Company: Heritage Automobiles (fictitious), a family-owned auto component manufacturer with Rs 1,200 crore in annual revenue.
Background:
For 40 years, Rajiv Khanna has been the face of Heritage Automobiles. He built the company from a small machine shop in Pune into a Tier-1 supplier to Maruti, Tata Motors, and Hyundai. Now, at 68, he’s ready to step back.
The question is: to whom?
The Situation
Two candidates want the role. Both are family.
Aditya Khanna, 38, is Rajiv’s son. He joined the business straight out of engineering college and has been groomed for this moment for 15 years. He runs manufacturing—the heart of the business—and knows every machine, every supplier, and every foreman by name. He’s steady, reliable, and respected on the shop floor. Choosing him maintains continuity, honours tradition, and keeps the family hierarchy intact.
Priya Khanna, 35, is Rajiv’s daughter. She joined Heritage eight years ago after an MBA from INSEAD and five years in consulting. She built the export business from scratch—taking Heritage into Europe and Southeast Asia, growing international revenues from zero to ?300 crore. She’s sharp, strategic, and has transformed how the company thinks about markets. Choosing her signals meritocracy, modernity, and ambition.
The Board is split. Half favour Aditya for stability and continuity. Half favour Priya for capability and future readiness.
Rajiv has told HR privately: “I will accept whoever the Board chooses. But the family may not.”
The Dilemma
Should HR recommend based purely on capability—risking a family rupture if the “wrong” sibling is chosen? Factor in family dynamics and choose the “safer” option—potentially sidelining the more capable leader? Or suggest a co-CEO structure—which sounds diplomatic but rarely works in practice?
What’s really at stake
This is not just about filling a CEO role. It’s about whether family businesses can professionalise without tearing families apart—and whether HR can navigate dynastic politics without compromising merit.
Every family-owned business watching this decision will draw conclusions about whether succession is about capability or lineage. And every professional working at Heritage will conclude whether the company is truly evolving—or just performing evolution.
What HR leaders said
Rajeev Singh, G-CHRO, Epic Group
“I don’t see this as a choice between the son and the daughter. That framing itself is flawed. This is fundamentally a governance and ownership question, not a succession popularity contest.
Before HR or the Board debates capability, examine the shareholding structure—who owns the company, how concentrated that ownership is, and whether the business is listed or unlisted. Those factors determine how much influence formal processes actually carry.
In most family-owned firms, especially unlisted ones, the retiring patriarch may say he’ll accept the Board’s decision—but if he remains the majority shareholder, his influence doesn’t disappear. That’s the reality HR has to work with.
My preferred model is to separate governance from execution. The founder should step back into a non-executive chairman role, providing balance and mentorship. The next generation should take on clearly demarcated executive responsibilities—manufacturing on one side, markets and growth on the other—whilst a strong professional layer is inducted below them to run day-to-day operations and own the P&L.
The real test of leadership in family businesses is not who becomes CEO, but who can step back over time and let professionals take over. HR’s role here is not to pick a winner, but to design a clear, time-bound roadmap that professionalises the organisation without destabilising either the business or the family.”
Praveer Priyadarshi, Senior HR leader
“The real issue here isn’t sibling rivalry—it’s the absence of succession planning. This situation exists because succession was never treated as a long-term process. In family businesses, a successor cannot be chosen at the last minute. People have to be identified early, groomed deliberately, rotated across roles, observed closely, and evaluated on hard performance outcomes.
If the son has been running the core business for years and has delivered on revenues, profitability, and operational stability, that experience matters. Continuity is a legitimate consideration. At the same time, the daughter’s success in building the export business shows strategic capability, risk appetite, and the ability to crack new markets—skills critical if the company’s future lies in expansion.
This doesn’t have to be an either-or decision. If the business has distinct domestic and international growth engines, roles can be clearly demarcated with real autonomy. Co-leadership can work when boundaries are explicit and performance accountability is non-negotiable.
What this situation also exposes is the calibre of HR itself. In family-run companies, HR often becomes good at navigating emotions but hesitant about taking a firm, professional stand. This is where HR has to step up—present evidence, assess fit honestly, and put forward a recommendation without fear.
Succession decisions don’t just test leadership—they test HR’s credibility at the Board table.”
Mukul Harish Chopra, former CHRO, ConveGenius
“In Indian family businesses, meritocracy sounds good in theory, but emotion usually decides in practice. Professional and personal lives are deeply intertwined, especially for promoters who’ve built the business from scratch. Even when a founder says he’ll go by the Board’s decision, family dynamics inevitably shape the outcome.
That’s why these situations rarely have clean answers. Co-leadership only works when roles are carved out with absolute clarity—or when businesses are structurally separated. Without clear boundaries, shared leadership becomes a slow-burning conflict.
We also need to be honest about the gender lens. In societies where leadership expectations are uneven, decisions framed as ‘diversity’ can end up diluting merit instead of reinforcing it. True meritocracy requires a level playing field, which many family businesses still struggle to provide.
Ultimately, this decision rests with the promoter. If the son hasn’t demonstrated the ability to take the business forward, lineage alone cannot justify leadership. But if the promoter isn’t emotionally prepared to professionalise—to make hard calls, let go of loyalists, and prioritise business survival over sentiment—no Board structure or HR recommendation will truly hold.
Succession, in the end, is less about choosing a successor and more about whether the founder is ready to let go.”
Your turn
What would you do? Share your response in the comment box or share on LinkedIn with #HRKathaCaseInPoint