The key for the long-term survival of Chinese family businesses is to respect and appreciate the role of professional management by outsiders. That is the advice for longevity from the head of 121-year-old Chinese-medicine maker Eu Yan Sang International Holdings. 'The most important thing is you have to separate the ownership and the management,' said Richard Eu Yee-ming, managing director of the company formed in 1879 by Eu Kong, his flamboyant tin-miner tycoon great-grandfather. 'You have got to decide whether you want to grow the business or you just want a rice bowl for the family,' Mr Eu said. 'If you want to grow the business, you have got to look for professional management.' He is not in favour of a family-controlled business being run by people with family ties. His views mirrored a report issued yesterday by the Economist Intelligence Unit in co-operation with management consultancy Andersen Consulting. It said the traditional rigid hierarchies and emphasis on personal relationships of Chinese family businesses were ill-equipped to deal with an environment of accelerating competition and increasing complexity in post-crisis Asia. Eu Yan Sang has long been a small-size business of the Eu family, selling flagship Bak Foong pills for women and its Chinese herbs. It is one of the few traditional Chinese businesses to last four generations. It was operated in a traditional way until Richard Eu took over 10 years ago and started a process of modernisation. 'At that time, I think the business was not realising its full potential,' Mr Eu said. 'If we did not do something at that time the business would probably have eventually conked out.' He brought about a major change in the organisational structure, which resulted in retirement for old people and hiring professional-trained newcomers as managers. The company also introduced extensive staff training on product management, sales and marketing services to improve its standards - something Mr Eu believed was essential to enhance its competitiveness. Richard Eu and his executive director cousin, Clifford Eu Yee-fong, are the only two Eu family members involved in the company's management. The rest of the staff at managerial level are professional employees. 'If you do want the right person to stay, you have to give them a career path. You cannot give them career path if you do not grow the business,' Mr Eu said. Mr Eu said his vision was to transform the company into a major regional and global player in the traditional Chinese-medicine business. It seems he has succeeded, transforming the firm into a modern health-care products provider with a wider range of clients than the middle-aged women who were its staple for nearly 100 years. Sales have risen from about S$500,000 (about HK$2.27 million) to an estimated S$70 million plus this year.