Monthly Archives: March 2016

Lessons from Asia’s richest families

IN THE spirit of Lent, I purposely handpicked the sibling billionaires Robert and Philip Ng, not just because of their inspiring story about sibling and family relationships, best practices in family and corporate governance, and diversification strategy, but also because of their deep and abiding faith as Christians. I highlighted the first three lessons last week and will now complete the last seven key takeaways that will allow family business leaders reading my column to reflect and eventually thrive in a very tough and challenging business environment.

Allow me to continue with the fourth success formula:

  1. ​Acquire additional skills.

Robert Ng is not only a property tycoon, but also a trained lawyer. His brother, Philip, has a degree in city planning, as well as civil and geotechnical engineering.

New skills complement and enhance your decision making criteria. It also provides you with a deeper strategic insight by training your thoughts on the bigger picture and not just on isolated frames.

  1. Expand the portfolio.

In 2012, Philip launched Far East Hospitality, Singapore’s largest hospitality portfolio by asset value. Far East Hospitality made its first acquisition after the IPO when Rendezvous Grand Hotel was purchased for $210 million. It now has a market capitalization of $1.42 billion.

​6. Leave footprints islandwide.

They might not know it, but nearly everything Singaporeans do is associated with the brothers’ ventures — from purchasing a packet of Yeo’s winter melon tea to eating ice cream at Cold Stone Creamery to a staycation at Quincy Hotel. That’s how much control the brothers have over various industries in Singapore.

​7. Diversify investments.

When the real estate market in Singapore and Hong Kong softened and became sluggish, the Ng brothers remained unfazed despite their revenues from Far East Organization and Sino Group dipping by nearly $1 billion to $4.6 billion. They proceeded to purchase a $142 million office tower in Sydney and a $6 million island in New South Wales, before turning their focus back to the Singapore market. Under Far East Organization, Philip intends to pump in $328 million in erecting two new hotels on Sentosa’s conservation site.

​8. Harmony breeds prosperity.

You know what happens in a typical drama serial – two brothers fight over inheritance and neglect the company business. In the end, they may even have to declare bankruptcy. Too far fetched? Definitely not.

Take Yeo Hiap Seng’s (or better known as Yeo’s) case, for instance. In 1935, the homegrown beverage company started as a soya sauce firm but fizzled out in 1994 as a result of a family feud. Today, Yeo’s is owned by Far East Organization and is one of Singapore’s largest food and drink producers with approximately $945.31 million in market value.​

  1. Have faith.

Philip Ng is a Christian and believes in involving Christ in the workplace and practicing Christ-centered leadership. So what does this billionaire say about faith?

Many may have expected to hear the secrets of building business and amassing wealth. Yet, in one of his speeches, he quoted instead one of the stories from the Bible.

“When a rich man asked Jesus, ‘what must I do to inherit eternal life?’ Jesus replied, ‘You shall not murder. You shall not commit adultery. You shall not steal. You shall not give false testimony. You shall not defraud. Honor your father and mother.

‘Teacher,’ the man declared, ‘all these I have kept since I was a boy.

“Jesus looked at him and loved him. ‘One thing you lack,’ he said. ‘Go, sell everything you have and give to the poor, and you will have treasure in heaven. Then come, follow me.

“At these words the man’s face fell. He went away sad, because he had great wealth.”

Philip went on saying, “The ironic thing about possessions is that you don’t possess the possessions; the possessions possess you.”

  1. Don’t forget your roots.

In 2011, the Jurong General Hospital was renamed as Ng Teng Fong Hospital after the Ng brothers donated $125 million to the hospital. Philip Ng said “the gift served to give back to the Singapore community as well as leave a lasting memory of our father”.

And if I may add to the success lessons attributed by the online magazine mustsharenews.com to the Ng siblings, a key barometer in measuring the longevity of any family business is how the succession process is planned and implemented. Success will never happen without a succession plan or even with a flawed plan. The secret is doing the plan early as the transition takes anywhere from five to 10 years.

The process of selection, training, supervision and allowing the next generation leader to assume an influential role with daunting responsibilities can be overwhelming if done hurriedly. Rushing the succession due to an event triggered by a death or illness of the patriarch can be destructive and will cause more harm than good.

