Inside the Mind of a 23 Year Old Indian NextGen

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Kanishka Arumugam

Kanishka Arumugam is the perfect example of the kind of NextGen this blog is all about. Young entrepreneurial people with a can do aptitude; an authentic leader that knows what he wants from life and goes for it. In this interview, this young NextGen surprised me with his maturity and wisdom. Kanishka Arumugam shares his family story and hopes for the future. Please, enjoy it!

1. Kanishka Arumugam tell me about you and your family business, Deccan Pumps Group, in India

I am from Coimbatore, an industrial and entrepreneurial city in south India, dubbed as pump city of Asia, known for its world class Pump Manufacturers, Textile Industries, International Educational Institutions, and also an emerging IT hub.

I am fortunate to be a second generation member of the Deccan Pumps Group. I grew up around the business and decided to be an entrepreneur from a very young age and this passion drove me to learn from organizations around the globe. Thanks to my prestigious alma maters of Sheffield, Leeds and Stanford Universities, that groomed me in many ways.

My father P. Arumugam and his uncle K.K. Veluchamy founded Deccan Pumps 32 years ago with a mission to make the life of farmers better by manufacturing superior reliability pumps. Today Deccan is a closely held conservative group with an annual turnover of around Rs 100 core focused on pumps also with its presence on Fluid Handling Distribution, Real Estate and Education. The brand is one among the Top 5 manufacturers of submersible pumps in the country and it remains Asia’s largest producer of vertical open well submersible pumps.

My father is a keen philanthropist. He runs a home for elders, has a desire to turn his ancestry farm into a model agricultural unit, and spends time in upgrading the basic infrastructure of his home village.

He believes not in chasing numbers but in giving back to society in as many ways as possible. Recently, he undertook a not-for-profit initiative and incepted the Info Institute of Engineering, along with his friends, mainly for the first generation learners of the country.

One can have simple living and be content but when it comes to business I believe one should never think twice about making it bigger. And this is what my dad and I often argue about. However such arguments help me evolve and I get to know the perceptions of the previous generation and absorb whatever is suitable in the current scenario.

Last year, after my graduation, I spent time with a few European family owned manufacturers and also had a short stint at Xylem, a non-family owned American company, the world’s largest producer of pumps and systems. Its major competitor was a Danish family owned company.

I was awestruck to learn how a family tradition could bloom into an industry that gives its competitors a tough time.

2. What’s your thoughts on building a Socially Responsible Company?

As mentioned earlier, a few years ago I often wondered why my father started a not- for- profit engineering college, a home for the elderly, rural development programs and similar activities instead of just growing the business. But now I realize that companies which are long lasting have a broader outlook and contribute to society in crucial fields such as education, healthcare, women empowerment and for a lot of other important social causes. The Forbes, Godrej, TATAs, Thermax and Wadias, are all living examples of this in India.

Last month when I was in Germany I visited my friend’s family owned company VIEGA, a fifth generation company which is into pipes and systems. It was interesting to learn how the family and business have involved the small town of Anttendorn in a larger way and how the feeling of goodness has been spread across from the taxi drivers of the company. Also the spirit of entrepreneurship and drive for growth is clearly seen in the fifth generation more than in the previous generations.

It is very essential for all the next generation family members to involve the society and community at large, in which they operate, and also to help the underprivileged and make the world a better place. A company’s purpose is just not to acquire wealth and markets but also to contribute to the society in which they live. This is an important value in creating long lasting organizations.

What do you think about Value system in a family operated company?

Care for the members (employees), humility, simple living with high thinking, involving the society, respect and care for the underprivileged, professional management with family members on board and taking part in participative management are important to the company.

The role of family business leadership can no longer be authoritative; only an all inclusive leadership model with the best value system works in today’s business organization. To put it in a nutshell, the secret behind a successful business is long term thinking, highly ethical practices strong values of family spirit, integrity, value delivery to customers and developing an entrepreneurship attitude in every employee. Keeping the company financially stable and risk-proof, safeguarding and adding value to the business: these must be the goal of a Next Gen member who wishes to grow his company in leaps and bounds.

