I am happy to see one more gen next member of TVS family- Mr Sudarshan Venu coming on board. Son of well known corporate couple, Shri Venu Srinivasan ( CMD TVS Motor) and Ms Mallika Srinivasan ( Chairman & CEO, TAFE), Sudarshan Venu has been appointed as an addl director of Sundaram- Clayton. I have lot of admiration for TVS group and its rich legacy. It always stands for Trust, Value and Service. Thanks to the active role being played by a number of Senior family members, the group companies are seeing a smooth succession. Sudarshan too comes with rich academic credentials. Twenty two year old Sudarshan is a smiling and simple person. I wish him all the very best for having a long, eventful and successful career in TVS group. I am also happy to note the return of Krishna Mahesh as COO of Sundaram Brake Linings. On this occasion, it is my share below my article on TVS group carried in The Economic Times ( Sunday ET) on Sept 17, 2006.
Synchronised for succession
17 Sep, 2006, 0138 hrs IST,V Balasubramanian, TNN
Once upon a time, long, long ago, there was a king named Bharata who ruled over India. One day King Bharata decided to appoint a successor from among his seven sons, but he found none of them fit to rule. So, he requested the Rajaguru to identify a competent person to succeed him as king. The king was genuinely interested in the welfare of his people and did not want his incompetent sons to succeed him. It is because of his great quality that the land he ruled has come to be known as Bharat Varsha.
Another time, another day. Centuries have passed, but the challenge remains. India's great family business dynasties that continue to dominate the economy, and account for two-thirds of India's industrial output, are facing up to the challenge of succession planning, in the wake of economic reforms, now well-entrenched in its 15th year.
Experience shows that even for those who have succeeded in finding a successor, inheriting a family business can mean big trouble. North India, the battleground or Kurukshetra, is littered with corpses of what used to be the country's premier industrial dynasties. South India, the other citadel of dynastic business, though spared a holocaust, is no exception either.
There's an exception though — the 94-year-old Chennai-based TVS group. As the patriarch of another leading city-based business dynasty says, "TVS is the best example of family leaders taking the lead and running their business with the support of professionals."
Despite its $3 billion-plus topline, TVS is not projected as a cohesive corporate monolith. Yet, it has a holding company — TV Sundaram Iyengar & Sons, that originally promoted leading auto component companies such as Sundaram Clayton, Sundaram Fasteners, Sundaram Brake Linings, Brakes India, Wheels India, Lucas-TVS, and TVS Srichakra.
Members of the four TVS families — TS Krishna, TS Srinivasan, TS Rajam and TS Santhanam — are on the board of the parent holding company, TV Sundaram Iyengar & Sons. While independently managing their companies (see chart), the elders have found innovative ways of grooming and inducting the nextGen into business.
Worldwide experience shows that family businesses generally thrive under the first, decay under the second and whither under the third generation. Family business, researchers say, usually the third generation, loses management control over business and only 3-4% survive and prosper.
TVS has bucked the trend, successfully retaining hold over its traditional business of auto components for four generations. The group has also fortified its presence in the manufacture of two-wheelers and computer peripherals, besides financial services such as truck financing, insurance, mutual funds and housing finance. It has also diversified into the new BPO business.
Corporate watchers recall that when the most of corporate India was passing through turbulence between 1996 and 1998, with numerous shakeouts, business and asset stripping, disinvestments, closures, sickness, M&As and the like, the TVS empire remained robust building on its core competence. The companies sustained their profitable operations and paid handsome dividends.
What's more striking, the TVS group companies underwent a smooth transition into the 21st century business arena. They did not suffer when the parentage of their global partners changed following worldwide M&As in the automobile sector. Wheels India, Axles India, Sundaram Clayton, Brakes and Lucas-TVS continued to thrive. The only exception was the spat between the group and Suzuki Motor of Japan. Yet, following Suzuki's exit, TVS Motor emerged stronger by widening its product range with in-house R&D and increasing its marketshare in motorcycles.
How did this happen? Analysts say the group stuck close to its knitting, grooming professional managers from within the family while retaining the services of professional retainers. Says T Kannan, MD of Madurai-based Thiagarajar Mills, "The TVS family has addressed the issue of inducting family members in a well-thought-out fashion. They have good processes in place. Youngsters are always inducted at the junior level and they work their way up. All of them come with a rich and varied experience. This contributes to the successful induction."
At the dawn of the liberal era, in 1992-93, the group's turnover was Rs 3,000 crore. It touched Rs 5,500 crore in 1997-98. Riding the automobile boom, the Group's turnover zoomed further to over Rs 12,000 crore in 2004-05. In 2005-06, it is estimated to have crossed the Rs 13,500-crore mark.
