Should next gen get outside experience
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Should next gen get outside experience

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American thinking is that the Next Gen in a family business need to get outside experience before coming and working in the family firm. Should this same logic apply in Asian family businesses?

American thinking is that the Next Gen in a family business need to get outside experience before coming and working in the family firm. Should this same logic apply in Asian family businesses?

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Should next gen get outside experience Should next gen get outside experience Presentation Transcript

  • Is outside work experience important prior to the  Next Gen entering the family business? Asian  Perspectives Christian Stewart Managing Director Family Legacy Asia (HK) Limited
  • A common scenario  here in Asia ….• “…my son has just finished his studies ... I  think he should come and work for me now”  2
  • Western Thinking• Western thinking is that when a young adult has finished  their studies it is best to allow them to go and work  somewhere else for a couple of years, before considering  entering the family business.• Some Western books on family business recommend being  away from the family business until you have finished  "entering the adult world“ . See Appendix A.• One of the reasons given is that this period of being away  while you are a young adult is that it allows you to mature  and "differentiate" from your parents. See Appendix B.  • Other reasons are that it gives you a chance to  prove yourself away from the family environment; make  early mistakes away from the family environment; etc. 3 View slide
  • The Question…..Do you think the same logic should apply here in Asia with an Asian family? Based on your own observations and experience, do you think it helps the next gen in an Asian family to differentiate or mature if they can get this time away from the family as young adults? 4 View slide
  • Answer 1 Spot on …....many of the "successful"  Academic  families Ive seen actually adopted this  Singapore model of "learning" for their next gen. …….. So the list goes on...the skills set  acquired outside of the family are  invaluable for the family business.5
  • Answer 2 Every NEXTGEN member does best when he or  James E. Hughes Jr she individuates and differentiates—this just like  every other human being. Every NEXTGEN  Author of Family  member does best when he or she brings his or  Wealth; Keeping it in  her own dream to life in the first two stages of  the Family and  his her life and stewards another’s dream in the  Family; The Compact  third. among Generations  Since Asian families truncate their NEXTGEN  (Bloomberg Press)  members dreams and patriarchicly impose  stewarding, anything the NEXTGEN members can  do to have a few years before being stuffed into  family roles will be incredibly healthy for their  development and their families’ and the  eventual possibilities for a healthy transition.6
  • Answer 3 Answer 1: Yes, western practice tends more to  Member of 4th encourage next gen to work outside first. In  generation, Singapore  really old European family businesses, they often  based family owned  have official policies ‐ some even say no family  business can be in mgmt. In Asia, there is some awareness where the  current 50 or so year old doesnt want to force  his kids immediately into the business at all. But  from my observation, perhaps partially due to  Confucian culture, I do see lots of 25‐30 year  olds going into the family biz with no or very  short (1‐2 year) outside work experience. Follow up Question: Have you ever observed or  thought to yourself that the ones who go  straight into the family business some how suffer  for it?  Answer: Yes, thought about it. And yes, feel they  suffer from it. No chance to individuate or build  self‐esteem.7
  • Answer 4 For the next generation to work in their family business,  it is wise to let them work for someone else and join  Member of 4th the family later when they gain their experience and  generation,   earn their respect. In my case, this is the arrangement.  However, there are a few things to look at or ask  Family Owned  ourselves. Is the family business well established and  business not eager to have someone from the next generation to  come in? How urgent it is? How receptive from other  Hong Kong family members that are already in the business? In  case the next G decided to join, what kind of work  position best fit them ? Are they being pay the same as  they pay for the same job who is not a family member.  The initial orientation is also important. There is always  a tendency that the staff and management will treat  the young family differently, they are after all still their  boss (in a way) which gives the young G an uneasy  feeling being treated differently (special). It creates a  pressure on them. Dont scare them. away.  I dont think the Western thinking is that much different  from the Asian thinking  …. 8
  • Answer 5 The same expectation and logic apply to Chinese  Academic and East Asian businesses, as far as I know. Some  fore‐sighted families would ask their friends and  Hong Kong even some professionals to help train their  second gen. apart from the reasons you  mentioned, they do so also because they worry  that the 2nd gen would either be too rebellious  and question the wisdom of their parents or  appeal to the soft spots of their parents and  dodge tough work.  Having said that, many Chinese FBs do not have  the systems set up in European Fos……. As a  result, many FBs end up giving a lot of autonomy  to the 2nd gen and either use continuous  persuasion or the help of god for bringing their  children back to the family. 9
  • Answer 6 Definitely agree.  The more progressive  Educator &  families would subscribe to the idea.  Academic The more conservative ones, probably, not ‐ the thinking being that the sooner they  Manila,  immerse themselves in the business, the  Philippines better for the whole family. I think its more  of the time theyre concerned with ‐ why  spend time in other peoples business when  you need to study your own. This is an  opinion ‐ this has not been researched or  verified. But most Filipinos with businesses,  usually follow this line of thinking. …….As for  training for the [next generation] I would  definitely recommend that they do so.10
  • Appendix A: Levinson –Seasons of a Man’s Life 11
  • Appendix B: Differentiation  versus immaturitySource: Family Business on the Coach Manfred FR Kets de Vries, Randel S. Carlock, Elizabeth Florent-Treacy, Wiley 12
  • For more information, including articles to download, and videos to watch, please visit our web site at www.familylegacyasia.com Family Legacy Asia (HK) Limited Contact: Christian Stewart Email: cstewart@familylegacyasia.com URL: www.familylegacyasia.com Office: (852) 2369 3309 Fax: (852) 2369 3613 Unit A, 9th Floor 1 Chatham Road South Tsim Sha Tsui Kowloon, Hong Kong13