In a community where iconic institutions either crumble and decay or are hived off, the story of the Parsi Dairy Farm (PDF) stands out as an exception and an inspiration. Instead of the family losing interest in the business or migrating abroad or mismanaging their affairs, the fourth generation has stepped in and given the 107-year-old milk and sweetmeats enterprise a contemporary look and feel. The swanky packaging design overseen by family members and printed at an allied family concern has capitalized on the synergy between their two businesses. The packaging of the sweetmeats, ghee, toffees and other items is aimed at the burgeoning corporate and personal gift market (see "The Parsi Dairy Farm saga: All in the family,” Parsiana, October 7-20, 2023).
PDF thus joins the ranks of enduring Parsi concerns such as the Wadias, Godrej, Shapoorji Pallonji, Jeena and Company and others including retail businesses such as K. Wadia Jewellers, B. Jamshedji Jivanji, Dotivala Bakery, Kolah’s (pickles) and Union Press.
According to Wikipedia, "A family business is a commercial organization in which decision-making is influenced by multiple generations of a family, related by blood or marriage or adoption, who have both the ability to influence the vision of the business and the willingness to use this ability to pursue distinctive goals. They are closely identified with the firm through leadership or ownership.”
According to an article, "Do most family businesses really fail by the third generation?” in the July 2021 issue of the Harvard Business Review, consultants Josh Baron and Rob Lachenauer of BanyanGlobal Family Business Advisors note, "Family businesses last far longer than typical companies do. In fact, today they dominate most lists of the longest-lasting companies in the world, and they’re well-positioned to remain competitive in the 21st century economy. One-third make it through the end of the second generation, or 60 years.”
An article in The Economic Times of June 20, 2022 titled "Indian multi-generational family business: Why it’s a rare phenomenon” by Kalpesh Desai and Akshika Harikrishnan of the reputed consulting firm of KPMG cites Prof John Davis of Harvard Business School. Teaching an elective course on Managing the Family Business, Davis opines that "India has seen the decline of the joint family in business houses, which has been replaced by a loose system of living independently in proximity.” Moving from "a joint family concept to a nuclear family concept may have also contributed to different experiences and growing complexities in working together in the family business…”
The two authors however note that "there are still several family businesses in India that have perpetuated for generations. But they are still a rarity in comparison to countries like Japan and Germany where family businesses have survived for well over 200 years and in the case of some of the oldest family businesses have been passed down over 50 generations.”
A study by Helena Robertsson leader of Ernst and Young (EY) Global Family Enterprise and Family Office, titled, "How the largest family enterprises are outstripping global economic growth” states, "Over three-quarters (76%) of family enterprises on the 2023 EY Family Business Index are more than 50 years old. Many of these businesses have weathered market volatility over several generations, underlining the extent to which family enterprises are able to maintain both their success — and their succession — over time…
"As the Index shows, family members continue to play an active role in leading and managing family enterprises. For nearly half (45%) of the companies on the Index, a family member acts as CEO (chief executive officer). Nearly one quarter of all board seats (23%) are held by family members.”
Unlike in many concerns where women are kept in the background or not given their due, at PDF they are substantial participants. The board of directors will add four women to their ranks at the November annual general meeting this year. Their contribution is already considerable not only in PDF but also allied enterprises that members of the family own and manage.
An article by Anshul Dhamija in Forbes magazine, February 2019, "Family businesses: Tripping at three” quotes Gautami Gavankar, executive director, Kotak Mahindra Trusteeship Services as stating, "The third generation, which typically consists of cousins, does not want to restrict itself just to the family business… It wants to do many other things.” The article cites a finding by the Parampara Family Business Institute: "one-third of business families disintegrate because of generational conflict.”
The PDF family had its share of heartbreak and bitter differences, some of which found their way into the public domain. But they persevered and averted the tragic end that afflicts so many family enterprises.
What PDF had working for them is a combination of commercial suaveness, an influx of capital, a willingness to listen, learn and delegate, and of course most importantly, luck. Also guiding, counseling and mentoring the PDF clan is a non-family member, an astute, incisive, beneficent and perceptive lawyer.
A combination of all these factors made for the PDF success story. Other concerns may not be so fortunate. Many families have no progeny to run their enterprises after them. Look at the shuttered shops where Parsi businesses once flourished. From sandalwood kiosks to provision stores, the trail is strewn with forgotten, one-time household names.
At the World Zarathushti Chamber of Commerce (WZCC-India) annual general meeting this September 30 there was emphasis on enrolling and involving youth in the activities of the organization. Realizing the dim possibilities of doing so in a predominantly aging community, WZCC global president Capt Percy Master remarked wryly that everyone in the room was young because age is only a number. But for many businesses age is also an ending.