Is it difficult for family business to inherit?The key is to think about this

The following article comes from EE of the Yangtze River Business School, the author Yangjiang EE

The reform and opening up of China in 1978 has gone through more than forty years. With the surging of the sea and the wave of entrepreneurship, a group of huge family corporate groups were born in my country.

Today, China's first group of family companies have reached the intersection of inheritance. How to scientifically govern and inherit, and how to ensure the stability of the foundation has become a subject that must be faced.

Family enterprises are very important for the economic development of any country. According to statistics, in the United States, family companies have contributed about half of GDP and contributed to employment 70%to 80%; in Europe, most companies are family companies; in some countries in Latin America and Southeast Asia The proportion is even more than 90%.

What base business does family business have a long -term green? In what aspects should we think about the spirit of entrepreneurship and career of family companies and business owners?

There is no standard answer to enterprises to maintain a hundred years, but there is a higher goal, perhaps the beacon that leads the company's efforts. On this proposition, we talked about Professor Li Haitao of the Yangtze River Business School, hoping that his research would provide a clear and practical thinking framework for Chinese family companies.

Share | Li Haitao

Source | Changjiang Business School EE

Li Haitao

Doctor of Finance at Yale University

Professor of Finance at Yangtze Business School

Outstanding Dean Lecturer Professor Professor Entrepreneurs and Scholars Project Vice Dean

01

Q: The so -called enterprise, the total number of Lin Lin is huge, which standard companies that meet the standards of the family business?

Li Haitao: A more classic perspective is to look at this problem from the past, present, and future of the enterprise.

Look at

The establishment and development of family businesses must be deeply affected by the family. Many well -known century -old stores have begun to develop the enterprise from 0 to 1 and from 1 to N. The family has made great contributions to the development of this company.

Look at the present

At present, the operation, operation and management of the enterprise also have in -depth participation of the family. Regardless of the first generation, they still participate in the daily management of the enterprise.

Look at the future

The family hopes that companies can continue to operate and inherit with the management of family members for a long time.

This is a more classic and easy -to -understand perspective of family businesses: from birth, development to the future, is related to family rest.

There are also a few more in -depth angles to further discuss:

Angle 1: equity structure.

Enterprises created and managed by the family have a large proportion of family members. Of course, in different stages of development in different countries and enterprises, the equity structure will be different. But basically, family holding companies are normal.

Taking my personal research as an example, a criterion for entering the family business of my research library is that the actual controller is the family in the family, and the ratio of equity is an important indicator.

Angle 2: Family depth participation management.

Regardless of the presence of the first generation, the family cannot be a shopkeeper. Members must participate in the daily operations of the enterprise, make strategies, and make key decisions.

Angle three: the purpose of the enterprise.

Having the dream of Changye's evergreen. Family enterprises usually go to the goal of enterprises all the time and inherit the family, and span the time.

To sum up, the simplest and most intuitive way to judge family enterprises is from the perspective of equity structure, corporate management power, and control.

02

Q: What industries do Chinese family companies mainly focus on, and why can family companies in these industries play a greater role?

Li Haitao: Taking a listed company in China as an example, after studying the largest 300 family companies (according to the market value of the stock), we found that most family companies belong to the access conditions and the industry entering the industry with relatively loose environment. Pay attention to innovation and assets, rather than from resource -oriented and regulatory industries.

Highly higher includes: electronics, consumption, the Internet, medical care, and manufacturing industries in some segments, are the main territories of family companies.

Another important research conclusion is that compared with other types of enterprises, family companies have better operating conditions, such as financial data, stock performance, brand reputation, trust and other dimensions, and their performance is better.

This conclusion is also in line with the principles of economics. As the owner and major shareholders of the family, the family is the primary concern and lifelong career. Therefore, they will be more focused, willing to invest, and have stronger motivation to do this.

03

Q: What natural advantages and limitations of family companies have?

Li Haitao: The more you study the family business, the deeper feel the family business is one of the most important engines of economic development.

