March 3, 2007, Sariska Palace Resort, Rajasthan. It is a crucial date and location for the GMR family. It was on this day at this venue that GMR family members signed their family constitution in the presence of senior executives, one of the first business families to do so. The first-generation business family thus sent a clear message to its employees that it would stick to some ground rules of governance and transparency. It set out a long-term sustainable governance structure in writing, one which clearly delineates the rights and duties of family members.
|Size: Rs 6,425 crore|
No. of generations in business: 2
Key measures in place: Family constitution drawn up, governance structure spelt out
Goal: To be an institution in perpetuity
Mantra for success: Practice the constitution
"To succeed, a business family must practice the family constitution, and not let it remain on the bookshelf," says GMR Group founder G.M. Rao. "It should remember that it needs to manage the family like a business, and the business like family," He believes processes are key. "We have created processes for institutional linkage between family members in business and professional managers," he adds. "We have created a succession planning process from the family to the business that will see us through in terms of leadership for a long time to come. We have also created a strong and supportive community of some of the best brains as advisers, coaches and mentors."
But the agenda of the Rs 6,425 crore infrastructure company is clearly still set by the family. Rao feels it is important to attract and retain the best professional talent, but he gives much weight to family input as well. Each family member heading a business, he says, provides essential elements of networking, entrepreneurial risk-taking and, most importantly, embodies the spirit of GMR. He also believes in role rotation among family members within the business, which helps to create in them an "integrated perspective", enabling family and business cohesion.