Kanishka brief me about your opinion on Ownership, Management and Family.

Ownership, Management and Family should be viewed differently among the next generation members.

Your father might have been a great product designer who helped the company grow, but that doesn’t mean the next generation could follow or repeat the same. There is no point in just holding positions, adding value to the business is more important.  Perform else take a back seat.

Family involvement in a company definitely helps it grow at a much faster pace since the outputs are going to benefit their whole generation. More than money, emotions and attachments drive individuals towards better growth.

I believe family owned companies and the next generation should clearly differentiate between ownership, management and families. When these collide it gets complicated outside of the office too. It is simple when said, but I’m sure it is difficult to practice. My father and I might have a disagreement inside the office room, but that should not hinder the father-son relationship. My style of working is different from my dad’s. It doesn’t mean one is right and the other is wrong; we have to find our own strengths and contribute.

Is there any family structure in Deccan Pumps Group? Your group recently announced a Spin off.

Its sad we had to do this, we tried our best but was too late. Also the chief emotional officer my grandfather was no longer there . There was no issues for money or business.

In India sometimes families grow faster than businesses and so we are forced to draw agreements for securing the future of the business and the brand value of what our previous generations have created. We, at the Deccan Pumps Group, are currently working on ownership and brand sharing methods with the next generation members. The ultimate goal is to secure the business, brand value and at the same time allow every member of the family to pursue their interests.

Every next generation family member should be on a stewardship / trustee role. I find myself not as a maverick, but as a star in my own way. Gen-next entrepreneurs are fortunate to be born in privileged families and should be thankful for their education and resources that not many are fortunate to have in a country like India. So we should add value to what the previous generations have created, protect it and pass it on to the next generation.

Brilliant. What’s your future Goals?

I’m just 23 years old and have a long way to go and I am sure my thought process and learning will evolve as I observe, learn and grow. I strongly believe that every next generation member should spend time in at least two companies briefly before joining their family business. It gives one a great learning curve of how business families work across the globe, which elevates the thought processes and enhances entrepreneurial skills.

I’m looking forward to creating a great family owned company with strong values and best practices that I have seen and learnt in the last few years across the globe and act as a trustee to the future generations. One thing I have learnt from the west is that family companies are held by Foundations and work on the model of investing all profits back into the company where the family is allowed only a small percentage of profit. I shall try working out a similar model.

The next ten years is very crucial for the country. I’m sure there can be a lot of globally competitive family owned companies from India across all sectors, if family companies practice the best processes and systems. I hope to put myself to work and add value to what my father has created. I’m sure every next gen member is talented, unique and can contribute in their own way – be it CSR, Marketing or Research.

The internships I went through, systems I worked in, diverse cultures I experienced and talented individuals I met, have left an indelible mark in my life.

I’m currently working on a project setting up a state-of-the-art new plant with the experiences and processes I have seen across the globe. Though not a mega plant, I aim to make it a very efficient one. I found the brand Deccan Pumps strong only in certain segments. So my new Brand extension line would help create a new perception among customers and drive towards growth.

The products are being designed and upgraded to world-class standards with a great emphasis on manufacturing systems and process technology. The new plant is a small test that I’m putting myself to. It will also increase our productivity in one product line up to five times.

My Professors in Stanford and Sheffield have always been good mentors and when I shared this idea they felt that this startup would help me learn quickly all aspects of business and if I perform well I will be ready for a bigger role.

Perform and Preserve, else Perish. Also, if one fails to safeguard the business and grow, it’s a crime. With a strong support of the previous generations and the wide global exposure that we have access to, it’s time we next gens create history!

