It is unfortunate that a man as successful as casino mogul Stanley Ho Hung-sun should have to spend the last years of his life fighting his own offspring over how his business empire should be divided. Or that octogenarian matriarch Kwong Siu-hing should have had to step up to become chairwoman of Sun Hung Kai Properties, founded by her late husband, Kwok Tak-seng, and one of the world's largest real estate developers, because of a long-running spat involving their three adult sons.
The Ho and Kwok families, whose respective feuds appear to have been resolved, have three things in common. First, they are among Asia's most successful business owners. Second, the families struggled with chronic conflict despite a successful business performance because they failed to plan ahead for a successful transfer of ownership and leadership to the next generation. Third, the families have, in the past, followed the potentially catastrophic 'majority-of-one' leadership model.
The majority-of-one leadership model is an all-too frequent barrier to Asian business families learning to work and plan their future together. Although found throughout the world, it is particularly prevalent among Asian cultures and practised by many successful entrepreneurs. It is not all bad. Singularity of leadership works well in the start-up and growth phases but leads to problems when a founder-entrepreneur is unwilling to move to a shared leadership model with adult children built on planning and governance processes, which can damage both the business and the family.
On the business side, it is well researched that people make a strong personal commitment to a future strategy when they participate fully in the planning and decision-making. Personal involvement is also useful to develop an understanding of the business' culture and demands - as well as learning how to communicate with other family members about the business. It is much easier for members of the next generation to learn to work together with the guidance and support of their family than to struggle to develop the skills on their own.
On the family side, the emotional injuries can have even more serious long-term effects. An adult son or daughter who is not allowed to participate in the planning and decision-making for the family business can perceive their parent's reluctance to include them as a lack of trust. This, in turn, can lead to feelings of unworthiness and powerlessness. Such negative emotions are often expressed by a loss of commitment or even disloyalty to the family or business. Family members who are excluded may act out their insecurity and frustrations through family rivalry and even confrontational behaviour against their parent.
While the principles and benefits of strategy for businesses are well recognised, the idea of planning for the business-owning family is less well understood. The traditional family firm may have had a sound business strategy, but planning for succession was mostly neglected, or triggered by specific events such as the founder's retirement or death. However, many business-owning families today are beginning to recognise that meetings to plan the family's future ownership and leadership really do work. Such meetings allow family members to communicate about their values, vision, strategies, investment and governance - and these discussions build a shared understanding of the situation and an agenda for thinking about the future.
Families that discuss their shared future find that, while there may be disagreements or even conflicts, it is much more effective than ignoring the issues until they become a serious threat to sustaining the family's participation and ownership. It is unlikely that the larger family will all share the same dedication to the business as the founder, but working together as a family can actually help strengthen the commitment of the next generation. It is predictable, but often surprising to the second or third generations that they should face a new set of family challenges such as how to share ownership among a growing number of family members; how to decide who will lead the business; and what the rights and responsibilities of family owners are.