Family businesses often encounter tension when a new generation comes on board and brings with them new ideas and ways of doing things. While continuity is important, change is also unavoidable with the passage of time. JOY LEE reports.

I have eaten more salt than you have eaten rice — that’s a common saying among the Chinese, implying that the older generation always knows better. But it’s a mindset that’s not always helpful for a family business that’s undergoing transition.

According to PKT Logistics Group CEO Datuk Michael Tio, as important as it may be for the new generation to try their best to adapt and carry on the business, it is likewise just as important that the first generation accepts that the younger ones will bring about change.

“Parents spend money to educate their children. You expect them to come back with changes. So you must let them take the risk to change things,” he reasons.

Tio admits that keeping a balance between being a successful entrepreneur and a good son is no easy task.

In a traditional family structure, parents take on a more authoritative role, while children are expected to obey. However, Tio notes that the first generation should learn to treat the younger ones like the board of directors in a business where they are equals.

“In a business, the rules are a little different. If the second generation is only taught to follow rules, then what you need is really just employees, not a second generation who will succeed the business.

“You must accept the fact that you want them to be better than you. And you must accept the fact that they are going to change the family business.

“Take the initiative to guide and not demotivate them,” advises Tio.

The old guard can help make the transition between the two generations smoother by allowing their children to explore new ideas and to innovate and improve the business.

While the first generation may have had years of experience building the business up from scratch, Tio cautions them against turning down suggestions from the second generation one too many times.

“Young people like to talk about ideas. And these ideas are not tested. But it doesn’t mean they are not good ideas. Give them the opportunity to test out their ideas.

“And sometimes, your kids get excited over a new idea and are eager to share that idea with you before doing their research. Instead of saying no, ask why, when, how much? At least they know what to prepare and how to justify their ideas,” Tio suggests, adding that this would help to avoid conflict between the two generations.

“If you keep turning their ideas down, they will lose the motivation to work, and they won’t get to use their talent and knowledge to improve the business,” says Tio.

Parents should, however, keep a close eye on the progress of these ideas. If anything, the risk involved in carrying out these new initiatives must be calculated.

Tio urges the first generation to share their knowledge and experience with the younger generation and, at the same time, to be receptive towards what the young ones have to offer. After all, both generations have exposure in different areas and ways of doing things.

And if both sides can work together, then there is a better chance for the family business to not only survive into the next generation but also to evolve with the times into a better company, Tio concludes.