Kanishka Arumugam

Deccan Pumps Private Limited

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¿Cómo convertirse en un “empresario en serie”? Esteban Sosnik de AtakamaLabs nos da las claves

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Yo vengo de una empresa familiar donde financiarse con dinero ajeno es el último recurso y pensar en vender la empresa nos produce dolor de estomago. Por eso, cuando conocí a Esteban Sosnik y me contó que ha creado dos empresas con dinero de inversores y las ha vendido en menos de 5 años desde su fundación, mi mente empezó a bullir con preguntas… ¿Cómo se hace eso? , ¿Por qué?, ¿Qué tienes que tener para que te den dinero?, ¿Cuánto te queda de la empresa?…

Esteban ya apuntaba a emprendedor de éxito desde el principio de su carrera. Después de graduarse con honores de la Universidad de Virginia con una licenciatura en Economía y Relaciones Exteriores, se unió a JP Morgan en el grupo de fusiones y adquisiciones de América Latina con sede en Nueva York. Más adelante, Esteban fue director general de Inversiones en Penguin, un fondo de Venture Capital para start-ups en América Latina, donde ayudó a lanzar más de una veintena de nuevas empresas en la región, muchas de los cuales aún hoy operan con éxito.

En 2.002 junto a Tiburcio de la Cárcova y Wenceslao Casares  (el fundador de Patagon) lanzo “Wanako”, una empresa dedicada a la producción de juegos para PC y consolas, que vendieron 5 años más tarde a la mayor empresa de video juegos del mundo, Vivendi.

Después de vender Wanako, Esteban paso a desempeñar la función de vicepresidente de Desarrollo de Negocios de Sierra Online, división de Vivendi Games. Pero su espíritu emprendedor lo llevo a lanzarse en el 2.010 a una nueva aventura, AtakamaLabs.

AtakamaLabs es una empresa de juegos online que se caracteriza por la innovación de sus productos que van adaptando dependiendo de cómo los usuarios funcionan con ellos. Solo dos años más tarde, Esteban vendió Atakama Labs a la multinacional japonesa DeNa aunque hoy en día sigue al mando de la empresa.

Esteban es un argentino alegre, divertido e inteligente que le gusta llenar la casa de amigos y aprender de todo el mundo a su alrededor. Yo he aprovechado nuestra amistad (es el padre del mejor amigo de mi hijo) para bombardearlo con preguntas y aprender de su extensa experiencia como emprendedor.

Pero he pensado, que tanta sabiduría tiene que ser compartida con el mundo y esta es la razón de esta interesante entrevista donde Esteban nos da las claves para ser un emprendedor de éxito. ¡Disfrútala!

Written by Carmen Lence, Executive Coach at NextGen Consulting & Coaching LLC. Contact Carmen  at carmen@nextgenfamilybusiness.com

Do you want to gain control of your family Business? Buy it!

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Jamie Calvetti, President of James Calvetti Meats in Chicago

After 32 years working in the family business and running it before his father’s passing, Jamie Calvetti found himself as an equal co-owner with two more siblings that were not involved in managing the business. The situation got to a point that he had to buy his own business to gain control. In this interview, Jamie Calvetti, President of James Calvetti Meats, one of the USA’s leading purveyor’s of prime quality meat products, shares how to go about buying your family business and what he learned from his father’s mistakes.

What were the main challenges that you faced working in your family business?

In family business, there is a lot of jockeying back and forth. My father was aggressive, charismatic and well known around the country. He slowly allowed me to manage some pieces of the business.

I had been gainfully working and managing in the business since I started. I learned everything that I could about the business. I bought computer into the business in 1982 for logistic and accounting functions. Email did not exist in 1982. I managed to processing, logistics, personnel, accounts receivable and payables and some purchases. I had my own sales, but of course there was many times that competition was a problem. I did everything an entrepreneur does in a business.  In 1986 I started up business in Japan (the country was too small for my father and myself to compete within). Shortly after that I started up sales in Europe. Between the time 1986 and 1991, I traveled, on business, to Japan and or Europe about 15 times.

In 1991 I was able to manage the large multinational business customers we had because of the change in technology. That was the advent of email.  Major customers starting using email to communicate, which I was very proficient. My father’s style of communication did not work for the new younger buyers/managers.

My father felt that I was taking him away from the business. There was a competition between my father and I and competition between the siblings.

Was there any succession planning?