Moral of the story? Never be afraid to dream big, keep the faith, execute plans for the long term, work not just hard but with a burning desire to make a difference and finally prepare the smooth handover to the deserving and most qualified family member!

Asia’s richest families

AFTER a poll conducted among global expatriates, Singapore was adjudged for the nth time (4th consecutive time) the most expensive city to live in. Flying to Singapore three times in a period of five days the past week because of my regular family business advisory work is a normal itinerary for me every month. This just goes to show that as a hub, it’s really living up to its name as the destination of choice for practically all kinds of business in Asia.

Singapore pride

This compels me to link this exciting city-state to the myriad of opportunities that the market reciprocated to two siblings/tycoons. I am referring to siblings Robert and Philip Ng, Singapore’s richest duo and principals of Far East Organisation and Sino Land. According to Forbes, the siblings have an estimated net worth of $12.8 billion.

If you’re thinking how on earth the world’s richest people become so rich and successful, I am hoping my series on success lessons, straight from their own accounts, would spur you on to chase your dreams and eventually become one of them, too. After all, nothing is impossible to attain in this world if one puts all of one’s guts, determination, hard work coupled with a little help from the Great Architect of the Universe, up there.

The brothers are sons of real estate tycoon Ng Teng Fong, who inherited their father’s real estate empire and continued to bring it to greater heights. Not everyone is born with a silver spoon – some might be luckier than others. Their father, Teng Fong, made it from zero to hero, the epitome of a rags to riches tale. He had no rich father, no degree, but made it with determination, hard work and foresight. When he passed on, he left behind a legacy succeeded by his sons, who helped expand the business.

Due to the sluggish real estate industry in Hong Kong and Singapore, the siblings’ fortune has significantly dropped. Nonetheless, their massive wealth is acquired mostly from the Hong Kong-based Tsim Sha Tsui Properties, where Robert Ng served as chairman. Also, he has been serving as the chairman of Sino Group since 1981.

Today, the Sino Group is considered as one of Hong Kong’s leading property companies. It is comprised of three publicly traded companies that are run by the Ng family.

These companies include Tsim Sha Tsui Properties Limited, Sino Hotels (Holdings) Limited, and Sino Land Company Limited.

In an online article researched in www.therichest.com, the group is involved in the development of residential and commercial infrastructures as well as industrial, office, and retail properties. They also invest in club management, as well as hotel development and management.

There are different routes to success, and although the Ng brothers’ wealth might not be entirely self-made, their story is still nonetheless impressive.

They’ve made their mark not only in Singapore, but also in Hong Kong and even as far as Australia.

So, what is their success formula?

  1. Have a successful and inspiring father.

The road ahead is always made easier if the foundation was laid for you. Their late father, Ng Teng Fong, had already developed Far East Organization into a conglomerate with over 700 malls, hotels and condos in Singapore and Hong Kong worth over $6 billion in value. After their father’s demise in 2010 due to cerebral hemorrhage, the brothers worked together to grow the business.

  1. Dabble in real estate in land-scarce Singapore.

Real estate is king. One in six houses in Singapore today is built by the Ng family. For a country where ownership of real estate can be acquired via HDB, leasehold or freehold, scarcity of land will always be a perennial challenge for the government to supply inventory to its citizens but also to the growing foreign population that chosen Singapore as their home.

  1. Share the workload.

The Ng family owns developmental organizations Far East Organization and Sino Group. While elder brother Robert manages the Hong Kong company, younger brother Philip takes care of the business in Singapore. In most families in Asia, sibling rivalry is always a problem that when unchecked can morphed into real conflict.

The key for any business to grow is through three governance initiatives–family and business governance where family members desirous to join the family business must follow qualifying standards first before being voted to be fit to join the family business.

Ownership governance can be in the form of a shareholders agreement where owners are obligated to follow managing protocols including the selling of shares to third parties.

Part II will follow in my next column.

Lessons from China’s richest man (part 2)

“Never start a business just to make money. Start a business to make a difference.” – Lifted from successstory.com

THIS quote, extracted from an online magazine, successtory.com, best applies to the Chinese business tycoon Wang Jianlin.

Known as “the wealthiest person in China”, he never started business with a motive of quick money during that point of time. The real estate honcho was more interested in longevity.

It further stated that Wang Jianlin says, “Great companies are born, not developed, because each company has its own DNA,” and that is absolutely true in his case.

