Women on Top! - How women in family-owned business are taking control
Increasingly women are making their presence felt in family owned businesses in India. In this episode, our guest, Mala Paliwal, decodes why and what is happening with second and third generation of women in family owned businesses and how they are challenging traditional patriarchies to establish themselves as leaders of their enterprises as well as their families.
Source: Unsplash
Subscribe & Listen: Spotify | Google Podcasts | Apple Podcasts
About Mala Paliwal
Pic: Divya Shirodkar
Mala Paliwal coaches, consult, mediate, and train leaders and professional groups in family-run businesses, higher education institutions, and non-profit organizations in leadership and negotiations to own their worth. With over 17 years of global work experience, at times in roles as the only woman of color, she has successfully negotiated (often difficult) career transitions, relationships, and multiparty, multi-issue deals.
Mala also belongs to the 4th generation of a business family of pioneering glass manufacturers established in 1918. She brings this multigenerational family business experience to the negotiations/mediations in family-run businesses.
Resources
PWC Study on Family Business in India (2019)
Article - Standalone Family firms lead on Gender Parity, ISB Insight, December 2018
Article - Redefining Role of Women in Indian Family Businesses, ISB Insight, July 2019
Article - Business of Daughters, SME Futures, April 2019
Article - Increased Women Participation in Family Businesses, Shethepeople, January 2020
Article - Start Preparing Daughters now to take over the Family Business, Forbes, March 2020
Article - Murugappa group family feud: It's time for more women to join family businesses, Business Today, September 2021
Transcript
Sowmya 00:08
Hello and welcome to The WorkWise Pod, a weekly podcast in which your hosts, Deepak Menon and Sujatha Rao talk about how we can make our workplaces better; not just more productive, efficient and impactful, but also fairer, more empathetic and fulfilling. In today's episode, Deepak and Sujatha are talking to Mala Paliwal about the growing presence of women in family-owned businesses in India, and how they are challenging patriarchy. Stay tuned.
Sujatha 00:42
What role do women play in the world of work? Specifically, in the context of India, where labor market studies have consistently shown that women's overall participation in the workforce is constantly falling. Right now, less than 25% of women aged 15 and above actually participate in the labor force. Yet paradoxically, Deepak, in family-owned business, that is an increasing presence of women, particularly in leadership roles.
Deepak 01:11
Yes, Sujatha. For instance, the Business Today listing showcasing the most powerful women in business indicates that 75% of women in this list are associated with their father's family business, while 24% are associated with the spouse's family business. And while still only around 14% of directors, in NSE listed companies are women, it is a significant increase from the less than 5% in 2013. So, what is causing these changes? And what impact will increasing participation of women in family or business have on the world of work, and especially in India?
Sujatha 01:53
This is very interesting, Deepak, and I think this is a great time to introduce our guest for the day. We have with us Mala Paliwal. Mala belongs to a business family of Pioneer glass manufacturers, established in 1980 by her great grandfather, and molars in the process of setting up her own business. She is a Harvard Graduate and is an advisor to family businesses. Hi, Mala, welcome to the show.
Mala 02:23
Hi, Sujatha. Hi, Deepak. Thank you. Thank you for having me here.
Sujatha 02:29
So, Mala, I want to start off by asking you, how does it feel for you personally to have grown up surrounded by a family-owned business? I mean, how did it shape you? Did it shape you in particular ways?
Mala 02:45
And that's a great question. And it takes me back to my very, very fond memories of those times of growing up in a family-owned business. And, you know, growing up in a very small town, and being very aware of the privileges I had as a child. Just the sense that, what I have is not something that the world around me has, was a very humbling thought, and a very humbling experience. And we were made aware of it in several ways - the courage to take risks, to do things that are big, bold, and scary. And I've somehow always gone for those things, you know, made those choices, be it, you know, moving across continents multiple times, or applying to one program, you know, for masters that I wanted to pursue and one and only one and, and just going for it and saying, you know, I'll see what happens. So, there were several and just being in integrity with oneself, because if I can't be in integrity with myself, I can't be in integrity with others. And the value of harmony and unity. Because, you know, growing up in my family, I definitely saw the prosperity, harmony and unity brought not just to the family, but also to the community. And what happens when that gets destroyed - (it) does devastation not just for the family, but also for the community it sustains. Yeah, so it's really shaped me as a human being.
Deepak 04:08
And this trend of women led family businesses, is it for real?
