More on Eu Yan Sang
A reader writes: I love your story on Eu Yan Sang (May 8 and 15, 2015). The quarrels among the grandchildren, the failure of the business and the company’s miraculous rise led by a great great-grandson were made for the movies.
My sister and I are fresh out of college, but my parents want us to take over the family business one day. Luckily, she and I are very close, and when she read about Eu Yan Sang, she agreed that we should not fight over the business in the future.
I spend a lot of time reading magazines like Fortune. I am familiar with the stories of Warren Buffett (whom you featured before), Bill Gates, Steve Jobs.
I am ashamed to say that I never came across Eu Yan Sang until your column, and now Richard Eu, the savior of the company, is on my “Most Admired” list. What he did in saving and growing the company should be taught in business schools not only in Singapore, but also in the Philippines and the West.
After reading your article, I “googled” Richard Eu but he seemed to be a private person. I am interested in his business strategies. Does he have tips for family businesses? Please continue writing about successful people who are not as famous but who deserve to be. How about the Wang family in Taiwan plastics?
My reply: I agree that the Eu family saga is tailor-fit for the movies, and who knows? Bill Gates and Steve Jobs have both been the subjects of films, and with the steady growth of Eu Yan Sang, perhaps their story would make it to the silver screen (or at least, on cable) one day.
It is good to know that after reading their story, you and your sister have resolved not to fight over the family business when you take over. This does not mean that you won’t have any fights or even arguments at all (that would be impossible), but it should signify that unlike the third-generation Eus, both of you would strive to put family interests, if necessary, above personal ones.
Thank you for supporting my work. I wrote about Warren Buffett because I was impressed with his parenting philosophy (“World’s Fourth Richest Does Not Spoil Children,” May 14, 2014). Unlike most wealthy founders, he is leaving the bulk of his massive fortune not to his kids, but to the Bill and Melinda Gates Foundation to improve global education and health.
Richard Eu
I prefer to write about people who, as you put it, are “not as famous but who deserve to be,” like Richard Eu. You should not feel embarrassed that you have not come across him, but the Eu Yan Sang saga is well-known in business circles and business schools in Malaysia, Singapore, Hong Kong, in the United States and Europe (Insead has done a case study on Eu Yan Sang).
I am not sure about Philippine business schools—a lot of their case studies focus either on American or (thankfully) Filipino businesses. You may be right about the dearth of successful Asian businesses. This means that I will continually feature them, in order to highlight best practices not just of the West, but also of the East.
As for Richard Eu’s strategies, he did divulge some of them to the National University of Singapore Business School in March 2014.
Having been a victim of family conflicts and corporate raids, Richard Eu feels that family members have to present a united front to the board (which has outsiders). “As major shareholders of the business, family members must align themselves before going to the board, which prevents family disagreements that can take them off course.”
A visionary, Richard thinks long-term. Many family businesses struggle with planning for the next three years, or even for the next year, but Richard has taken concrete steps to ensure that the company continues to thrive 20 years from now. When a major decision crops up (such as whether to acquire another company), he visualizes not just short-term profits but also long-term needs.
“This long-term perspective helps to avoid the boom-splat cycles of growth that beleaguer many non-family owned corporations.”
For a company to grow, its core values and businesses must remain constant, but it also needs to adapt to local conditions. Patience and humility are important, especially for the leader who wants his business to succeed. “You must start from a position of humility, but at the same time, you must be very confident in your own abilities.”
You will be delighted to know that next week, upon your suggestion, I will feature Formosa Plastics’ Y. C. Wang and his family. Theirs is also an interesting family saga, with grandson Walter Wang now at the helm.
Queena N. Lee-Chua is on the board of directors of Ateneo de Manila University’s Family Business Development Center. Get her book “Successful Family Businesses” at the University Press (email [email protected].) E-mail the author at [email protected].
