A Five-year Plan for Wealth Succession and Preserving Legacy in Family Businesses
Dr. Wong Kam-shing shared with Initium Media about a precise “5-year Plan” to help family firms to resolve the issue of succession.
There’s a saying that “clogs to clogs is only three generations”. That’s why for many family firms across the globe, wealth succession is the key to survival.
Most successful corporations in Hong Kong started out as family businesses set up after World War II in the 1940s and 50s. According to a 2015 report by Taiwan Institute of Directors, a total of 743 firms in Hong Kong were held by 625 families. These companies are now in a critical stage of transition. Hong Kong tycoons on the Forbes’ Rich List such as Li Ka-shing and Lee Shau-kee are now planning to pass down their gigantic fortunes to the next generation.
Dr. Wong Kam-shing, Managing Director of Kowloon Watch Group and a Family Entrepreneur-in-Residence of the Centre for Family Business at The Chinese University of Hong Kong Business School, has been looking into factors that facilitate successful transgenerational entrepreneurship since 2009. In an interview with Initium Media, he said first and foremost the older generation must come to terms with the mindset of their potential successors. “It would only be wishful thinking that young members of the family are willing to take up the torch. Many of them have been studying and living abroad and would have no trouble landing a job in any major firm. So it’s normal that some of them don’t see working in the family firm an interesting prospect.”
During his seven-year research, in which he studied different cases of family firms, Dr. Wong found that many young people didn’t want to take over their family’s business because they didn’t want to be called a “crown prince” or to be known as someone living off inherited wealth.
“If the company is running smoothly, then people will criticize them of taking advantage of a successful operation or lacking the guts and talents to beat their own path. These are of course push factors that deter the next generation from taking over their family businesses,” he added.
After much research, Dr. Wong came up with a precise “5-year Plan” to help family firms to resolve the issue of succession. The step-by-step approach helps the senior generation to assist younger members to take over their family business while assessing the latter’s attributes as leaders… Read More (PDF)
This article was published in a website called “Leave Your Mark” commissioned by Credit Sussie and is also available in Chinese (PDF).
Source: Initium Media
Date published: 14 October, 2016
Image: thecraftbeergirl.com