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ORIGINS
G.M.Rao‘s father was a successful dealer of jute, food
grains and gold.
Division of Wealth – Each son received some property
and INR 3,00,000.
G.M.RAO – Mechanical Engineer from Andhra University.
Worked in a Paper Mill and with PWD.
The brothers joined together and opened a trading
venture, dealing in jute like their father.
In 1988, the brothers separated as they had different
ideas. G.M.Rao wanted to reinvest the profits and expand
whereas his brothers were interested in profits.
He received a jute mill as part of the settlement.
Joined the board of Vysya Bank in 1985.
Largest shareholder of Vysya Bank and in 1993, decided to
run the bank himself.
Brought Bank Brussels Lambert (BBL) into the project, giving
it a 5 per cent stake, and upgraded the bank‘s systems and
processes with the new partner‘s help.
In late 2002, BBL was acquired by ING, with Vysya Bank
included as part of the deal, and Rao received INR5.6 billion
for his stake.
Retired as its Director and Chairman in 2006.
Learning's from the bank venture –
• Exposed to the modern world of finance and broadened my
outlook on business.
• Good businesses crashing due to conflicting family interests
on business matters and lack of governance mechanisms in
the family.
DIVERSIFICATION OF GMR GROUP
Anticipating and
mitigating
significant risks
associated with
family business
“infant mortality” Fostering
stewardship among
leveraging the
family members to
family’s special
promote the Group’s
strengths
long-term success
and sustainability.
keeping the
family
together, from
generation to
generation.
New focus on
family governance
The family discovered
invited an that the largest
form a family internationally challenge involved
council, comprising renowned family- Over the next year, the managing individual
the four male business family spent aspirations. For
advisor, Peter In 2002, the family
members working at considerable time instance, both Raju
council generated a
GMR and their Leach, to assess refining the roadmap, and Kiran expressed
long-term agenda and
wives, to begin the family’s fixing an agenda of the desire to have
roadmap for
discussing the situation and top priorities and more operational
navigating future
values, mission, visio make governance- family governance.
other key tasks, again, freedom under the
n and key policies that related and other with the help of GMR umbrella.
should go into a recommendations external experts. Throughout the
family constitution. at a two-day process, the family
retreat. kept focus on
maintaining harmony.
FAMILY PHILOSOPHY
P.M . Kumar (P.M.) was hired in 2003 to assi st the fami ly in drawing a
family governance structure, family mi ssi on, vi si on and values. P.M . was
a well-known process consultant in human behavior, with many year s of
experience of working with family businesses .
He was actively i nvol ved in strengthening family bonds and teaching the
Rao family skills for managing interper sonal dif ferences .
According to Sastr y, ― Wealth management for the family was still not ver y
well-organized . It needed to be streamlined and all the functi ons of
family of fice needed to be brought under one roof.‖
Throughout this process, family member s never felt that they had done
enough collective development to emotional bonding, togetherness,
healthy relationships and conflict resolution.
The founder s business of fice team had identified training programs and
mentoring sessions for the third generation and suggested courses and
programs they could under take as they matured, keeping in mind
emerging leader ship requirements for the business and family.
All were engaged to help the family maintain mature and positive
per spectives and develop emotional intelligence, openness and
constructive communication skills in order to foster bonding in
relationships, which was crucial to practising the values specified by the
constitution .
the family‘s male members felt that outside help would benefit
the family because all four of them were aggressively pursuing
business growth and spent very little time together or with the
family.
The facilitators drew up individual development plans with
emphasis on developing competencies, behavioral skills and
spiritual intelligence.
The family focused on team -building, cohesiveness and personal
development plans.
The family had clearly benefited yet Rao planned to reduce the
family‘s dependence on such experts.
In 2008, the family was planning to organize a series of training
programs on managing dif ferences or conflicts of interest, with
the implication that the family members would become more
skilled in engaging in a meaningful dialogue without outside
help.
As a final thought, Rao added:
My journey over the last 35 years has been one of continuous learning
experiences based on family values and beliefs:
The FBF served as bridge between the business and the family.
In 2010, the FBF included only the male family members.
The FBF met at least once in every two months.
It also determined the dividend split between the family fund
and trusts.
NON-BUSINESS FAMILY FORUM