The importance of non-relatives in leading the family business
Family businesses should be impartial to their leader’s background, believe the Chong family.
For most family business owners in Asia, it remains unthinkable that an outsider can join the leadership team of family-run companies.
Members of the older generation are often biased towards their offspring; and the younger generation tend to feel it is their birthright to lead the company. But frequently, the younger generation commence their leadership tenures too soon; and the older generation find the advent of digital channels and new technology overwhelming. Harvard Business Review cites ill-equipped leadership as a prime reason why so many family businesses fail1.
Patrick Chong, Luxasia Group Founder and Chairman, established his luxury brand distribution business in 1986. Back then, the industry was nascent in Singapore and non-existent across much of Asia. Recognising the importance of talent in growing his business, he created a culture of entrepreneurialism and transformation, which continue to motivate staff today.
"I encourage people to run their part of the business as if it was their own. We trust and empower them," enthuses Patrick Chong. "That is how we were able to grow our business across 10 markets in Asia."
I encourage people to run their part of the business as if it was their own.
From the beginning, Patrick Chong realised the criticality of embracing new market trends and changing customer preferences. With the emergence of digital channels and e-commerce, he began transforming Luxasia from an in-store distributor to an omnichannel digital company.
To capitalise on this opportunity, he asked former SingPost CEO, Wolfgang Baier, an executive with a proven track record in digital, to lead the company in 2016.
“We believe that the best person should run our business," explains daughter Sabrina Chong, Group Head of Corporate Development — having initially studied law and practised as a lawyer for several years, Sabrina Chong then studied business and finance, and later joined the family firm, epitomising Luxasia’s mantras of entrepreneurialism and transformation.
Changing customer preferences, intense competition from local and overseas players, and an increased focus on digital and mobile channels inspires Luxasia Group to continually innovate. “What has made us successful over the past 25 years will not be what will make us successful in the next 25 years," Patrick Chong asserts.
1https://hbr.org/2012/01/avoid-the-traps-that-can-destroy-family-businesses↩