I meet a version of the same person every few weeks. Early thirties, back from a job somewhere else or straight out of a master's, now running operations at a plant their father built. Two hundred and fifty people, ₹90 crore, a second unit that came up four years ago. They know the business is doing fine and they can also see it running on something that will not scale, and nobody around them seems bothered by that.
What follows is what I would tell that person over a coffee, having had the conversation enough times to notice which advice keeps being right.
What should you do first when you take over a family factory?
Everything you inherit was a reasonable decision once
The spreadsheet with nine tabs that only one person understands started as somebody solving a real problem with the tools they had. The supplier who is more expensive than the alternative has probably delivered on a Sunday during a crisis nobody wrote down. The dispatch process that looks absurd on paper has a step in it that stops a recurring mistake.
Walk in treating all of that as backwardness and you will be right about the mechanism and wrong about the organisation, and you will spend your credibility in the first quarter. You get one reservoir of goodwill in a family business and it does not refill quickly.
The three things that are true on day one
Your father's memory is the system. Where a job is, what a customer was promised, why that particular vendor gets paid first: for most of these plants the real database is one person's head. It has worked well and it does not transfer, which is the whole problem you have been brought in to solve, whether or not anybody has said so.
The numbers you get are late and slightly wrong. Not deliberately. Month-end takes nine days because somebody is reconciling four sources by hand, and by the time a figure reaches you it describes a month you can no longer influence.
Everyone is watching how you treat the old guard. The first person you overrule in public sets the tone for the next two years. Choose that moment carefully or, better, do not have it.
Pick one number and make it true
The instinct is to fix everything, and the thing that works is narrower. Choose one number that matters to your father as much as it matters to you, and make it trustworthy and current. On-time dispatch is usually the best candidate, because he already cares about it, customers complain about it, and it is visible enough that an improvement cannot be argued with.
Making one number true sounds small. It is not, because the work of making it true drags a lot of other things into daylight: which jobs are actually where, what the stores really hold, which promises sales made that production never heard about. You end up fixing the system by fixing the measurement of it. Our piece on the five numbers every factory owner should know is a reasonable place to pick your first one.
"For a year I kept telling him the whole thing needed to change. He kept saying it was running fine. Then I showed him we were shipping late on a third of our orders and he asked me what I needed. That conversation took ten minutes and I'd wasted a year before it."Pump component manufacturer, Coimbatore
The things that go wrong in year one
Bringing in a consultant before you understand the plant. Rewriting the org chart. Replacing a long-serving person early to signal seriousness. Announcing a large software project at a family meeting. All four are common and all four burn goodwill for a benefit you could have had six months later at a fraction of the cost.
What works better is embarrassingly slow: understand it, measure one thing, fix that thing visibly, then ask for the next thing. Once you have shipped one visible improvement, the conversation about the bigger change becomes a different conversation. If that bigger change is a system, building the business case for a new ERP sets out the four numbers that carry it.
Facto works with a lot of second-generation owners, and the pattern is consistent enough that we build for it: one module live in weeks rather than a programme that needs a year of faith before anything is visible. If you're in the first two years of this and want to talk it through, talk to our team.