There was no formal succession planning. My father’s accountants came to him and said he needed to move some of his shares to his children for tax purposes. He wanted to split it equally. The accountants, unbeknownst to him and me, gave me a tenth of 1% more than my other siblings.

Were you the only sibling working in the company?

One sibling was. He was in charge of the newspaper for the first 15 years and then in charge of Internet marketing the last 15 years.

Do you think that equal is not always fair?

It wasn’t. The accountants set it up. When my father passed away there was jockeying for position. At that point, my father was 89 years old, and I was running the business.

My dad was very good at running a business and did not melt the company. Because of that, the company was and is very well financed. We left quite a bit of cash in the business.

I had to buy both my siblings out over three years and both were major negotiations. There were bad feelings involved and it took a very aggressive attorney to take care of things on my side.

In the meantime, we had to run a business. I could see down the line that with all these buyouts I was going to need to start growing the company again. We were in the airline and food service business and we stopped growing after 9-11 and didn’t diversify. I tried to diversify a couple of times and it failed. Ultimately, I went back to my core business. I reduced my salary and reduced expenses where it was necessary to generate the cash for the buyouts.

What were the keys to raise capital to buy your siblings out?

You have to make a profit, have good cash flow, and show and prove that to the bank. Handle your personal finances properly and correctly. Be conservative with the money that you do have. I had my  broker contact the bank and give a referral. I come from a place where my dad wanted to pay everything in cash. We paid cash for a building, and in about 17 years the value of the building doubled and there are no loans against it.

You just have to play it right and you can’t be the guy that has a $1 million dollar house with an $800,000 mortgage. You will not get the financing even though that is your personal stuff they are going to look at it. They are going to see that you are too much of a risk taker or you don’t know how to run your money.

I also look at my cash position every day. I know what my accounts receivable, accounts payable, loan, and my cash positions are. I also know what my estimated payouts are for the following week. In the meat business, you have to pay your bills in seven days because we buy a perishable product. You should also follow the markets. When we made a lot of money, instead of taking it out, I loaned it back to the company. It was advantageous to me because I could pay myself interest more than market rates.

It also showed the way that you ran the company.

Right. I had stable employees. You bring the banks in show them the business-that is not normal. You show everything to them and show them you can make money in various economic conditions.

When your father passed away there was no real succession plan. What would you do differently for your children?

I don’t have any children but I do have a stepdaughter. I would never burden her with this. What I would do different than my father is I would determine who was most interested in the business and most capable. I would move those assets upon or before my passing to that person. Then, I would compensate the others.

How is your relationship with your siblings now?

We have a strained relationship.

Do you think that all this pain could have been avoided with proper planning?

Maybe. Entrepreneurs are a special type of group – they are very competitive at least my father was. He was competitive with his children. I can remember a couple times, that he wouldn’t be so happy  that I would bring in a huge order. It was a strange situation.

What advice would you give next generation members that are considering buying their Family Business?

  • You first have to know how to run the business profitably and conservatively. You should not take a $500,000 salary, take cash out the business, and expect the bank to finance the business.
  • Have to have your own money in the business too.
  • Have a great reputation in your industry, better reputation than everybody else.
  • Pay your bills on time or early. That gives you power to do the things you want to do or at least it helps you.
  • Then you have to run your personal life properly. Don’t have a $1 million house with $800,000 loan.
  • You have to be and work at the job. You can’t be on vacation all the time.
  • You have to have stable employees, be a good manager, and a good communicator.

What about you? Have you ever been in a similar situation? What other resources could have been used to take control of the company? Are banks the most likely founding source for family business buyouts? Please, share your experience, we can all learn from it!

Written by Carmen Lence, Coach and Consultant at NextGen Consulting and Coaching LLC. www.nextgenfamilybusiness.com


Entrepreneurship from the Point of View of a Next Generation Member: Edouard Thijssen from TrustedFamily on His Quest to Make a Difference in the World.