At the beginning of any company, it began at one or more people. At the beginning, it benefited from the participation of the family. Even if it does not directly participate, the family's impact on the startup enterprise itself is also great. From this perspective, the family is the starting point of the enterprise; the family and enterprises are the starting point of economic development.

All great companies start from a founder. Why do you start?

这就是企业家精神，他被某个梦想推动着，有的人可能是为了脱离贫穷，改革开放初期，大家都很穷，为了提高家庭生活水平，很多人出来挣钱，做小裁缝、做小Buying and selling, car repair, and so on have slowly started from a small workshop.

When it developed to a certain stage, greater dreams appeared, and they wanted to strengthen their careers.

Therefore, family companies are the most primitive origin of the development of all countries, all regions, and all economies. All enterprises have begun, and all founders are driven by their dreams. From the perspective of family business, the biggest difference between it and other types of enterprises is that the equity and management rights of modern enterprises are separated.

For example, if you buy a listed company's stock and the stocks of Apple and Microsoft, we can become shareholders. The equity structure of such enterprises is very scattered. In other words, the company's good impact on anyone is not so great.

But for a family enterprise, enterprises are all, enterprises do well in the family's wealth, and the family will develop better; the enterprise is bad, and the negative impact will be very large.

Therefore, the family will participate in corporate management deeper, which means that the interests of "business owners" - "shareholders" - "manager" are consistent.

From this perspective, the phenomenon of contradictions between agents, the contradictions between professional managers and shareholders in modern enterprise management, etc. The probability of appearing in family companies is less, and the latter also pays more attention to the long -term development of the enterprise.

It is actually a family business that really upholds the spirit of long -termism. At least three to four generations of enterprises that are called Changyei, the time dimension is hundreds of years.

With the expectations of making a century -old store, family companies will not do without the loss of short -term interests, such as tax evasion, cutting corners, and so on. They will particularly care about the brand and reputation of the enterprise. These are the unique advantages of family companies.

However, there is an advantage that there must be disadvantages:

Disadvantage

The blood relationship is related to this layer of ties. I usually look up without seeing my head. In the process of corporate governance, there will be unprofessional and not acting in accordance with the laws of the market.

When your subordinates are also your son, you can't fire him easily. Therefore, how to resolve the internal contradictions of the family and sort out the internal relationship of the family are very important.

Disadvantage two

Even if there are more children in the family, the number of successors that can be selected is very limited.

You will inevitably face the situation where family outsiders participate in corporate management. This is very important, especially when the size of the enterprise is getting bigger and bigger.

But I found that many family companies (especially China) can do not do this well. This has something to do with the legal environment, culture and history of an enterprise.

On this issue, the biggest contradiction faced by family companies is: people who trust are not capable; those who have abilities can not be believed.

How to overcome this problem is one of the key issues to realize the long -term foundation.

04

Q: Why is it important for a family business to any country?

Li Haitao: I believe that for most people, even for many entrepreneurs, the importance of family businesses will surprise you.

Professor of business schools like me, most of the studies do only pay attention to listed companies, and there are not many people who really pay attention to family companies. In everyone's subconscious, family companies feel that family companies are small workshops, which are not big enough and important.

But in fact, global family companies have made great contributions to the development of the world economy. Family companies in some countries contribute to GDP as high as 70%~ 80%,

For example, the United States is generally considered to be a developed economy. The GDP of family companies should be small, but in fact, most of the United States SMEs are family companies, contributed about half of GDP, and contributed to employment 70%~ 80%.

In Europe, the contribution of family companies is even greater. Most of the companies in Germany, Italy, and France are family companies.

Developing countries and regions like Latin America and Southeast Asia, which account for a higher proportion, and more than 90%are family businesses.

In China, the definition of family enterprises has just begun, and the reform and opening up is only 40 years. It is not mature to precisely define the family enterprise. Nine "saying -private enterprises have contributed 50%of taxation, 60%of GDP, more than 70%of scientific and technological innovation, 80%of employment, and 90%of the number of enterprises.

