Defying the third gen­er­a­tion curse: The Ja­panese way

Sun Star Bacolod - - Business -

IT IS the mid­dle of 2019 and I am writ­ing this ar­ti­cle while on a plane en route to Toronto from Is­tan­bul.

Time re­ally flies and ev­ery opportunit­y to unite fam­i­lies from long stand­ing con­flict is sig­nif­i­cant, as it pro­vides a chance for hope, harmony and most im­por­tantly, for­give­ness for fam­ily mem­bers that are mired in con­flict.

In my years coach­ing fam­ily busi­nesses in Asia and North Amer­ica, the ac­ri­mo­nious and un­nec­es­sary part­ing be­tween par­ents and sib­lings, sib­lings against sib­lings, in- laws against fam­ily mem­bers, and cousins against cousins has made the task of rec­on­cil­i­a­tion more dif­fi­cult than ever. With so much emo­tion con­sumed by all sides, no­body re­ally wins.

His­tor­i­cally, the av­er­age life­span of cor­po­ra­tions has been be­tween 40 and 50 years—a fig­ure that has grad­u­ally been on the de­cline due to a chal­leng­ing mar­ket­ing en­vi­ron­ment. How­ever, for fam­ily-owned busi­nesses, it is a to­tally dif­fer­ent story. Pre­dictably, it al­most al­ways ends in tragedy when the founder or busi­ness leader dies with­out ar­tic­u­lat­ing his or her lead­er­ship and own­er­ship plan to the next gen­er­a­tion.

In Europe, it is even more alarm­ing.

A study that an­a­lyzed thou­sands of Euro­pean firms yielded a cor­po­rate life ex­pectancy fig­ure of a mere 12.5 years. Com­pa­nies are dy­ing younger and fam­ily en­ter­prises with­out any form of gov­er­nance in their veins are most vul­ner­a­ble and are prone to col­lapse at any given time.

Defying the odds: The Ja­panese way

Why is Ja­pan home to so many en­dur­ing fam­i­ly­owned busi­nesses? Based on re­search, there are 5,000 com­pa­nies in the world that are more than 200 years old, and, out of this fig­ure, more than 3,000 are in Ja­pan.

That’s more than 50 per­cent of the world’s old­est fam­ily-owned busi­nesses con­cen­trated in one coun­try. The next clos­est coun­try com­peti­tor is Ger­many, but it houses a mere 19 per­cent of the world’s old­est busi­nesses, most of which are brew­eries. Af­ter that, no other coun­try boasts more than five per­cent, and these are Euro­pean coun­tries heav­ily in­volved in pro­duc­ing wine.

So why is Ja­pan dif­fer­ent? Why do some of these fam­ily-owned com­pa­nies go

on for cen­turies while the rest of Asia die early? What is their se­cret to a long cor­po­rate life? Does cul­ture play a huge in­flu­ence?

The Bank of Korea un­der­took a study years ago re­lated to the coun­try’s en­dur­ing gen­er­a­tional suc­cess. The pri­mary ob­jec­tive of that study was for Korean fam­ily-owned busi­nesses to learn valu­able lessons from their next door neigh­bor, as Korea has only three fam­ily-owned busi­nesses older than 100 years. Even South Korea’s so-called chae­bol (chae means wealth and bol means clan), a large in­dus­trial fam­ily-owned busi­ness con­glom­er­ate that is run and con­trolled by an owner, are not spared from many scan­dalous suc­ces­sion and own­er­ship is­sues through­out their ex­is­tence, and there has been a long-sim­mer­ing pub­lic anger against next gen­er­a­tion suc­ces­sors that have taken over the busi­nesses. They are per­ceived to be ar­ro­gant and en­ti­tled, a far cry from the widely re­spected older gen­er­a­tion.

When these vi­sion­ar­ies ne­glect fam­ily gov­er­nance, the process in hand­ing power to the next gen­er­a­tion can al­ways pro­duce lots of drama and con­flict. There­fore, is the Ja­panese longevity model all about their val­ues, ideas and re­li­gious be­liefs that have de­vel­oped over the course of its his­tory? What can their unique ap­proach teach us about longevity?

To be con­tin­ued...

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