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6. Groom and nurture the next-generation members Merck puts strong emphasis on developing next- generation members for future responsibilities in business. Hard work and merit are at the core of their grooming process. The next-generation family members at Merck have to earn a university qualification and make professional careers independent of the family business. The company has also started the Merck Family University which conducts a development programme for family members. The next-generation members who are eligible to join the business are regularly mentored by the family seniors. Merck always recognised that well- equipped, trained, and capable next-generation members are essential to take the business into the next orbit of growth and ensure long-term survival.


THE WAY FORWARD: PLAN IN PARALLEL TO TRANSFORM INTO A LASTING INSTITUTION


AUTHORS


Kavil Ramachandran, professor and executive director, and Navneet Bhatnagar, senior researcher, both of the Thomas Schmidheiny Centre for Family Enterprise at the Indian School of Business, with Andrea Calabrò, professor of Family Business and Entrepreneurship at the IPAG Business School, Nice, France.


7. Institutionalise learnings and transform continually In order to transform themselves into sustainable institutions family businesses need to continue to remain valuable to the market, relevant to the society and meaningful to the family and custodians. Merck ensures that it fulfils all these criteria. It focuses on institutionalisation of business processes, especially on the governance dimension. Through strategic acquisitions and sell-offs Merck continually transformed its business portfolio to keep it relevant for the markets it served. These efforts ensured that Merck maintained its profitability over the long run. R&D is a critical part of its business model, hence Merck ensures that these activities are integrated and the learnings are institutionalised.


PHOTOGRAPHY: MERCK, PRESS ASSOCIATION


Family businesses can complement their learning from the Merck case by applying parallel planning, an effective tool that family businesses can adopt to achieve the twin objectives of business growth and long-term survival. Parallel planning helps business families integrate their values and vision with strategy, investment, and governance activities. Most importantly, the parallel planning process takes into account the family’s expectations and business needs and aligns the family and business plans. When properly implemented over a long period of time, parallel planning ensures that both the business and family support each other’s needs and objectives, thus transforming the family business into a long-lasting institution. Merck stands as a shining


example of a family business that has been able to consistently demonstrate the effectiveness of parallel planning throughout its journey of three and a half centuries. Many more family businesses can surely attempt to emulate this feat and build a lasting legacy of their own.


CAMPDENFB.COM 65


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