Mala 04:12
Yes, I think we are definitely witnessing something that is very real. And as Sujatha pointed, pointed out in her opening comments, that women in family businesses, you know, they are playing a larger a much larger role in terms of managing the business. And more so today, and I think that trend is you know, when I think about before I talk about the trend, I think there let me give some examples. The Reddy sisters of Apollo hospitals, you know, they were nurtured the family still owns 34% of the company. Pratap Reddy remains the chairman at the age of 86. And, you know, all of the Reddy sisters they all are in executive roles and some even share a co-Managing Director role and stuff right. Amira Shaw, the promoter and MD of Metropolis Healthcare, founded by her father, so it's a father daughter duo. One particular duo that I want to point out as Meher Pudumjee, she's the chairperson of Thermax Limited, who succeeded her mother. Anu Agha, so that's a mother daughter duo there. And Anu Agha story is one of great courage because she had to step into a role of an executive at a time of crisis, it was when she lost her husband. So, it was really, you know, her stepping into the enterprise was really born out of her, one could say that, you know, perhaps choicelessness you know. And maybe and the board invited her to take over and she says in an interview that maybe they thought that I could be bullied easily, and we'll talk about that later on. You know, Akshali Shah, these are the younger generations. They are called in the family enterprise, the jargon, it's called G2. So Akshali Shah is the second generation you know, of Parag Milk Foods. So that's a father daughter duo. Niharika Nigam, again that's a father daughter duo. Dipali Goenka, that's a husband wife duo, where she's taken over, you know, she's leading rather - she's the CEO and the joint MD of Welspun India Limited. Lakshmi Venu, and you know, there are endless, endless, you know, there's so many more examples. So, I think in my view, some of the drivers of change are that these families have become, the families have become smaller. So joint family, you don't see that many joint families anymore. I, you know, coming from a joint family, our family split, and now we don't live jointly anymore. So, I think that when you're not in joint family, you know, who are the people who will be taking over the business is children. So, I think, then people started, the parents started to recognize that, hey, why don't we nurture our daughters as well. So, the shift to nuclear families from joint families definitely is playing a big role in this and also the changes to the legal framework. So, you know, the amendment to the Hindu Succession Act, and also the Companies Act for having a member, a woman member on the board of directors. So yeah, so I think nowadays, daughters are getting more involved in the business from the beginning and picking up the skills and knowledge by working alongside the professionals and promoters in the family business. And their hard work and quest for knowledge is building their credibility as the scions of tomorrow. Yeah, we're definitely seeing a trend there.
Sujatha 07:54
So, the act of diversity is not that I would do it tick box and say, you know, I have x percentage, but the presence of that diversity actually challenges institutional structures that have always privileged some and not privileged the other, right. I'd like your take on this Mala - How do you think broader ideas like these right, as well as maybe, you know, feminist ideas, how have they supported this broader trend for diversity in the workplaces? And particularly in family-owned businesses? Right? Do you do you see these applying there as well?
Mala 08:36
When you think about a family business, I think that diversity comes at some certain points of transition. And one of the biggest, one of the main points of transition in a family enterprise is when the next generation of the family gets married, right, and they bring in the spouse, and I really feel that we need to start changing this narrative. And I've heard this way too many times, and webinars that I've been part of, that I've moderated, that I've spoken in. And what I've heard some speakers say that, you know, "trouble starts when the daughter-in-law comes in" - I really want to call that out. Because I think trouble can also start when a son-in-law comes in, right? Because even a son-in-law is coming from a very different school of thought, very different value system. But you know, I really want to take away this idea that this is a bad thing, this transition is bad, like for the family. I really think it's a great opportunity for the family enterprises to really look at what does this person bring to my family that my family currently does not have? And, you know, look at it in a very structured manner in terms of the diversity of thought, you know - what are those value differences, which my family currently doesn't have, but I would love for this family to have and this new person coming into my family is reading data and having those dialogues in a very structured manner, and then saying, you know, what from this diversity of thought, this diversity of value, do I want to take away and codify in my value system, in my family value system and not just my family values system but perhaps also the enterprise.
Sujatha 10:10
So interesting what you're saying, Mala. I think that's a fascinating idea. A moment of transition is a welcoming opportunity to bring in diversity of thought. I think going back to this idea of broadening perspectives, right, because you're used to a certain way of thinking and there's new, fresh blood, new ideas pouring in. But I'm also always constantly flashbacking to the soap operas that fill our TV channels, right, "saas bhi kabhi bahu thi" or whatever, which perpetuate this idea right, of this, sort of, powerful women and a newcomer and it's constantly a power tussle right, that the soap operas talk about?