Owner of Dalian Wanda Group, which is one of the largest and best real estate developers, Jianlin purchased AMC Entertainment for $2.6 billion in 2013. His secret is rather straight to the point – it is pretty easy to achieve results with simple tricks than with complicated ones.

Let me continue what I wrote last week about Wang’s success formula:

  1. Stay close to the Chinese leadership.

Wanda only cooperates with one Chinese state-owned enterprise for its construction operations, and Wang has sought to align his business priorities with what the ruling Communist Party has decreed. For example, he’s increasingly interested in investing overseas — especially after the State Council in 2014 released specifications urging private Chinese companies to go global, he says.

Still, it’s a difficult road to navigate. “Government-business relations are very complicated in China,” Wang says. “It’s even more difficult than completing a Ph.D. course at Harvard.”

  1. Minimum target: Be No. 1.

“There’s nothing wrong with being No. 1 worldwide,” according to Wang. But part of the fabric of success means instilling company-wide ambitions and goals with all employees to build a distinctive company culture, he says.

To help with that, he has an internal website and monthly company magazine that he describes as “the core media for spreading Wanda’s corporate culture.”

A collection of touching success stories about employees are published annually to boost company morale. Wang also recommends one book each year for all employees to read. Outstanding employees get a bonus paid vacation and an invite to a splashy annual conference to rub elbows with Wanda company executives.

  1. Don’t read books on corporate philosophy.

“One of the most defining characteristics of my success is that I’ve never had full trust in books. You cannot simply copy models that have been proved by successful entrepreneurs. What worked for Wanda may not work for another firm — circumstances and industries change,” he warns.

At a Harvard lecture, Wang was asked about his next business goal. He said, “I’m still on my way to get where I want to be. I mean it. The way I defined success for myself is to lead Wanda to become a world-renowned company or being in the top 10. That’s my dream.

“Now, Wanda might have gained some awareness globally, but it’s still far from being a real international brand. I hope that, in the future, when people are talking about Wanda, it could be like they are talking about Microsoft, Apple, or Wal-Mart nowadays.

“To build a top brand as a leading Chinese enterprise, it’s my dream. Speaking of when I could achieve it, maybe in four years at the fastest pace, or seven to eight years at a slower pace. I will retire by then.”

Lessons from China’s richest man

LAST week was a relatively tough but gratifying week for my family, as we were practically living in a suitcase for six nights while traversing Osaka, Manila and Hong Kong. My family business coaching work in Japan and a speaking engagement in Hong Kong to celebrate Julie’s Bakeshop’s 35th Anniversary were the highlights of the twin overseas trips. While in Hong Kong, which is a Special Administrative Region (SAR) of China, I decided to research on the success lessons of Wang Jianlin, China’s newly minted richest billionaire with a fortune of $40.7 billion. Wang is almost four times richer than our local taipan, mall king Henry Sy.

In a Business Insider report, Wang Jianlin, a former People’s Liberation Army soldier who is now a real estate mogul and the world’s largest cinema chain operator, is the richest person in China and he’s caught in a riches race with Hong Kong business magnate Li-KaShing to become the wealthiest man in Asia.

Wang, born in Sichuan Province in 1954 just after the Communist revolution, spent the first few decades of his life in anything but luxury. In 1970, Wang entered the military, where he remained until 1986 when he took a city government job in the city of Dalian in Liaoning Province. Wang became chairman of Wanda in 1989 at age 35.

His fortune more than doubled following successful public offerings of his real estate firm Dalian Wanda Commercial Properties, which has 125 shopping plazas and 68 five-star hotels, and Wanda Cinema Line, one of China’s largest movie theater chains.

According to a Forbes Magazine report, Wang bought 20 percent of Spanish soccer team Atletico Madrid and purchased the US organizer of Ironman Triathlons for $650 million. Wang’s Dalian Wanda Group purchased US movie theater chain AMC Entertainment Holdings for $2.6 billion in 2012 and took it public in December 2013.

His Wanda Group teamed up with the Auchan Group to invest 3 billion euros, or $3.3 billion, in a business and entertainment center in Paris. The project will be the largest ever in France by a China company, and will include an indoor and outdoor theme park, stage show, hotels, and business and conference centers.

