When it comes to famous sayings relating to family businesses, I am sure you’ve heard of this one: “The first generation makes it, the second generation spends it and the third generation blows it.”
On the surface, this isn’t a myth. The quote is based on a famous 1980s study of US manufacturing companies. It found that only one-third of businesses were family-owned by the end of the second generation, down to one-eighth by the end of the third.
But one important to factor to note is that the findings didn’t mean the families ended up with nothing. Made would have used their wealth to move into new businesses, which they made an equal success of.
I also think that people often believe that many family-owned businesses end in failure because these are the ones that we hear about in the media. The large numbers that are quietly and successfully going about their business, often do so below the radar.
As an avid self-educator, my father has read extensively on this subject and also sought expert advice on how to maintain THP as a thriving family-owned business for decades to come. He is well aware of one cardinal rule: the third generation will only fail if the first and then the second do not adequately prepare the third.
So what does this mean in practice? Well firstly, he and my mother have always been conscious of the need for a balancing act in how they treat my sister Bích and I.
They know that they needed to guide us while ensuring that we learnt to stand on our own two feet and make good decisions without their hand at the tiller. I’ve blogged before about my father’s core belief relating to this: he gives us the space to fail so that we can learn from our mistakes.
Instead of mollycoddling and spoiling us, he taught us to equate value with achievement. As a family, this means that we live very humbly and always have done. What he showered us with is advice not material goods.
He also made sure that my feet remained firmly planted on the ground when I first started working at THP. I’m sure we have come across people who lose their humility at either the first taste of corporate success, or once they start believing in their own PR. But I’ve been trained to retain my focus on the right things.
One key factor that successful family businesses share in common is having found good ways for family members to interact with other and the society around them.
Take the former first. Inter-familial strife is very common, both between generations, which have had very different lived experiences from each other and within the same generation, where a number of people may be competing for the top spot.
My family works hard to overcome this. We have clear channels of communication and a family governance charter that outlines what’s expected of us.
Here are our family’s core values: they’re similar to THP’s core values:
- Hard work means results not possessions.
- Contribute: make a positive difference to others and think beyond self.
- Integrity: honor our word
- Maintain a “Nothing is Impossible” spirit
- Leadership: being part of a family means taking responsibility to make things better for the family and live for its success.
As a family we are instilled with a duty to each other as well as to THP. We have a desire to collaborate for our long-term success.
But we also never forget that THP thrives because of our wider eco-system, especially in Binh Duong Province where our headquarters are based. We know that THP will not thrive if family members become detached from those working and living around us?
There is a very famous Vietnamese proverb, which sums this up well: “When eating the fruit remember the one who planted the tree.”
I would extend this proverb to the soil, which the tree is planted in too. If THP is the tree, then its survival and success depends on the surrounding land remaining well watered and fertile.