Deepak 10:55
I think one thing I wanted to say the transition need not be daughter-in-law, son-in-law, but could be just between generations. Like for example, someone in the next generation goes abroad, studies abroad, does an MBA comes back and you know, r is influenced by modern ways of running an organization could also be a point, a diversity of thought, that suddenly comes into the organization, could be a source of conflict or resolution, that takes the organization forward. Having said that, the idea, I would trust the feminist movements in the last 100 years to have contributed significantly to where we are. For example, the laws that Mala spoke about, Companies Act 2013, that mandated at least one women director to be present. I think it would not have happened if the broader feminist movement would not have made the laws to be changed, to be altered.
Sujatha 11:58
Mala, as you work with other family-owned businesses, are you sensing that the amendments to the Hindu Success Act and the Companies Act is playing a role in driving the presence of women, both in businesses themselves as well as women in leadership roles in family-owned business? What has been your sense of the Act and its impact?
Mala 12:24
I think what I am seeing Sujatha, so there's definitely a trend, there's definitely an increasing trend, I should say, of women on the board. So, in India, particularly, presence of women in family business management teams is still low, compared with the rest of the world - 13% for India, and 24% for the rest of the world. And when we consider that globally, as well as in India, family businesses contribute to over 70% of the GDP of most developing and developed countries, right? I think those numbers are still pretty low. And there's something you know, something, we still there's more work to be done here. And when it comes to the next generation and women, the picture is similar in India - 12% of the next generation women in the business are women as against to 23% globally. In 58% of the family businesses in India, which have the next generation working in the business, there are no women. And it is only 12% of Indian family businesses and 25% globally that more than half the next generation are women. So, I think while we are seeing an increasing trend, I think the difference lies in whether they are taking on more, taking on executive roles or non-executive roles. With the Companies Act, women are on the board. Now, could that be a form of just tokenism? You know, check the box exercise and it's easier for standalone family firms to put a woman on the board because they have more control. But it's not so easy for a publicly listed company, which is family run or family owned to put a woman on the board. Right.
Sujatha 14:21
So, what do you think are some of those specific challenges that are sort of preventing women or women faced by leading their own family or businesses?
Mala 14:29
Yeah, challenges faced by women who are daughters versus challenges faced by women who are daughters-in-law may be very different. And we should differentiate between those. So, while the daughters may be up against the patriarchal mindset that runs deep in both the systems, right, in the family system and the business, the daughters-in-law, on the other hand, may have a double bind. They have the patriarchy to deal with any which way but also the reality of coming from a different value system being you know, of not being from the same community, having a different frame of reference. So that's a double bind that daughters-in-law up are up against. Let me share a study that I know of. There's a study that was conducted at Columbia University. To half the class they gave a case study with the name of Heidi Roizen on it. And Heidi Roizen is a Silicon Valley executive, venture capitalist and a very successful entrepreneur. And the other half of the class was given the same case study, with the name changed to Howard. The students rated Howard and Heidi equally competent, but they liked Howard, but not Heidi. Specifically, students felt Heidi was significantly less likeable and worthy of being hired than Howard, and perceived Heidi as more selfish than Howard. It's the same person, it's just the change of the name. So, our biases are so deep. Just the fact that the woman is a leader and she's, she's one who's calling the shots, we perceive that as selfish or bossy, or we don't like that person, just demonstrates a negative correlation for women between power and success. And how do you solve for that? I think there's need for a greater dialogue, you know, for women in power to have with their, perhaps their own families, or in their offices, you know, creating those safe spaces for women, where these kinds of biases can come out and be talked about, right? What is perceived as aggressive, or what is perceived as selfish? I think those are kind of dialogues that need to be encouraged more in workplaces, and not just workplaces, am also talking about workplaces which are family enterprises because I mean, you know, they are large enterprises. So, I think the women leaders of these family enterprises they have, they can really create those safe spaces where such dialogues can happen where these deeply ingrained biases in society can be challenged, and we can really make a radical change in mindsets. And I think that is what is called for today. I think what the difference in the case of family businesses is - the challenge is two-fold because it exists in two systems, the family system, and the business system and they're paradoxes to be dealt with. And I think one way to be able to navigate these paradoxes is the strength of the relationship both in the business system, and in the family system. When the women have those relationships, you know, when they've won the trust of the people in the family, it becomes very easy to lead in the business system, you know, when you have the complete buy-in of the family, you know, everybody in the family is behind you, the challenges become much less in the business system. So having those, you know, setting up rituals where people are talking, so having those dialogues, those difficult conversations, I think those need to be had, and the safe spaces need to be continued to be created through rituals and formal structures as well.
