Ya Kun grows

When Adrin Loi, 62, of Ya Kun Kaya International, succeeded in running the café at Far East Square, Singapore in 1998, he opened a second branch at Tanjong Pagar, and wondered how to make the company grow.

“Unlike owners of most family-run businesses who tend not to plan beyond a year or two, especially small- and medium-sized enterprises … Loi set his sights on growing his father’s business beyond just one outlet the moment he took over the running of the business,” says professor William Koh in his book The Top Toast.

“This is reflected by Ya Kun’s vision, which is ‘to establish Ya Kun as a household name in Singapore and Asia…’ That set the tone for adopting a strategic approach in the management of Ya Kun … a crucial component of Ya Kun’s operations today.”

Upper management meets yearly to plan for the short- and long-term, discussing targets and outlets, staff performance and innovation.

In 1998, instead of selling the business to third parties, Loi decided to buy out one partner; and when his brother Algie reduced his share in the enterprise, Loi applied for a government grant to study franchise opportunities—the ideal solution.

Because of the patriarch Ah Koon’s sterling reputation, Ya Kun Kaya received hundreds of franchise applications. In 2001, John Ong became a partner in the company, becoming managing director.

The company grew steadily, and now has more than 50 stores in Singapore and almost the same number in several countries, including four in the Philippines: at the Ninoy Aquino International Airport, Mall of Asia, Robinsons Manila and SM Jazz.

Siblings

Siblings quarrel a lot in many family-run businesses. But in the Loi family, everyone supports their successful youngest brother.

“We are Christians,” says Loi. “Our parents raised us to take care of everyone.”

Aren’t his siblings jealous?

“No. They are behind me all the way. The business is named after our father, not me. I am merely the one carrying on his legacy, which all of us share. Sometimes when we meet, we tell each other, ‘Maybe dad would rise from the grave. Would he ever have imagined all this?’ We know he would be so happy.”

Professionalization

Some family members are involved in some way in the business, but most of the employees are non-family professionals.

Since both family and non-family members are involved in management, synergy is harnessed.

“Hired professional managers ensure continued strategic growth in the business,” says Koh, while the presence of family members “ensures that the company stays true to the Ya Kun brand and its heritage and not be tempted to be overly ambitious in expansion strategies and risk brand dilution.”

The common values and religious beliefs of Loi and his professional partner—managing director Ong—also ensure stable and fruitful collaboration.

Ya Kun has never fired any employee.

“We treat employees professionally, we pay them market rates,” says Loi. “But we also treat them like family. For example, if an employee suddenly has a sick parent who needs to be brought to the hospital, we allow him to do so without having to file a sick leave. For certain employees, such as our marketing people, we allow them to work at home for some days, doing telemarketing. But we make sure there are no abuses.”

The company ensures employees are compensated well for good performance, despite the external environment. Koh gives this example: “[The year] 2009 was particularly hard for many organizations regardless of industry and size, and while many companies are trying to control labor costs and even retrenching employees, Ya Kun managed to pay its employees bonuses that year.” (To be continued)