Prof John L Ward, co-director, Centre for Family Enterprises, Kellogg School, who was in Chennai last year, said, "Business leaders from the family should motivate, track, guide and induct generation next into the business."
At TVS Group, this is what's happened precisely, though a bitter legal feud broke out between the TVS cousins in 1993 over one group company trying to enter the product line of another. But, soon the cousins declared ceasefire and with business interest overriding everything else, the families started focusing on building their brands. Senior family members are reluctant to talk on succession planning. But one of them nevertheless told SundayET, "There is no dearth of talent. We are sure the next generation will live up to the rich TVS tradition of trust, quality, value, service and discipline."
Family watchers say the fourth generation has been inducted at the most opportune time (see chart for who does what). TVS companies are no longer conservative. They are dominant market players busy setting up projects in the rest of India and abroad. They are also looking at more M&As and JVs as part of globalising their businesses.
Insiders say there is no dearth of bonhomie between the cousins and they regularly meet and discuss strategies to step up exports and globalise operations of group companies by leveraging the strong TVS and Sundaram brands. In the past couple of years, at least half-a-dozen nextgenners have either got elevated or joined leading companies after pursuing higher studies and working abroad.
Till not long ago, Srivats Ram, son of S Ram was steering Wheels India as ED. Now, he is the company's joint MD. His cousin, Harsha Viji ( first son of S Viji, who is brother of S Ram) has joined Sundaram Finance group as senior vice-president. Harsha's brother Sriram is studying abroad, and is expected to join the family business soon. At Sundaram Fasteners, Arathi Krishna, the second daughter of CMD Suresh Krishna has become ED. She began her career in 1990 as a management trainee and became general manager in 1993.
Arvind Balaji has joined Lucas-TVS as VP-business planning and will eventually succeed his father, T K Balaji, MD of Lucas-TVS and other companies. Krishna Mahesh, son of K Mahesh, has joined Sundaram Brake Linings as ED. He has a distinguished academic background having acquired MS in mechanical engineering from Standford University. He worked at McKinsey & Co between 1998 and 2001 and trained intensively at Toyota Motor from 2001 to 2003. Mr Mahesh did his MBA from Harvard in 2005.
His sister, Shrikirti Mahesh is working as senior manager, technical at SBL after graduating in engineering and working at Toyota Motor. TVS Motor CMD, Venu Srinivasan's daughter, Lakshmi Venu too is working in the company as part of her PhD in engineering management at Warwick University, the UK.
Says K Mahesh, CMD, SBL, "After his 11-year stint, I wondered whether my son (Krishna) would join me. I am happy he is working in the company. Today's generation is well-educated and well-informed. But, as in the rest of the industry, the biggest challenge is to attract and retain talent."
----------------
Synchronised for succession
17 Sep, 2006, 0138 hrs IST,V Balasubramanian, TNN
Once upon a time, long, long ago, there was a king named Bharata who ruled over India. One day King Bharata decided to appoint a successor from among his seven sons, but he found none of them fit to rule. So, he requested the Rajaguru to identify a competent person to succeed him as king. The king was genuinely interested in the welfare of his people and did not want his incompetent sons to succeed him. It is because of his great quality that the land he ruled has come to be known as Bharat Varsha.
Another time, another day. Centuries have passed, but the challenge remains. India's great family business dynasties that continue to dominate the economy, and account for two-thirds of India's industrial output, are facing up to the challenge of succession planning, in the wake of economic reforms, now well-entrenched in its 15th year.
Experience shows that even for those who have succeeded in finding a successor, inheriting a family business can mean big trouble. North India, the battleground or Kurukshetra, is littered with corpses of what used to be the country's premier industrial dynasties. South India, the other citadel of dynastic business, though spared a holocaust, is no exception either.
There's an exception though — the 94-year-old Chennai-based TVS group. As the patriarch of another leading city-based business dynasty says, "TVS is the best example of family leaders taking the lead and running their business with the support of professionals."
Despite its $3 billion-plus topline, TVS is not projected as a cohesive corporate monolith. Yet, it has a holding company — TV Sundaram Iyengar & Sons, that originally promoted leading auto component companies such as Sundaram Clayton, Sundaram Fasteners, Sundaram Brake Linings, Brakes India, Wheels India, Lucas-TVS, and TVS Srichakra.
Members of the four TVS families — TS Krishna, TS Srinivasan, TS Rajam and TS Santhanam — are on the board of the parent holding company, TV Sundaram Iyengar & Sons. While independently managing their companies (see chart), the elders have found innovative ways of grooming and inducting the nextGen into business.
