For many, the notion of “family business” conjures ideas of mom and pop convenience stores or the local restaurant on Main Street. However, that is not necessarily an accurate depiction of family businesses as a whole. In fact, just over half of the 30 biggest firms in 27 developed countries are family-owned, as are 40 percent of the S&P 500.
“The family firm is a particularly prevalent form of ownership in the Asia-Pacific region, accounting for 85 percent of businesses. Some of these family firms are among the largest in the world, such as Samsung Electronics (South Korea), Reliance Industries (India) and Chow Tai Fook (Hong Kong).”
In Vietnam, THP Beverage Group is the largest family-owned manufacturer in the Fast-Moving Consumer Goods category, employing more than five thousand staff members nationwide. Growing these multi-generational family businesses beyond “Main Street” into the regional and global marketplace takes a unique approach.
We recently held a one-day event for suppliers, and a repeated topic of interest was how to manage multigenerational family businesses. Many of our suppliers have similar backgrounds to ours. They were founded around the same time in Vietnam’s history and have grown alongside us. They are still run by the original founders working alongside their children. One of their main concerns is how to avoid spoiling the next generation, which is growing up against the backdrop of a much richer country.
What we said is that most successful multi-generational family businesses take very specific steps to transfer family values from one generation to the next. These include:
- Expectation of Achievement and Rejection of Entitlement. Younger members need clear standards for behavior and achievement. Joining the family business should not be viewed as an automatic right. It is something which should be earned, not inherited.
- Respect for Elders. Respect for elders is a very Asian value, but it is key to success in any culture. After all, the senior members take responsibility for setting the “tone at the top.” All corporate cultures start from the top.
- Understanding the Second Generation. Second generation individuals will have grown up in different circumstances, so it is important that the first generation understands what motivates them.
- Respect for Stories and Experience. This is how successful companies communicate their core values and mission. It helps all family members to understand and remember what makes their family unique.
Ultimately, successful family businesses leverage their roots and familial values to compete in the corporate world. When family businesses hold onto who they are with an understanding of what the market wants, in terms of products and services, they can be just as successful as the largest multinationals. Learn how we have effectively done this by purchasing my book today.