Deepak 18:06
This winning the trust, you said; do women feel that they're on trial, both in family and in their businesses that they lead?
Mala 18:14
I definitely think there's that pressure, right. And a lot of it is real, but some of it could also be perceived. So, I think the perceived pressure - that can be eased with dialogue, if the women have those relationships, to be able to have those conversations. The real pressure, which is in the business world, I think when a woman starts to build their credibility by really having and a lot of women, particularly the next generation of women, they you know, they go out, go to elite schools get educated, they go out and prove their mettle beyond the family business itself. They go and work in other companies, corporations, and they rise up the ranks there and then they come back and join the business. And that's, that's for a reason. Because then they have built a credibility outside. And that's what they bring in within. And they also start, they also start as management trainees within the family firms before they go on to do their MBAs just to be able to start to understand the business. So, they build that credibility to be able to overcome the pressures, you know, which the society places on them, of which the two systems that they operate in place on them. So, I think those are some ways that they can deal with these pressures.
Deepak 19:23
And what shifts do you see in these women leaders after some few years of running their enterprises?
Mala 19:29
I think it's really that shift that you know that they can do it. And it's becoming more and more apparent, because there are many more businesses where women are leading, and it's not a, you know, you read about it in a newspaper once in a blue moon. I'm reminded of this story, and I think this is what is starting to change because of the shift in the mindset of people. My mother, you know, she would always read in the local newspaper called Navbharat Times, she would read about there was a section called "Prabhaavshaali Mahilayein" or "Pratibhavaan Mahilayein", and she would read about them. And that really influenced her thought, that really influenced how she wanted to raise her children. And my mother was always an enterprising woman, she wanted to work in the family's business. However, that opportunity was never given to her. And then she just decided that, you know, if I couldn't do it, I'm going to have my children do it. So, she had raised us with that mindset. So, I think the nurturing of the younger generation, that's the shift that we're starting to see in the society, right, particularly in the family businesses, when more women are stepping up to lead, to manage, to play more active roles in management.
Sujatha Rao 20:35
You had mentioned this earlier, Mala, a little bit about support systems. I just wanted to hear your thoughts on that. What are these support systems that can be created, right, (A) to help existing women leaders and (B) also to encourage more women to sort of lead family-owned business?
Mala 20:56
So given the nature of a family enterprise, the biggest support system is the family itself, and the members of the family, right for both the daughters and the daughters-in-law. Systems and processes can be put in place to ensure that these women leaders can be nurtured and grow and succeed. And, you know, when we think of support structures or support systems, it doesn't have to be a formal support system, you know, all the time. Just these conversations, that one person's getting up and saying that, yes, you can, and I believe in you, and I believe that you can,
Deepak 21:27
I almost feel that there is a need for somebody external to support modern organizations do this better - consultants, coaches, facilitators - because too much is at stake, and there is too much familiarity sometimes with the family, within the family, it might become too difficult to navigate, and somebody external might be a good supporting system.
Mala 21:47
Yeah. And that is undertaken by some families, you know, on a formal basis. The DCM Sriram family, the brothers for the last 25 years, they go for a retreat, every year, they go for a retreat with a behavioral scientist who helps them sort of review the year gone by and asks them, you know, what is working and what is not working? What worked for you What did not work for you at the relationship level, right? So, they really talk about, you know, my brother did this. And I like that. And my brother did that. And I did not like it. And I think those dialogues are really critical to have. You can't do this while you are, you know, in your day-to-day, you can't just call a person in your office and say, "Hey, here are all the conflicts that are going on and help us come and fix this." I think just as you can't fix a bicycle while you're riding it, you have to get off the bicycle and create that space, to think, to really reflect on "what's going on here. Why am I behaving the way I'm behaving? What is showing up in these relationships of mine" and reviewing that and showing up not in the negative way, but also in the positive way know, what am I doing well in these relationships. Because particularly for a family enterprise, I think, that is so it's the need of the hour, because there is so much at stake. You know, families are driven by values. Of course, values can be codified in a charter or a constitution, but I think values are, behaviourally, values are transferred when they're exemplified, right. I mean, it's like walking your talk. And I think it's very important to examine one's behavior, and then say, you know, what are the corrective course of action that I need to take? That's one of the things that I do because I really, I saw the devastation that a family underwent, my own family underwent, because these underlying dynamics were not handled at the right time. And then things went out of control. It was not just the devastation of the family, but it was also the community it sustained, right, there was a societal impact, a real impact in society of all the 1000s of laborers that were coming into our, into our factories to produce the glass, they lost their livelihoods. There's just so much at stake. And I'm generation four of my family's business. And I'm pretty sure when my great grandfather and grandfather built this empire, it was really an empire that sustained many, many families. You know, they built it for posterity. And they like, you know, they had it, they had a long-term vision and family businesses have, they're in it for the long run.