The French investment is part of an aggressive push by 60-year-old Wang to move Wanda beyond its roots in China’s real estate business. The company has in recent years expanded into entertainment, particularly film and sports, and committed billions of dollars to overseas investments. The project in France will be located next to the Charles de Gaulle Airport, about 10 kilometers from downtown Paris. Some 14,000 jobs will be created once the facility begins operation.

Wang’s recent book, a compilation of public speeches entitled “The Wanda Way,” claims to give an inside look into his managerial philosophy and the values that turned his company into a giant conglomerate with big global ambitions.

Here are some nuggets of advice from Wang as detailed by Sophia Yan in a CNN report:

  1. Get tough in the army.

Wang joined the Chinese military as a teenager in 1970. His gruelling training involved epic marches that took the soldiers through “knee-deep stretches of snow.” He recalls, “We were deprived of everything. In the snow, we had to dig our own hole to spend the night. Anyone who faltered could forget about being chosen to move up that year, or earning your Exemplary Fighter award.” This experience built his “teeth-gritting spirit and a desire to fight until the end,” he says.

Wang suggests there’s a direct relationship between a military background and success, pointing out that many top Chinese entrepreneurs previously served in the military.

  1. Differentiate and innovate, like Starbucks.

“The first key is to understand how you can differentiate yourself from others and be innovative,” Wang said. “For instance, everyone knows how to sell coffee, but Starbucks redesigned the coffee-making process, innovated the business model and became a successful chain business.”

Wang disputes the idea that only high-tech companies can lead the way forward — “No matter whether you are in a traditional or an emerging industry, as long as you’re capable of innovating the existing business model, you can reap super profits.”

Part 2 will continue next week.

The Year of the Fire Red Monkey: So what next?

I AM in Japan now and it’s the tail end of a relatively normal winter. Just like any curious business coach flying in another Asian country, it is customary for me to become inquisitive, so I asked colleagues in the tourism sector how Filipino visitors fared in comparison with other Asian neighbors.

Clearly, service providers have listed Chinese visitors as tops in the list, but they are thankful that the number of Pinoy tourists has started to gain traction since the Japanese Government relaxed its visa entry restrictions.

It seems ironic that the sole bright spot in Japan’s economy is inbound tourism, boosted by sharp increases in Chinese visitors on shopping sprees. The number of visitors to Japan in the first 11 months of 2015 rose 47 percent over the same period of the previous year, and the annual total is estimated to have topped a record 19 million.

The figure is certain to exceed 20 million for the first time this year (as opposed to our five million tourists annually) and is expected to generate up to five trillion yen in fresh demand and have major ripple effects across the country.

However, when I shifted my line of questioning to the future of the Japanese economy, they appeared to be unhappy and countered that the Philippine economy fared better. They are correct.

The Japanese economy

According to a Japan Times article, the economic landscape remains a mixed picture. Japan narrowly escaped a second recession under the current Abe administration when the revised July-September gross domestic product (GDP) data marked annualized one percent growth from the previous quarter.

But the pickup in consumer spending and capital investments by businesses remains sluggish, and just like the Philippine economy, exports are dampened by decelerating growth in other economies, led by China.

It went on to cite the stock market turbulence in the year’s first week of trading as a precursor to the prospects of the economy. After three years under Prime Minister Shinzo Abe’s trademark policies, they can still feel the uncertainties. Positive pronouncements of growth do not seem to trickle to a majority of the Japanese economy.

Japan Times went on to highlight that “government forecasts that GDP growth in the fiscal year beginning in April will reach 1.7 percent in real terms—up sharply from around one percent estimated for fiscal year 2015 and more optimistic than what many private-sector economists predict. The Abe administration should be on guard against the various downside risks to the economy and be ready to take appropriate steps.”

The slowdown in China’s economic growth is another factor that has affected most Asian investment appetites, the Philippines included.

What about the Philippines’ economic prospects?

According to a report presented by the Asian Development Bank (ADB), “private consumption and investment are expected to maintain solid growth in 2016. Inflation forecasts are revised down in light of unexpectedly low inflation so far this year, averaging 1.7 percent in the first eight months, and the assumption that global oil prices will increase only slightly in 2016 and that global food prices will be stable. The trade deficit widened but growth in remittances and services exports, mainly from business process outsourcing and tourism, kept the current account in surplus.”

