By Manu Shah
In a first of its kind event, two generations came together to give their take on Generational Business Transition. Founders Ramesh Bhutada and son Rishi of Star Pipe Products, Jugal Malani and Pankaj of Unique Group of Companies and Mrs. Vijay Dhingra with Abhishek of Expotech USA, shared insights on how the second generation was initiated into the family business and how they are being groomed to take over the reins in the future.
The event, organized by IACCGH at the Hess Club on September 20, was sponsored by AJ Gallagher & Company represented by Bill Newman.
The topic clearly garnered a great deal of interest and was evident in the packed room. Executive Director Jagdip Ahluwalia revealed that in the last 24 hours alone, registrations doubled from 90 to 180.
The novel concept came from Star Pipe Controller Vijay Pallod and Chamber President Swapan Dhairyawan. It highlighted the success stories of three Indo American entrepreneurs and quizzed the second generation on shouldering this responsibility and taking it forward. In his remarks, President Dhairyawan thanked his Board and pitched for the sustainability and continuity of this series in the future as a Signature event of the Chamber.
Unique Group of Companies founded in 2008 by Jugal Malani imports, warehouses and distributes a wide range of OEM products servicing the Plumbing & Drainage, HVAC, Gas & Electrical industries. Star Pipe Products founded in 1981 by Ramesh Bhutada is a global manufacturer and supplier of pipe fittings with 1400 employees globally and Expotech, a women owned business started by Vijay Dhingra in 1985 is a world class distributor of laboratory, chemical and industrial equipment and supplies. All three have been honored in the past by IACCGH for their business acumen and entrepreneurial success.
Moderator Pradeep Anand, a business coach and consultant, kicked off the event with some interesting statistics. Family owned businesses account for an estimated 80% of companies worldwide and are the largest source of long-term employment in most countries. In the US, they employ 60% of workers and create 78% of new jobs. US Statistics also reveal that only 30% of family business organizations last into a second generation.
Contrary to expectations, Pankaj, Rishi and Abhishek were all initially reluctant to join the family business. All three explored other options before coming on board and when they did, they began at the bottom, working in the warehouse and gradually moved up the ranks. Rishi, who joined the company after securing a Business degree from Wharton, even underwent an interview process before joining as a management trainee. The no-privileges training served them well and today all three hold positions in the top management of their companies.
In each case, the founders addressed the importance of establishing a “family-like atmosphere” in the company with the result that employee turnover is extremely low. Expotech welcomes inputs in decision making and boasts of employees who have been with the company for 30 years.
Star Pipe has 3 generations of the McCutcheon family working for it and husband-wife teams are the norm. Unique retains talent by inviting employees to become partners in the business. Emphasizing this point, Rishi stated that employees should enjoy their place of work and not consider it a place where “they pick up a paycheck.” Likewise, Abhishek underscored the importance of encouraging talent with training programs and continuous engagement with senior personnel. Pankaj highlighted the recreation room, gym, basketball court and other facilities at Unique to encourage bonding among its employees.
Business philosophies are strikingly similar. As Ramesh Bhutada put it “businesses must be “anchors for the families, for the employees and the community. They should constantly evolve, be receptive to new ideas and aim “to become a larger mission.”
True millennials, all three played a critical role in deploying new technologies to optimize efficiency in their businesses.
The three founders have always demonstrated an empathy and generosity to worthy causes. Ramesh Bhutada hailed each family’s legacy of service from Jugal Malani’s grandfather who opened his warehouse to feed people during a severe drought, his own father who was a dedicated social worker in a small village in India and Ashok’s Dhingra’s commitment to building India House and remarked that the next generation has this “legacy to fulfill.”
All three boys were equally emphatic about continuing the tradition of community service they have seen their parents display.
The older generation are making way for the younger generation to come to the forefront, but as Jugal Malani put it, the transition comes with greater expectations, greater responsibility and “greater pressure to prove themselves.”
Looking down the road, all three seem comfortably poised to take it to the next level.