Tag Archives: Values

Lee Kum Kee: 129 years and Growing

Lee Kum Kee International is a Hong Kong-based food company that manufactures oyster flavored sauce and a wide range of Chinese and Asian sauces. It is a popular fixture in most Asian dining tables. It is also loved by Filipinos.

The brand was founded in 1888 by Lee Kum Sheung, a chef working in a small eatery that sold cooked oysters. He eventually formed the Lee Kum Kee company to market what has now become a staple sauce, seasoning and condiment sold in more than 100 countries.

Today, the Lee Kum Kee (LKK) group continues to run as a family business under the leadership of the 5th Generation family members. I shared this inspiring family business in my workshop last Saturday.

At the center of LKK’s corporate culture and existence is a Mandarin saying:

“Si Li Ji Ren” which means “Considering Other’s Interests or Put Other’s First, before yourself.”

Si Li Ji Ren is the heart and soul of the Lee Kum Kee’s very existence and the foundation of their commitment to ingrained values such as Pragmatism, Integrity, Constant Entrepreneurship, and Benefiting the community.

Today, family enterprises that are haunted by a multitude of daunting challenges related to succession battles and sibling rivalries may do well by learning powerful insights from LKK’s success formula as well as its preference over family embracing the business.

I espouse business first in my coaching work to dramatize the need to grow the business in a highly complex and competitive environment but the case of the LKK family business’ endless pursuit in espousing best practices under a family first model is equally inspiring.

Quoting a well written article by Jeff Pao… “Family first before business,” company chairman Charlie Lee Wai-chungonce said in an interview. “If family members work together, the business will thrive naturally.”

“As a family business, we’ve gone through several transitions within our family. And the two key transitions in the 1970s and 1980s have exerted huge shock on our family governance,” he said.

In 2002 the family decided to set up a family council as part of their efforts to bolster business growth.

Lee Wai-chung, the fourth-generation heir, said involving all family members in the business may not necessarily be a good thing.

“It’s a common belief that you are a part of the family unless you join the family business, or you become an outsider. But that idea is outdated and has to be changed,” he said.

A traditional family embraces harmony and tries to avoid infighting. So even if there are issues, they tend not to confront them for fear of causing disharmony in the family.

But those issues have to be tackled, Lee said, adding that it’s normal for family members to have different views.

In Family businesses that my advisory firm, W+B assists, the family leaders have the habit of sweeping the problem under the rug and totally ignoring the underlying problems. It should not be that way.

My model of coaching work is simple… when there is conflict make the family members internalize the values. Values are like glue that keeps the family together.

Values inspire people to do things that are sometimes difficult, to make commitments that require discipline and to follow certain behaviors that will redound to the benefit of the greater good. An enduring commitment to values is the greatest strength and competitive advantage family ownership can bring to any enterprise.

The Lee Kum Kee model is a glowing example of what family businesses should be.

(esoriano@wongadvisory.com)

Cousins: United we stand, divided we have nothing

MADRID–I started writing this article when I was on the plane en route to Dubai last Thursday to grace an international event related to my other vocation as a book author.

After a brief three nights in UAE, I flew back to Manila Sunday midnight and flew to Spain the following day to attend the board meeting of Gruppo Emperador in Madrid.

I sit as independent director of the listed liquor firm.

As most of my readers are probably aware, Emperador acquired Spain’s largest and oldest iconic brand Fundador Pedro Domecq in an “all-cash” deal worth 275 million euros around the same time in November last year, thus it was appropriate for the board to meet in Madrid to plan its global business initiatives for 2017. The Fundador Group is a family owned business that dates back more than three centuries ago.

Sharjah International Book Fair 2016 in UAE

The prestigious fair is the third biggest book fair in the world and is expected to generate more than 1.5 million visitors during its 10-day run, slated to end on Nov. 12.

I was privileged to be one of only 150 book authors handpicked from all over the world to present my two books on family business governance and succession and be a resource speaker, sitting alongside some of New York Times’ international best-selling authors/novelists like Eric Van Lustbader of the thrilling Bourne Identity fame.

It was both an honor and a unique experience as Wong + Bernstein’s continuing efforts in advocating best practices in family-owned enterprises are now beginning to bear fruit. Countries are now slowly realizing the significant contribution of family enterprises to their respective economies.

A family branch in a dilemma

I want to share a common dilemma involving a family business enterprise engaged in logistics and trading. This is a third generation business that I have been actively helping for the last two years. During my monthly sessions with the members of this branch, I would always hear the family patriarch assert, “Our family started the importation of our products, so we sure have to be the ones to decide on whether or not our company should expand on it”.

That statement appears harmless but in reality, it is a red flag and a future source of conflict amongst different branches with common ownership.