In the Philippine Statistics Authority’s Monthly Integrated Survey of Selected Industries (MISSI), the manufacturing sector’s Volume of Production Index (VoPI) slightly grew by 1.4 percent in April 2015.

The chemicals and tobacco industry sustained their strength for the period, countering the slowdown in the production of food and petroleum products. Also, leather, printing, basic metals and machinery (except electrical) registered double-digit growth.

However, former Economic Planning Secretary and NEDA Director-General Arsenio M. Balisacan said that despite the positive outlook, the adverse effects of El Niño and uncertainties in the global market still pose a significant threat to the Philippine economy.

So there, a comparative picture between the Japanese and Philippine economies. It appears that our country is more progressive. How long we can sustain the momentum is such a difficult task for economists, especially with El Niño and the national elections happening this year.

There is no substitute for innovation, differentiation and hard work.

The key is very fundamental, Feng Shui or not, nobody likes change, but it is a reality. The key is to future-proof your business and prepare a game plan that integrates any leadership change.

After going through the three-part series and reading the assessments of business officials/consultants and comparing them with those of Feng Shui experts, I see continued change. Ben Franklin once stated: “When you are finished changing, you are finished!” This applies perfectly to the big industries or any family business for that matter. Success and failure are not solely reliant on company size, equipment or ownership structure.

How we take advantage of opportunities as well as avoid problematic issues are what will make us relevant and successful.

Industries to watch in the Year of the Red Fire Monkey

AS A recap of what I wrote last week, those born in the years of the Sheep and Monkey would be financially blessed this year. Maritess Allen, the feng shui master, goes on to say, “The number 8 (wealth star) flies to the southwest this year. This is the corner of the Sheep and the Monkey, so they will enjoy the benefits of the wealth star throughout the year. Other lucky signs of the year include the Rabbit (prosperity), the Dragon and Snake (victory, luck), Horse (windfall), and Rooster (romance, luck).

Unlucky Signs

Not so lucky are those born in the years of the Dog and Boar, who will have to deal with a lot of arguments because of the conflict star. Likewise, those born in the Year of the Rat will have to contend with the Robbery Star. Most unlucky are those born in the Year of the Tiger and the Ox, who will have to deal with the misfortune star. Those born in the Year of the Horse will also contend with the three killings star in the south.

“The Tiger will have to be especially careful because in addition to being the enemy of the Monkey, it has to contend with the misfortune star,” the feng shui master says. All of us have to look after our health, though, as the illness star flies to the center of the chart.

“The year is hot, with three fire elements. There are also three metal elements, one wood and one earth. What is missing is water,” Allen says.

Property sector

Transformation, expansion and opportunities come in 2016 for the real estate industry but the market will see a very competitive landscape, as the number of developments rise and customers become more discerning.

Based on the forecast of geomancer Paul Ng, businesses involving water, metal or earth would be favorable and prosperous this year because they are in harmony with the fire element. This prediction is also supported by feng shui expert Joey Yap. According to him, since fire is dominant and fire creates earth, the general outlook is still positive despite the economic slowdown in other neighboring countries. Certified master feng shui consultant Joyce M. Co of World of Feng Shui-Malaysia says that with 2016 being a fire year, there is inevitably a lack of water supply in the elements. Surrounding ourselves with water and its different forms will help bring balance. “In the cycle of elements, fire creates earth and earth has always been related to the real estate industry. As we enter the year, there is a lot of growth, expansion and opportunities that can be seen in this sector.”

The country’s growing demand from office rental, rising rents, construction boom and steady OFW remittances play an important part as well in driving the property sector’s growth.

Personally, I look at the property sector differently. The industry has matured. It has had record extended runs and the softening in the vertical segment is inevitable. All other segments and asset classes will continue to exhibit fairly reasonable growth.

Women Power

The absence of water does not bode well for those in positions of authority like CEOs, heads of state and heads of the family.

“Water symbolizes authority. This means, because there is an absence of water in the charts, the authority of the patriarch is weakened. What’s more, since the conflict or argument Star flies to the northwest (the corner of the patriarchs) this year, they will be disgruntled (masungit) and may have to deal with challenges to their authority.

On the other hand, things look great for the matriarch because of the auspicious stars that are in the southwest corner, which is the corner of the matriarch. Ladies will rule this year, so the men will have to be careful,” she said.