Deepak 24:12
So, what would your advice be for women who are just taking on the mantle of running their own family businesses?
Mala 24:18
Okay, I think it's not just women leaders who are in power and authority in the business. And that's how we usually see women's leadership or that's how we're defining it - women leaders in positions of power and authority in business. It's also women leaders in positions of power and authority in the family, right, which may be very, very subtle, which may not be really spelt out, but they are in positions of power and authority. And I really feel that women leaders in both these systems, they are the backbone of the family and its enterprise. They give life to the ethos of the family by transcending the two systems of family and the enterprise both knowingly sometimes consciously and unconsciously, just because they're so intertwined. They carry and exemplify the family's values, the vision and the mission of the family, which defines the culture of the enterprise, its processes and structures. You know, I'm reminded of my mother was not part of the management of the family but then she influenced a very, very big initiative that my that my father took on when the family business was expanding. And my father was setting up a new line, new assembly line for a new product and the work, the laborers, they were working extra hours, and they didn't go home for four days, because he was on a tight timeline. And my mother told him that because they have not gone home, you must send money - and this is I'm talking about early 80s - "you must send money to each of the homes and give it to the women of the home, not to the men, you know, they have the fathers, give it to the women, it could be the wives or it could be the mother, but give it to the women." And he did that, you know, so that's a value. You know, it's really about taking care of the people. And my father didn't come back home for four days. You know, he had just had his first child. And my mother was very, very sick. But he didn't come back home because he stayed with the laborers because they didn't go home. So, he didn't come back home either. He ate with them, he you know, he slept in the same quarters as them. And that really, you know, that's the value of humility that you know, we are because they are. And I really feel like women have such a huge role to play both whether they're in the family business or not.
Sujatha 26:27
You know, women exemplifying values, women becoming conscious of the spaces that they occupy both at home and in the workplaces and sort of the power that they wield in these different spaces. You spoke, Mala, about the ideas of managing in equilibrium, right? This adaptive leadership that you spoke about. And finally, women supporting other women, right? Women as creating these energizing hubs that enable other women to participate in family-owned businesses. Fascinating ideas that we've looked at. And I want to thank you very much, Mala, for bringing a very nuanced lens into women and family-owned businesses. Would love to invite you back another day, another time to maybe talk about some of these issues and trends and maybe some of the newer trends that seem to be emerging with women-led family business, but it was an absolute pleasure. Thank you so much for being on WorkWise Pod. We hope to have you again another day.
Mala 27:36
Thank you. Thank you for having me here. Sujatha and Deepak. Thank you for inviting me. I just wanted to give credit to some of the numbers that I spoke about. I got that from the PWC survey, they run a survey on family businesses, and this was from the latest survey.
Sujatha 27:49
Thank you, Mala.
Deepak 27:50
Thank you, Mala.
Sowmya 27:55
Thank you for listening. We hope you enjoyed that. Next week, Deepak and Sujatha Rao are talking to Suparna Diwakar about a completely new model of management, which creates regenerative organizations, which are good for you, good for others and good for the planet. You'll find the resources referred to in this episode in our show notes and more information at our website, www.workwisepod.com. We'd love to hear from you. Comment on the website or write to us at hello@workwisepod.com. Credits go to Sanjali Ranjan for the cover art and Derek Clegg for the intro and outro music. Today's episode was mixed produced and edited by me, Sowmya Karun. Don't forget to subscribe to The Workwise Pod on your favorite podcasting platform. We'll see you next week.
