• Inspiration

Family-run businesses in India account for about 67 percent of all listed companies in India and account for market capitalization of more than Rs.250 crore, according to a report by Credit Suisse. Even though family businesses are a centuries-old concept in our land, a company running through into its eighth generation is a rare find.
Stationery-maker Faber Castell recently celebrated 250 years of its foundation and has seen through eight generations in that span of time. We caught up with 70-year-old Count Anton Wolfgang von Faber Castell, Chairman, Faber Castell, during his recent visit to India, and asked what it has taken his family to make it this far. Count Anton, sitting in his suite at the Taj Lands End in Mumbai, says that the most significant growth came to his company in the fourth generation. The company was started in 1761 by Kaspar Faber, seven generations before him. Fourth generation head of the company, Baron Lothar von Faber, registered the brand name and undertook a thorough modernization of the family business.
Of course, the company has not been untouched by issues characteristic of other family businesses. While Baron Lothar took over the business from his father, his brothers wanted to begin separate pencil businesses. Eventually, however, Baron Lothar was able to bring them into the family business and designate specific segments of the business to each. While one of his brothers was sent off to set up the subsidiary of the company in the U.S., his other brother took care of manufacturing activities of the company.
Count Anton says that the most important thing has been the fortunate presence of capable people in each generation. “You need to have a structure, you need to ensure that one person in the family can make the decisions or influence decision making significantly. If you cannot ensure that and if the members of the family keep fighting on decision-making issues, then you can’t make it this far,” he claims.
“Good managers and a portion of luck,” he says, is what’s needed to make a family business work. You cannot expect members of the family to hold all key managerial positions. “You have to compromise with that. If you do depend on family members to hold all key management positions, eventually you will have to compromise on quality somewhere. Family members should only be taken into the business on the grounds of capability,” says Count Anton.
Coming up with an effective succession plan is a concern for every family-run business. Count Anton says the aim of such plans should be to keep them as professional as possible.
Having worked as an intern at Faber Castell, and as an investment banker, Count Anton had to prove his capabilities before taking over from his father. His son, he says, works for a well-known management consulting firm. “You should never force your children into the company,” he advises. In the situation that there is no one in the family who wants to actively participate in the running of the company, a controlling position in the board can be given to a member and professional managers should be allowed to run the business.
While in each generation the head of the company has a different approach in dealing with things, for Faber Castell, he says, the only thing that stays consistent through the generations is the values and focus on quality from the manufacturing point of view.
He closes our conversation with a one-line advisory for all family-run businesses: “Run your family business like it’s not a family business.”

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Count Anton Wolfgang von Faber Castell, Faber Castell, family business