Interview with Chen Ting, TM Group.
Since it was founded in May 2014, Life TM has attracted and united nearly one thousand entrepreneurs and crossover elites throughout China driven by its mission to highlight each business’s heritage and innovation. As the founder and president of the TM Group, Chen Ting is no stranger to the challenges and opportunities that Chinese family businesses face on a daily basis. Ms. Ting shares with Tharawat Magazine her in-depth understanding of Chinese family businesses, and what the future holds for these enterprises as they transition to the next generation.
Please tell us about Chinese family enterprises and the generational shift that is currently occurring.
Many Chinese entrepreneurs are in their 60s and beyond. This generation of business leaders have built up their empires after decades of struggle and have accumulated great wealth. Though the media often likes to portray them as indulging their children with luxury cars and fueling their irresponsible lifestyles, most of them are responsible leaders who have built up their companies from scratch through hard work.
The Cultural Revolution and subsequent political events have made that generation skeptical of systematic education for its youth so they place heavy emphasis on personal education and family. 90% of that generation has sent their children for education abroad, so it is clear that their language, thought process, and management styles are in line with international standards. At the same time, they know their own limitations and hope their children are able to achieve their unrealized dreams.
When we examine the second generation, it is clear that they all of them have a solid educational background, good manners, and strong learning capacity. Many have attended board meetings since childhood and have accepted enlightened business education. On top of the business genes that they have inherited from the previous generation, they have acute business sensitivity. As such, I have great faith in the Chinese family business institution.
What do you think is the greatest challenge that Chinese family businesses face?
The communication aspect seems to pose the greatest challenge. The last generation has used personal strength and heroism to achieve their business empires. They have also leveraged on their individual abilities and have ultimately proven to be very powerful.
However, they often have trouble accepting new ideas and thought processes of the younger generation because they are inclined to brush these off as mere childish musings. Compounding the problem is that the younger generation (most of whom have only received western education) is often confused about how to deal with their family enterprises especially in regards to reforms and dealing with its founding leaders.
Another major challenge comes from the friction that occurs when discussing business models and future growth. The previous generation of entrepreneurs is mostly industrialist and has built up manufacturing empires. On the other hand, the second generation has a strong interest in finance and the business of the Internet, which presents a conflict when the two try to map out the future of the family enterprise.
Tell us about succession in Chinese enterprises and the attitude of young people in regards to their family businesses.
In Chinese traditional culture, it is said, “Among all the good virtues, filial piety comes first”. Most well educated Chinese are very filial so family responsibility is an inevitable lifestyle. Because of this responsibility, the next generation member may not really like his family career, but as his parents become older, he will have a sense of responsibility to his bloodline and ultimately join the business.
There have been a number of prominent cases in which family businesses have successfully made this generational transition especially along the Pearl River and Yangtze River Delta regions, such as: Liby, NeoGlory, Far East Group, and so on. In these cases, the next generation had studied and practiced traditional culture as well as learned western governance mechanisms such as the family council, family holding company, and investment funds.
In the next decade, China will see the emergence of an even greater number of successful family generational transfers.
How does your work at Life TM assist Chinese family enterprises and entrepreneurs?
We at Life TM have established a professional family business think-tank and provide a range of services and research that are aimed at delivering rational solutions to the wealthy business families.
The think-tank includes educational services that foster family learning and development while providing a safe ecosystem that connects the elites of all generations to the wider community of entrepreneurs and business leaders.
When it comes to our product research and development services, we particularly focus on communication design that helps the family business establish a line of communication and foster understanding between its generations through consultations with visiting scholars, work shops, and more.
Why are you passionate about Chinese family businesses?
When I founded our Next Generation forum in 2009, the Chinese media had a lot of misunderstandings about the second generation (especially in regards to their wild antics and extravagant lifestyle), but most of my contacts of this generation were quite the opposite. So when I founded the Chinese Heritage Club in 2013, my initial desire was to tell the real story of the second generation, and to build a more open communication platform between the family generations. This is because I believe that family enterprises are the ultimate tool and catalyst through which we can promote China‘s social progress.
The members of Chinese Heritage Club are mainly from the second generation of family businesses and we invite many excellent entrepreneurs as mentors who help bridge some of the issues that can separate members of the business and also help push family members to take their business to the next level.
I consider myself as a connector, because I know both generations so well. It is my mission and responsibility for the rest of my life to oversee and assist with these generational issues. I like to say that succession is not a completely downright transition, but rather a continuation of innovation.