Edouard Thijssen is a 5th generation member of the Belgian group Aliaxis, a company in the plastics and transportation industries. He is also an entrepreneur in his own right and the co-founder of TrustedFamily.

Edouard met his business partner Edouard Janssen, a 6th Generation member of the Solvay family—an international Chemical and Pharmaceutical group of the same name—at a FBN meeting. After talking for a while, they realized that they both had the same unanswered questions about their families and businesses: How do you keep the small, close family feeling between family members in a family that has over 100 members? How can everyone keep in touch with one another and feel like they are an important part of the family group? How do you keep those family members that are not involved in the management of a family business informed and feeling that they are a part of that business?

Together they solved these problems by creating TrustedFamily, an online secure networking platform that offers similar features to Facebook, but is specifically designed for family members to share information about their families and their businesses. It started small, but today TrustedFamily has more than 50 clients scattered over 15 countries. The platform serves families of all sizes, from just 10 members through to those with more than a hundred and offers a super-customized service that is tailored to their client’s needs. This is how it all started:

  • How has growing up in a family that owns a business affected you personally?

It’s hard to say. I had a relatively normal life; I went to a normal school… normal everything. I think my parents did a great job with my education. That has helped me to become an entrepreneur. My Dad always told me: “You can do whatever you want in your life, but make sure that what you do has an impact on the world.” By this, he meant that, if you think about something, just don’t do it on a small scale; start small, but make sure that it is something that you can grow and that it can have a big impact. It’s a great value perspective and I think it’s a very powerful way to see the world.

  • Tell me a bit about your journey on the road to becoming an entrepreneur. Who has inspired you?

My father was involved with some entrepreneurial activities, but actually [my entrepreneurial career] started at high school. I was part of a program call “Mini Enterprise”, where over the course of a year, I worked with a team of classmates to create a small company. I really enjoyed it. It was my first experience of what life as an entrepreneur was really like.

Later, I went to University at Solvay Business School, and they were involved in a program called “Start Academy”, which was a business plan competition in which you competed by producing a business plan with 3 other friends. The competition was judged by some of the top entrepreneurs in Belgium and they voted on the projects that were presented to them. That was the second event that really influenced me. Later, during my 3rd year at university, I completed a project on social networking and Web 2.0 and there I had the opportunity to meet some very successful Belgian entrepreneurs who had created very large and scalable web and IT companies. Meeting these guys really inspired me as well.

As far as people that inspire me, as a technology fan, I’m extremely interested in all the technology entrepreneurs that have made a name for themselves. I read a lot about them and all their stories make me excited about entrepreneurship.

  • What is the best thing about being an entrepreneur?

Entrepreneurship, in the end, is about changing things. Basically, you have a new idea and you do something differently from how it has been done before. It’s very rewarding to be able to create something that changes people’s lives and how things work. That is the main aspect. You also learn a lot in the process. I like it.

  • What is the worse thing about being an entrepreneur?

Good question! Maybe that the businesses and ideas that you create are in your head all the time. They become a very important part of your life and sometimes it’s difficult to disconnect. You have all these ideas floating around your mind… it’s very exciting, but  they are always there.

  • What do you feel the most proud of in your career so far?

Well, I’m still very young… but if there is one thing to say, it’s that it’s great to feel like I have identified a personal need, solved it, and then realized that a whole bunch of people have the same need and that I have been able to help them too.

  • Trustedfamily was initially founded by you and Edouard Janssen. Later on both your families invested in the company. What are the advantages and disadvantages of using family funding?

If you are an entrepreneur, what you need to be successful is financial resources, business expertise and the ability to add value. We needed some management expertise and some technology expertise, and we found that our families could offer us that, so it was an ideal solution. However, we also took other people on board to bring us other knowledge in areas where we felt we didn’t have it. Raising funds is not only about assets, but also about the expertise that you can get from the investors that join you.

  • How do see you Trustedfamily evolving?

Well, we started from a personal need, now we have proven that it works. We are at the stage where we know that we have something unique, but there are still a lot people that haven’t heard about us. We want to bring the company to the next level to make sure that all the families out there that have the need and believe in our vision, learn about us and use our services.

