratch and making it sustainable, when many can’t. Secondly, for ensuring he is empowering his very able successors at an appropriate time, for them to be able to take the business forward.

Insight - I’ve often noticed that the succession transition is quite slow and it is mostly because the first generation wants to safeguard the critical aspects of business and control it for as long as possible. While succession planning for large urban business houses might be very methodical, while it is sharper, quicker, and more of an emotional transition in small enterprises. The empowerment and delegation of authority are clearer and faster for the next generation. This is something to learn from as it is the next generation who will take the business forward and timely transition brings the right sense of responsibility.

The emotion which I witnessed in the eyes of the proprietor stayed with me during my drive back to Gurgaon and beyond. ?