Passing the baton to a new generation
There is a considerable amount of truth to the old Chinese proverb that says: "Wealth does not pass three generations." But this fate doesn’t have to be written in stone.
At our recent Entrepreneur Series event, entitled 'Building Futures', we discussed this very challenge and concluded that to avoid disaster, you need a long-term plan. This includes creating a framework for decision-making and conflict resolution, then imbedding it into the core of the business.
William Fung, Group Chairman of Li & Fung Ltd, shared a story of how his grandfather started the family businesses, whist his nephew Spencer, part of the fourth-generation to this commercial empire, goes on to discuss how he carved a role out for himself within the business and what this meant for him personally.
"Between jobs, I went back home to visit my family and that's when I started a temporary job at the entry level in the company. Somehow, that temporary job lasted 16 years and I'm still here," said Spencer, now Group CEO.
Nothing lasts forever - it’s my job to pass the baton on
Spencer himself is already thinking about the next generation and the future leadership of the business he is now part of. Whether it will be someone from within the family or not is a question yet to be answered but at least the conversation is being had. "Nothing lasts forever — companies, ideas, positions — it's my job to pass the baton whenever the time comes," he said.
Bernard Rennell, Senior Adviser to the CEO and Global Head of Family Governance and Family Enterprise Succession of HSBC Private Banking, shared his 20 years of experience of working with family businesses. As demonstrated by the Fung family, he states it's all about thinking carefully and strategically about ownership transition that will help to protect and grow the business — and also avoid disagreements within the family later on.