Succession in Singapore family food businesses

Ensuring a smooth transition to the next generation is not easy, particularly in the volatile business of food.  In September 2016, Singapore’s ZBBZ Magazine profiled three businesses that have so far succeeded in passing on the family legacy:  the alcohol conglomerate Hock Tong Bee and the restaurant groups National Kitchen and Da Paolo.

Now we look at three practical lessons from their experiences, and conclude with four more next week.

Be decisive and flexible

Clinton Ang, a fourth generation family member in Hock Tong Bee, practices efficiency in matters big and small.  For instance, he replies to e-mails as promptly as he can, instantly making way for other matters.

Ang prides himself on making decisions swiftly, while retaining flexibility.

Though the family business can hold its own against multinationals, Ang believes the latter’s large size may prevent them from adapting quickly to local contexts.

This is not the case with Hock Tong Bee. Although it distributes to over 25 markets around the world, it has formed alliances with local partners, increasing adaptability and reach.

Professionalize the business

Instead of relying on blood ties, Hock Tong Bee prides itself on merit and pragmatism.  Only qualified family members can lead the business.

“To have a family successor and to have a capable family successor are two different things,” Ang says.  “An incapable successor will only tank the family business.  Doing business is a 24/7 affair.

“When I come to work, I think from the perspective of an employee, and then in the shoes of the managing director, board chairman, major shareholder and family member.  A family-owned business does not necessarily have to be run by a family member.”

Tay Yiming, part of the second generation clan that owns National Kitchen, knows that many family restaurants are at the mercy of the chef.  If the cook quits, the restaurant goes under.

Tay and his elder sister Su-Lyn have set about streamlining operations across all restaurants.  Instead of chefs cooking by feel or by intuition, processes and equipment have been standardized in all kitchens, down to measuring spoons.

Even in-laws can help out in professionalization, as long as boundaries are respected.  Guillaume Pichoir, husband of Francesca Scarpa, a second generation family member in the Da Paolo Group, was at first hesitant to work for his in-laws, but his wife and her parents have encouraged him to professionalize the management of their family business.

Eschewing his in-laws’ penchant for running the restaurant by instinct or gut feel, Pichoir has systematized operations and quality control.

Prioritize the customer

Success lies in quality products and service.

Instead of relying on markdowns or other sales gimmicks, all the food business families believe in serving customers only what they would be eager to consume themselves.

For example, Hock Tong Bee will not sell whiskies with no age labels, even if these might be less pricey and thus generate more profit.

Da Paolo uses olive oil instead of chemical preservatives to flavor their dishes. Pichoir says, “We are successful only because customers like us.  This is why we have decided to put the customer utmost and foremost.  We would not have survived in the business for 27 years otherwise.”

National Kitchen takes pride in continuing the tradition of uber restaurateur Violet Oon, the mother of the Tay siblings.

“Our mum has always taken great pains when hosting at home with her meals, from the ambience to the dishes,” Tay Su-Lyn says.  “Everything is elegant and exquisite.  We wish to replicate this experience and atmosphere in our restaurants down to the ordering experience.”

(To be continued next week)

Queena N. Lee-Chua is on the Board of Directors of the Ateneo de Manila’s Family Business Development Center.  Get her book “Successful Family Businesses” at the University Press (e-mail [email protected]).  E-mail the author at [email protected].