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Akash Ambani, Anant Ambani, and Isha Ambani were recently appointed to the Reliance Board. This shows that the Mukesh Ambani Succession Plan is already in practice and being worked on. This $100 Bn business empire’s succession is something that the whole world has its eyes on. When the wealth of Dhirubhai Ambani was passed down to Mukesh Ambani and Anil Ambani we know how it turned out later on for both the brothers. While one went on to increase this wealth manifold, the other went bankrupt. Because of this, the upcoming Ambani Empire division can go wrong in multiple ways.

In this video, we will discuss why succession planning for family businesses is so difficult and why so many family businesses fail. This will also help us make better decisions as strategic leaders or investors. If you look at the Reliance board, the family members dominate the board. And if we go all the back to Dhirubhai Ambani, we will notice that there was no manager for Dhirubhai Ambani and there is no manager for any of these kids either. Because of this when some thought leader decides to join the Reliance group, they will feel reluctant. Just having to report to these family people is not the best thing that can hope for.

The career progression path for these thought leaders will thus be in jeopardy. Because of this hiring great talent at the executive level will be very difficult for Reliance. If all decisions are coming from the same family, there will always be blind spots. These family members can make huge mistakes because of these blind spots if they are working in an industry in which they don’t have any expertise. The second problem is the role to skill mapping. There are 6 family members working in the business right now. What is the skillset and suitability of these individuals for the roles that they have been assigned?

The role to skill mapping for these individuals is just not done. They keep drawing salaries irrespective of what their skill level is. The capabilities and the value add that the person with the right experience can bring to the table is just not there. The third and most important thing is the motivation. 44% of this $100 Bn conglomerate is owned by the family. So, what is the motivation for the family members to work harder? Also, they may want to work harder because their parents and grandparents have done the same but the vision and mindset of all these individuals might not be the same.

Walmart has found a creative solution to this problem. Nobody from the Walton family is a part of the active daily business processes. Because of these reasons, family succession plans are very tricky. There is no right or wrong answer to these questions. As a business student, you should ask the question about why these family businesses don’t survive beyond 2 generations. We hope the best for the Reliance group and the Ambanis.

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About Me

I publish meaningful and valuable content on this channel. My aim is to make business news more accessible and easy to grasp. If you find my videos informative and insightful then make sure to subscribe and leave a comment. I’ll see you in the next video

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Chapters

0:00 - Intro
0:45 - Family’s Dominance
1:44 - Role to Skill Mapping
2:27 - Motivation
3:51 - Possibilities of Succession
4:44 - Outro

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