Family Business Sharing Series 2

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CORPORATE STRATEGIES

THRIvING A HUNDRED YEARS AND bEYOND by: Lee Sin Poh

Family values and harmony, intergenerational understanding and adaptability to changes are definitely important factors for family business succession. See what two century-old family businesses – Chop Wah On and Gardenasia – have shared on this. tong Kok Wing 3rd generation member of chop Wah on tong kok Wing and his siblings run chop Wah on in chinatown. this traditional medicated oil company was established in 1916 by their grandfather. until today, all of chop Wah on’s products are manufactured in its own factory, based on secret formulations known only to immediate family members. now in its third generation, chop Wah on continues to retail its range of proprietary medicated oils and balms together with its signature preparation of 100 per cent crocodile oil.

Kenny eng tok Ching director, nyee Phoe group gardenasia Pte ltd kenny Eng belongs to the fourth generation of the nyee Phoe family business, a landscape architectural firm with a legacy of over a hundred years. in 2000, he created gardenasia with the original intent of having a sales arm for indoor landscape business under nyee Phoe group. recognising the potential of the lifestyle industry, he embarked on the journey of hortitainment vision, and eventually strategised and rebranded gardenasia into a nature-based event company.

in conjunction with sccci’s 110th anniversary celebrations, leaders from two century-old family businesses – chop Wah on and gardenasia – were invited as guest speakers in the second family business sharing session co-organised by sccci and ubs on July 27. talent attraction, family values and harmony and succession planning were amongst the key topics deliberated in the panel discussion. guest speakers tong kok Wing (second from left) and kenny Eng (second from right) shared their insights on family business succession, together with ng aik-Ping (far right), director of ubs family advisory practice in asia Pacific. Eddie gan, Managing director of ubs ag (far left) moderated the panel discussion.

RECONCILING OBJECTIVES: FAMILY HARMONY AND BUSINESS GROWTH

both of the family business leaders engaged in an extensive discussion

in the sccci-Pwc family business survey report published in early 2016, 64.7 per cent of the respondents cited talent attraction as the biggest challenge faced in their family businesses, followed by succession planning (54.1 per cent). a total of 112 family businesses participated in this survey.

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on how their businesses have lasted through a century. in particular, they agreed on the importance of preserving family values and harmony in running a family business. kok Wing, being a member of the third generation of the business, said that at times he would even prioritise family harmony over business opportunities.

“We would rather forgo business opportunities if they create disharmony. business opportunities come and go, but when family harmony is destroyed it will be hard to mend it.” having worked in and stepped out from the corporate world, kok Wing is clear about the differences between the two. “in the corporate world, profit is probably the major concern, but in a family business, emotion could play a big role and you need to be more sensitive, such as ‘giving face’ to the elder and even the younger ones.” as a firm believer in the saying “from tiny acorns great oaks grow”, he is very confident that chop Wah on will one day become a “great oak” in the medicated oil and balm business in asia and other parts of the world.

UNDERSTANDING THE INTERESTS OF THE NEXT GENERATION

according to a recent survey conducted by sccci, talent attraction and succession planning are considered the biggest challenges faced among local family businesses. therefore, many family businesses have seen the need to better communicate with and understand the younger generation, including family and nonfamily members, to facilitate business succession. in his sharing, kenny addressed a common phenomenon. Many business owners blindly strive for what they think will do good for their children, without being truly conscious of the aspirations of the next generation. at the same time, without having effective communication, children might not understand the hardship that the

CORPORATE STRATEGIES

founding generation has been through and the underlying considerations in their decisions. kenny also shared the importance of rebranding company image in order to attract young talents, particularly for a traditional industry like his. “the business model was once frustrating as i couldn’t see where i could bring my business to, until i chanced upon the concept of ‘agri-tainment’ in 2003, a concept brought into singapore by it-savvy youngsters. i realised we should embrace this concept to make the business cool and young to attract the younger generation. We organised roadshows to introduce ourselves to the public, and in 2005 we also started doing event management. but despite these changes, we always keep nature as our core business and make sure people understand who we are.”

MINDSET SHIFT: FROM “DO WELL” TO “DO GOOD”

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generation, or in his own words, a mindset change from ‘do well’ to ‘do good’. in his view, both profits and happiness can be achieved at the same time in a social enterprise model. “in the past, we do well and then only we do good. but money is never enough, and many of the times you forget to give back to the society, and if you are not happy with how much you have, you will never be happy. today, the younger generation’s mindset is more on ‘do good’ – to solve certain problems in the society. but to do good you need to do well too. i am going towards this social enterprise model, with the dream of narrowing the gap between the environment and people, and it means as i get rich, more people will also appreciate nature. this is the kind of dream that the younger generation is looking for, not just about building a big empire.”

the change in the younger generation is not just about interests and taste in fashion but also values and dreams. in the panel discussion, aik-Ping from ubs expounded on the significant mindset change among the younger generation, and emphasised the importance of understanding their aspirations.

“While conducting a programme for the second generation in beijing, i observed that most of those foreigneducated youths do have real dreams and aspirations to change the world or fulfil social responsibility instead of just entering big corporates – a much more common path in the past generation.

When they were asked what makes a great family business, the answers were sustainability, employees’ happiness, and balance of interests between various stakeholders from suppliers, customers to shareholders. they are ahead of the game, which made me pleasantly surprised.” similarly, kenny also realises that the concept of social entrepreneurship is prevailing among the younger

IN HIS OPENING REMARKS, PRESIDENT THOMAS CHUA SUGGESTED THAT FAMILY bUSINESSES CAN DO MORE TO LOOK AFTER bOTH THEIR “FRONT DOOR AND bACKYARD” (前门和后院), WHICH MEANS WHILE DEvELOPING THEIR CORE bUSINESS, THEY CAN DEvOTE A SEPARATE EFFORT TO PRESERvE AND GROW THEIR WEALTH THROUGH FUNDS MANAGEMENT.