The entitlement of the branch laying claim to the business assigned to them during the startup stage can pose serious consequences if rules are not cascaded to the cousins, both active and non-active.

On my end, I took the opportunity of explaining to that branch that the enterprise is still commonly owned by different branches. I also reinforced the notion that corporate governance and stewardship should be the overarching principle that should pervade in the enterprise.

Making the branch patriarch understand his role in the whole organization diffused the tension that was quietly building up.

In retrospect, regardless of the business context, when the concept of the family would be inserted into the argument, divisiveness would start to emerge. This is why the support from non-family business experts would be highly recommended (see my last two articles).

The neutral advice of these professionals coming from their many years of corporate and senior level experience implementing best practices could provide the cousin consortium stage with the needed guidance to set aside their biases and become proactive.

Guideposts are wonderful pillars to start governance

A good starting point for family members would be to collectively ask themselves the following questions:

Vision:

What goals do we want to set for the next three/five/10 years for their shared assets?

Mission:

Who are we as a family?

Why do we have to be in business together? And own shares together?

What does the business want to accomplish?

What do we want the enterprise to offer to its stakeholders?

Values:

What are the philosophies that define how the business should act in the ownership and management of the business?

When these most basic and purposive issues plus a myriad of other daunting and emotionally charged issues like control, leadership, entitlement, sustainability and stewardship are addressed, then the likelihood of a conflict will be minimized.

On the other hand, ignoring the red flags can eventually result in a conflagration. As a family member reading this article, the choice to do something is really yours.

Watching out for the 3C’s

BOSTON — What do large family-inspired business conglomerates like the SM Group, Unilab, Jollibee, Ayala Corp., JG Summit andAboitiz Group have in common?

Every year, around the third quarter, the business unit heads of these companies are busy finalizing pre-strategic work plans for 2017.

Multinational corporations (MNC’s) are also abuzz with dedicated calendars all pointing to their much awaited strategic planning calendar.

ASEAN business advisors like us consider August to November as our busiest and most punishing four months facilitating strategic sessions in the region. August and September alone will take me to five countries! Work is more fun than fun.

Strategic plan as your compass

Most business owners or managers recognize that a strategic plan is a directional map for where their companies are headed and how they intend to get there. However, it is much harder for them to understand what goes into the strategic planning process. Why? Family business leaders belong to a transactional culture, meaning a very selling-oriented environment where the only discipline they know is sales and more sales year-in and year-out. To them, strategic planning sessions are a waste of time and will not result in any concrete and visible result in the immediate term.

Businesses must watch out for the 3Cs and the Real C

When doing Strategic pre-work planning, you must always focus on the three main C’s–competition, competitive advantage (company) and customers. But due to the volatility of the market, I deem it imperative to incorporate another C: complexity. The borderless competition and the complexities of the market have made strategic planning very crucial.

The latter is best done when a company looks at its past, present, and future in light of its changing environment. It is the process of thinking about the company and its related environment as an integrated whole. A process during which an executive “planning team” is organized to consider three key questions on a continuous basis:

What is our business?

Where do we want to go, and when?

How do we get from here to there?

Strategy is a continuation of a long-term plan of action designed to accomplish a desired set of goals. Your strategy relates to why and how your plan will work, relative to all the influences upon your company and its activities (in particular, its customers and competitors). I have seen throughout many consulting engagements that something has been missing.

Managing a family business is tough

A successful business is often the best thing that can happen to a family – and the worst.

“Keeping a family business alive is perhaps the toughest management job on Earth,” says John Ward. But without a clear management strategy, things could get even more awry for everyone – from the family patriarch who heads the business down to its members and staff.

It all starts with a vision you have for your company. Is that vision still relevant? Is it being accurately and concisely communicated throughout the company? If not, the outcome can be far from what you envisioned.

Vision Mission Values (VMV)

Jack Welch of General Electric fame accurately points to VMV as a powerful starting point and he says, “Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion.”

While reading this article, why don’t make a review :

1. Vision – Is the original vision still appropriate in terms of market trends, opportunities and threats?

2. Re-energizing – What is the best management structure for the future, especially in terms of outside advisers and non-family managers?

3. Values – Do the values, skills and ambitions of the next generation in the family match their wishes, abilities and views?

4. Continuity – What is the company ethos, family involvement and how are decisions delegated?

5. Governance – What strategies can be adopted by which the family can resolve conflict?

6. Resources – What actions, support and resources are required to maintain the business into the future?

For instance, if you plan to expand to another territory or introduce a new product or upon the prodding of your son (working in the family business) launch a social media marketing campaign to appeal to a broader, younger, Internet-savvy audience, did you initiate some form of survey for your marketing team whether they are familiar with social media?

How about your sales team? Do they have the experience in generating online leads? And most importantly, does your product make sense for this new audience?

To be continued…