  • In your opinion, what are the distinguishing traits of next generation family business members that become successful entrepreneurs in their own right?

It’s hard to say… entrepreneurship is like a rollercoaster ride, you go up, down, up, down… I think that entrepreneurship, in the end, is about making sure that you go up on average more times than you go down. It is about persistence and passion… and if you have those, you will be very successful.

  • What is your advice to NG FB members that want to become entrepreneurs?

Start early. The younger you are, the more opportunities you have, and the lower the opportunity cost is. When you are young, you can take a lot of risk. The older you get, the more complicated your life may become, you may have a family, a big job, debt… these types of things make it much harder to take the risk of becoming an entrepreneur. I started right after university. I know many people say that is better to have some experience in a big company before branching out on your own, but I think that is better to start young; if you need experience you can find people that have it and they can help you out. That is what we have done with Trustedfamily.

If you are a next generation family business member and you want to set up a business, you should consider following Edouard’s advice: it has certainly worked well for him!

It would also be great to get your advise on becoming a successful entrepreneur. Please share it here in the comment box. Thanks in advance!

How to succeed at succession? Use the “BE PROACTIVE” formula!

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Be proactive

I believe that this is at the core of every single achievement in life. You have to be proactive; you have to make things happen. Successors that wait for others to take the lead in the succession planning process, will most likely wait forever!

Educate yourself (about yourself, your business and the world)

I don’t mean only formal education (degree, MBA…), but keep on learning at every opportunity about:

Yourself:

Who do you know you are? What do you really want? Do you have what it takes? Can you develop the skills you are missing? Do you want to? Are you willing to pay the price to succeed? Know yourself and keep improving!

Your Family Business:

What kind or business are you really in? Bus Company or transporting passengers? Have you SWOT it? Where is the industry going? Where is the business going?

The world:

What is going on the in world and how does affect you and your business? How is people behavior changing? Keep an eye on the impact of technology.

Pursue work experience outside the Family Business

Get out of the house and work far away from home where nobody knows you. It is hard to be a nobody… but with time and effort, you will survive and thrive!

Re-Shape family communication

It is time to talk about the elephants in the room. Be assertive, positive and eliminate blaming. The formula, describe situation + state how it makes you feel+ ask for what you want= clear, effective communication! Use it! It works!

Out and about

Go to networking events for Family Business, for Next Generation, for your Industry, from your University… don’t forget to network online and keep in contact.  Learnt from others, find a peer group and a mentor that can inspire and support you. Face it! You cannot make it alone!

Act as a leader

Look for opportunities to hone your leadership skills. If you are not leading a team or a project currently, look for a volunteer organization that can provide you that opportunity. Or even better, create one!

Create your own business

I believe that working outside the Family Company not only gives you credibility but it is great for your self-esteem. If you create your own business, no matter how small, your self-esteem will soar.  It will also help you to understand better the 1st generation. It is an unbeatable learning opportunity and if you are really good at it, it may produce the cash you need to buy your Family Business out!

 Think strategically

What ever you do think about how it fits in your long-term plan of leading the Family Business. Are you gaining skills in your current job that will be useful in the future? Are you creating a company that could be integrated in the Family Business?

If you are already working in your Family Business, get involve in strategic decisions and work with the senior generation to define future strategies that fit with your passions and competencies.

Impersonations do not work!

Don’t try to be a copycat of the senior generation. Have your own voice and your own leadership style.

Be vigilant and active about where you can take the Family business applying your personal passions and skills.

Value proposition

What is your value proposition? What do you bring to the table that nobody else does? Why should you be the Family Business successor? Create your own Family Business succession plan having the above questions into account. Be realistic, not only about yourself and your capabilities, but also about the senior generation and other Family members concerns and resistances.

Consider the possibility to buy your Family Company and educate yourself about ways to finance the operation.

Expect great things to happen

Be positive, celebrate your successes and learnt from your failures. Be patience, believe in yourself and keep going no matter what. Expect great things to happen and they will happen!!!