Kerala’s Family Businesses Poised for Next-Gen Transformation

KOCHI:
The Confederation of Indian Industry (CII) and KPMG in India are proud to announce the release of a comprehensive report titled “Kerala – Empowering Next Generation,” highlighting the dynamic transformation of family-owned businesses in Kerala. This report, launched today, offers invaluable insights into how Kerala’s entrepreneurial spirit is driving innovation and sustainable growth across local, national, and international markets.

Key Highlights from the report:
Global Expansion Aspirations: 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-driven mindset and stronger governance practices.

Entrepreneurial Spirit: The report celebrates Kerala’s rich entrepreneurial history, tracing back to the ancient Malabar coast traders. This spirit continues to inspire new generations to innovate and expand their business horizons.

Resilient and Adaptive Family Businesses: Kerala’s family businesses have showcased remarkable resilience and adaptability, thriving in diverse 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.

Next-Gen Leadership: The report emphasizes the pivotal role of the younger generation in ensuring business continuity and sustainability. With rapid technological advancements and a growing trend of next-gen leaders taking on board positions, Kerala is witnessing a paradigm shift towards a more professional, governance-driven business environment.
Succession Planning: Effective succession planning is identified as 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.

Challenges and Opportunities: The report delves into the challenges faced during leadership transitions, including perceived disinterest from the next generation and the senior generation’s reluctance to step back. It also explores the benefits of involving external professionals to facilitate smooth transitions and enhance business operations.

Mentorship and Training: Mentorship programs and structured training are crucial for grooming the next generation. The report stresses the importance of balancing formal education with soft skills development and practical business experience, both within and outside the family business.
Conflict Resolution: 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.

Vishnu Pillai, Office Managing Partner – Kochi, KPMG in India, stated, “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. This report is a testament to their potential and the bright future ahead.”

Nilesh Mody, Partner, M&A and Family Office, KPMG in India, added, “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 “Kerala – Empowering Next Generation” report is an essential resource for family-owned businesses, policymakers, and industry stakeholders seeking to understand and navigate the evolving business landscape in Kerala and beyond.