Good year for beauty industries

She says it will be a bullish year for the stock market, especially in the second half, while those in the beauty or personal development businesses will experience “great success.” Those in the metal industry, like pawnshops, will experience “fantastic” growth.

Those in the wood industries—retail, publishing, agriculture—not so much. A word of caution to suppliers…since 2016 is an election year, be sure to ask at least for down payments before you accept printing of flyers and brochures from politicians. If they lose, they may not be able to pay you anymore.

Family businesses in the year of the red fire monkey

I HAVE decided to prioritize this timely article related to the year of the red fire monkey, hoping our dear readers can use the information as a good reference point in dealing with family members and business owners in the areas of relationships and growth.

At the start of any year, everyone is filled with anticipation and bated breath, eagerly wanting to know what will happen and what trends will drive the direction of activities in the upcoming year. It’s always useful to read some forecasts from a wide range of industry pros, for the information can help validate or adjust one’s direction in his career or business.

The year 2015 has been interesting. We have seen businesses experience both success and failure but struggle at times to understand why. This article will present interesting predictions for 2016, from the perspective of feng shui experts, the Philippine government, Asian Development Bank and business consultants, both local and foreign.

Feng shui predictions

While we have officially welcomed 2016, the Chinese Zodiac ushered in the year of the fire monkey only last Feb. 8. Cheerful and energetic by nature, monkeys represent flexibility, intelligence and confidence.

The year of the fire monkey, being propitious for regular money supply, is also the right time in 2016 for families and couples to reconsider their daily relationships and break the routine.

Partnerships and new projects

According to an online article, the combination of fire with the sign of the monkey brings vitality and innovation to both business and personal relationships. If you start a new project, make sure you get associated with the right business partners, as new sparkling energies also mean heavier risks in case of failure. At work, provided you stay quick, focused and surrounded by the right people, your business might become mature enough for takeoff in 2016.

Although the monkey may bring instability because it is an animal that’s crafty and restless, open to volatility and change, it could also herald major innovation, says Hong Kong-based soothsayer Thierry Chow, as technology falls into the “fire” category.

In an article written by George Sison, consciousness guru and founder of the Temple of Prayer, Peace and Prosperity (TOPPP), he wrote that the fire monkey is particularly good in ventures that are speculative and is an expert in its evaluation of risks to be taken. The key words for this year are achievable, workable and feasible including what many may consider impossible.

Everywhere, new inventions and improvisations will arise. The year is described as “highly competitive” and has also been compared to a big bluff game similar to poker. This will be played in all sectors including politics, big business and even diplomacy – and everyone will be given a chance to join.

The key is to fix all family feuds and misunderstandings

Business will prosper in expected and unexpected ways, as a result of new and unconventional ways of doing things. On the other hand, according to feng shui expert Marites Allen, future success is likely for anything associated with the water element, as well as industries like spa, tourism, banking and shipping.

Lucky colors for this year include blue, black and grey. (No wonder Miss Universe 2016 Pia Alonzo was extra lucky in her stunning royal blue gown by designer Albert Andrada.) As things go, the year of the fire monkey is ripe with possibilities, fraught with obstructions and challenges, with people (not necessarily politicians) looking for opportunities and advantages—much like the monkey, who is known for his “scheming tactics.”  Of course, one need not be a feng shui expert to know this as the national elections is on May 9.

Change is inevitable

“Everybody will be looking out for themselves, especially financially. The elections will be largely peaceful but marred by conflict, and the next president, whoever that may be, will naturally have to deal with a lot of politicking and challenges,” Allen says.  She refuses to predict who will win the polls without a thorough look at the candidates’ charts. She did say most of the candidates were born in the year of the rooster (so expect a cockfight, figuratively, when elections come). Allen also warns against air, shipping or land disasters during the year. Traffic will continue to become a major problem.

On a positive note, those born in the years of the sheep and monkey will be financially blessed this year. “The number 8 [wealth star] flies to the southwest this year. This is the corner of the sheep and the monkey, so they will enjoy the benefits of the wealth star throughout the year. What’s more, there will be two months during the year that the number 8 doubles up. So, you might win in the lotto”, she advises, not totally in jest. Other lucky signs of the year include the rabbit (prosperity), the dragon and snake (victory luck), horse (windfall), and rooster (romance luck).