For the past couple of years, I’ve used this blog as a platform to examine how THP conceptualises value creation and outline the different processes we’ve put in place to achieve it. I’ve talked a lot about core values, as we view these as the foundation stone for both our short- and long-term success.

One issue, which I’ve spent less time discussing is the advantage of being a family-owned business structure within the wider corporate sphere. It now feels like a good time to do so, since there’s been a clear trend towards appreciating the role that family-owned businesses play again.

This was not the case for much of the second half of the 20th century. The focus then was very firmly on publicly owned companies.

There was always an assumption that a stock exchange listing represented the end goal for a privately held company. This was understandable for one very important reason: being publicly listed gave companies a second pool of capital to tap outside of the banking sector.

But that has now changed. The growth of the private equity and debt markets means that companies have a wider menu of financing options. There is less pressure to list.

So too, publicly listed companies are under constant pressure to deliver short-term shareholder value through their quarterly earnings. This does not sit so well in the ESG era where there is a much stronger focus on creating long-term value to ensure a sustainable future for all mankind.

How family-owned companies thrive

Being able to create long-term value is a key area that differentiates family-owned companies. As a privately held company, we do not need to keep generating quarterly earnings that are higher than the last three in order to keep our shareholders happy.


This means that we are also not under pressure to find cost savings to ensure that those quarterly results are on an ever-upward trajectory.  We can ride out downturns like Covid-19 without cutting staff, for instance. This loyalty to our staff pays dividends because it engenders long-term loyalty and aligns with the S of ESG.

We can also make long-term investments without feeling under pressure to generate a quick payback. One good example of this concerns the investments we are currently ploughing into plastic recycling plants.

They are good for the environment and we know they will be highly profitable over the long-term. But they are not right now.

At the other end of the scale, we can be very short-term (in terms of timescales) when we want to take advantage of a new business opportunity. Our longstanding expertise and instinctive understanding of the business enables us to act quickly without getting caught up in a lot of red tape.

The reason we can do all of these things is because family-owned companies do not think in terms of quarters, but in terms of generations.

The importance of continuity at the top

The reality is that many CEOs of publicly-listed firms get at most five to 10 years to make their mark before another face takes their place at the helm. My father does not need to worry about this.

Neither do my sister Bích and I. We have both been serving a long apprenticeship at THP. This has given us the opportunity to learn about the different parts of the business and to feel confident about our future while we are doing so.

The security and confidence that family-owned business members feel, means that they’re typically not nervously looking over their shoulders at “rival managers” who might take their place, as is often the case in many organisations. Instead of having to direct their energy inwards to shore up their personal position, family-owned business members are able to look outwards to the benefit of the wider company.

And when the Tran family looks outwards, our focus isn’t on shareholder capital but stakeholder capital. We are always thinking about how we can improve and deepen our relationships across the whole value chain: from suppliers and distributors to our employees and end customers.

This brings me back to the opening of this blog where I mentioned the amount of time I’ve spent writing about THP’s core values. All companies highlight the importance of their own.

But at publicly listed companies, employees often feel that corporate values exist because companies feel they need them rather than live them. It’s the complete opposite at family owned businesses.

Culture and values stand at the heart of every family owned business. Indeed, one of the most important things that any family-owned company needs to do is to formulate the values that will enable it to stay successful from one generation to the next.

It essentially revolves around the following three questions: who are we, what do we stand for and where are we heading?

Long-term vision

In addition to THP’s core values, I’ve always previously blogged about THP’s 100-year plan, which provides our long-term vision. A century is a long time in the corporate world, but not within the realms of family businesses.

Think of the Japanese drinks company Suntory: founded in 1899 and run today by Nobutada Saji, great grandson of the founder Shinjiro Torii.

Drinks companies seem to be especially well suited to family ownership. One example is Bacardi, founded in Cuba back in 1862 by the Spanish wine merchant Facundo Bacardi Masso. Initially famous for its white rum, the company is still going strong five generations later under the chairmanship of Facundo L. Bacardi.

Another is the Dutch brewer Heineken established two years later in 1864 by Gerard Adriaan Heineken. Today, his great grand daughter Charlene de Carvalho-Heineken still retains a controlling interest in the company.

All of these examples have expanded from their home base to become global drinks giants. THP has also been expanding internationally and our aim is to become a regional champion as well as a Vietnamese one.

One other factor that family-owned businesses often share in common, are deep roots in the community that surrounds them to the benefit of both. It is another reason why they have such an important role as ESG comes under the spotlight in the corporate world.

Family-owned businesses typically feel a responsibility towards the surrounding community and make investments in it: providing job opportunities, creating a suppliers’ eco-system and through outreach such as CSR programmes, or sponsorship of local sporting and cultural events.

Family-owned companies, which remain grounded in their local communities, will also remain successful. As a natural corollary family-owned members need to remain grounded too.

Living a “Crazy Rich Asians” kind of lifestyle runs completely counter this. This is why you will not see my family living a jet set lifestyle: we work harder than everyone else and never take what we have for granted.

We live in an apartment above the factory rather than a grand house and when travelling we often take Ubers and rent AirBnBs. Ours is a modest lifestyle.

My parents taught Bích and I the importance of this from a very young age. Staying humble when success comes knocking is very difficult for any human being, but ultimately it is always rewarding.

The opposite approach inevitably leads to hubris and potentially the loss of the family-owned firm. This is an issue I address in a companion post about how family-owned firms can avoid succumbing to the famous three-generation rule, or as we say in Asia from rice paddies to rice paddies.