Worldwide experience shows that family businesses generally thrive under the first, decay under the second and whither under the third generation. Family business, researchers say, usually the third generation, loses management control over business and only 3-4% survive and prosper.
TVS has bucked the trend, successfully retaining hold over its traditional business of auto components for four generations. The group has also fortified its presence in the manufacture of two-wheelers and computer peripherals, besides financial services such as truck financing, insurance, mutual funds and housing finance. It has also diversified into the new BPO business.
Corporate watchers recall that when the most of corporate India was passing through turbulence between 1996 and 1998, with numerous shakeouts, business and asset stripping, disinvestments, closures, sickness, M&As and the like, the TVS empire remained robust building on its core competence. The companies sustained their profitable operations and paid handsome dividends.
What's more striking, the TVS group companies underwent a smooth transition into the 21st century business arena. They did not suffer when the parentage of their global partners changed following worldwide M&As in the automobile sector. Wheels India, Axles India, Sundaram Clayton, Brakes and Lucas-TVS continued to thrive. The only exception was the spat between the group and Suzuki Motor of Japan. Yet, following Suzuki's exit, TVS Motor emerged stronger by widening its product range with in-house R&D and increasing its marketshare in motorcycles.
How did this happen? Analysts say the group stuck close to its knitting, grooming professional managers from within the family while retaining the services of professional retainers. Says T Kannan, MD of Madurai-based Thiagarajar Mills, "The TVS family has addressed the issue of inducting family members in a well-thought-out fashion. They have good processes in place. Youngsters are always inducted at the junior level and they work their way up. All of them come with a rich and varied experience. This contributes to the successful induction."
At the dawn of the liberal era, in 1992-93, the group's turnover was Rs 3,000 crore. It touched Rs 5,500 crore in 1997-98. Riding the automobile boom, the Group's turnover zoomed further to over Rs 12,000 crore in 2004-05. In 2005-06, it is estimated to have crossed the Rs 13,500-crore mark.
Prof John L Ward, co-director, Centre for Family Enterprises, Kellogg School, who was in Chennai last year, said, "Business leaders from the family should motivate, track, guide and induct generation next into the business."
At TVS Group, this is what's happened precisely, though a bitter legal feud broke out between the TVS cousins in 1993 over one group company trying to enter the product line of another. But, soon the cousins declared ceasefire and with business interest overriding everything else, the families started focusing on building their brands. Senior family members are reluctant to talk on succession planning. But one of them nevertheless told SundayET, "There is no dearth of talent. We are sure the next generation will live up to the rich TVS tradition of trust, quality, value, service and discipline."
Family watchers say the fourth generation has been inducted at the most opportune time (see chart for who does what). TVS companies are no longer conservative. They are dominant market players busy setting up projects in the rest of India and abroad. They are also looking at more M&As and JVs as part of globalising their businesses.
Insiders say there is no dearth of bonhomie between the cousins and they regularly meet and discuss strategies to step up exports and globalise operations of group companies by leveraging the strong TVS and Sundaram brands. In the past couple of years, at least half-a-dozen nextgenners have either got elevated or joined leading companies after pursuing higher studies and working abroad.
Till not long ago, Srivats Ram, son of S Ram was steering Wheels India as ED. Now, he is the company's joint MD. His cousin, Harsha Viji ( first son of S Viji, who is brother of S Ram) has joined Sundaram Finance group as senior vice-president. Harsha's brother Sriram is studying abroad, and is expected to join the family business soon. At Sundaram Fasteners, Arathi Krishna, the second daughter of CMD Suresh Krishna has become ED. She began her career in 1990 as a management trainee and became general manager in 1993.
Arvind Balaji has joined Lucas-TVS as VP-business planning and will eventually succeed his father, T K Balaji, MD of Lucas-TVS and other companies. Krishna Mahesh, son of K Mahesh, has joined Sundaram Brake Linings as ED. He has a distinguished academic background having acquired MS in mechanical engineering from Standford University. He worked at McKinsey & Co between 1998 and 2001 and trained intensively at Toyota Motor from 2001 to 2003. Mr Mahesh did his MBA from Harvard in 2005.
His sister, Shrikirti Mahesh is working as senior manager, technical at SBL after graduating in engineering and working at Toyota Motor. TVS Motor CMD, Venu Srinivasan's daughter, Lakshmi Venu too is working in the company as part of her PhD in engineering management at Warwick University, the UK.
Says K Mahesh, CMD, SBL, "After his 11-year stint, I wondered whether my son (Krishna) would join me. I am happy he is working in the company. Today's generation is well-educated and well-informed. But, as in the rest of the industry, the biggest challenge is to attract and retain talent."