But from this perspective, Chinese -style private enterprises, or family companies in the prototype period, are very important in national economic life.

This is also a natural phenomenon. Any company, or large or small, derives a founder, starting from scratch, began with personal will. Most of the great companies in human history began in the family.

Slowly, some are bigger and stronger, some have stagnated, some disappear, and they are destroyed.

05

Q: In the current turbulent and uncertain period, what should we think from the spirit of protecting the entrepreneurial and career of family business and business owners?

Li Haitao: At present, the challenge to Chinese family companies and private enterprises during this period is huge.

We are currently undergoing a few pressures at the same time, such as the impact of the epidemic, the re -impact of the epidemic, the changes in policy, global geopolitics, Sino -US confrontation, etc., but because of this, living examples tell us: Ordinary things.

Several war and plague in the past century, the huge turmoil brought about how to survive all companies at that time, it was not easy to live for 100 years.

We really realized today that we really realized why they were not rich in three generations. There were not only internal reasons, but also external reasons. Many students asked, Professor Li, what should we do?

One of the most important points here is: What is your purpose of being a company? This is the core issue.

Those century -old store companies have a common feature since they are prosperous. They have a higher goal.

If you only care about making money, you only have money in your eyes, of course, when you are in peace and place, you will definitely make money. But the goal of becoming a century -old store and becoming a great company is a challenge for completely different dimensions.

On the way to becoming a great company, you will encounter unexpected difficulties, some from the family, and the external ones:

For example, if you have money, your family has to be separated;

For example, children are unwilling to take over or have no ability to take over;

Or the technology is subverted and replaced;

Or, as soon as the policy changes, the entire industry has disappeared;

Another example is the epidemic for three years, and the cash flow cannot be carried.

Generally, it is sad to get away. How can I live?

This is not a relaxed thing. I often tell entrepreneurs, don't say that you want to be a century -old shop, because you don't understand what this sentence means.

What kind of entrepreneurs can make a century -old shop?

The first is to recognize my career. From the inside, I feel that what I do is very amazing and worthwhile to do it for life. Not only is it worthy of myself, it is also worthwhile to do it.

Rising to this high cognition is necessary. If you can't do it from this height, it is too easy to give up, because the challenge is really not small. A century -old store has this common point, and found all the calls worthy of all, from the heart.

For example, the "New York Times" family, several generations believe that the cause of the family business is a great career.

Next, you need to focus on focusing. You cannot do everything for money, and do whatever you come. The century -old store needs to focus on deep cultivation, so that the moat is deep and wide, ensuring that the century -old moat does not fall, relying on focusing on focusing.

In addition, to contribute to society.

One of my theories is that when the family is great, the resource accumulation is more and more, and the centrifugal power is huge. This law is inevitable.

How to unite people's hearts? How to make the family not only care about money, how to build a unified and higher dream?

With this dream that exceeds money, everything is easy to talk. When there is no dream, there is only money left, and the money is to be divided.

On the focus, an example is Chenguang Stationery, a very good company (Chen Huxiong is an alumni in the Yangtze River). He resolutely only focuses on making stationery. When the morning light has been doing stationery for decades, how can a competitors just fight for the market for two years?

Regardless of the turmoil and changes in the outside, the rules of the company's survival are unchanged: their own gong, technical cattle, no one can easily subvert. When the family is united and dreams, no one can subvert. These are controllable factors that are constant. Let it be winding and rainy.

Excellent family businesses, without exception, do well, control the risks of uncontrollable hedging, do not blindly add leverage, do not expand at will, rather slowly and stable. When you want to live for 100 years, you will be slower.

The question to question and answer is to live for 100 years, or do you have to make 10 years of money? If you want to live for 100 years, you must have a long -term vision. If you can do it, you can achieve great enterprises.

The picture in the article comes from Tuwu's creativity, and the reprint needs to be authorized.

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