The following story is based on an actual series of events, with some names and circumstances fictionalised. Any similarity to any person’s name, character, or history is entirely coincidental and unintentional. It is to manage a business, let alone a family business.
Running a good business is one thing, but having a thriving family business is totally different. Steven was a very successful entrepreneur in the packaging business. He has a wife, Mary, and two sons, John and Wilson, who used to be close to each other. The packaging business has grown large and was listed five years ago.
By then, Steven was 59 and had intended to hand the throne to his two sons when he was 65. Both of them were bright sparks who had graduated with honours.
Going Into The Family Business
However, John, the older boy by one year, was not interested in getting involved in his father’s business and preferred to pursue a career as a professional accountant. He started his accounting practise and got married shortly after to a woman his father disliked. He considered her a conniving woman with shallow thinking.
Conversely, Wilson was happy to get into the business and became in charge of sales and marketing. The father hoped that John would eventually get into his business as the financial man, which would have been ideal for him—two trusted lieutenants, one overseeing the frontline and the other running the operations.
Try as he might, he could not persuade John, who would not budge. Over the years, Steven had passed on a fifth of his shareholding in the holding company to each of his two sons.
He was sad to note, though, that John had, in recent years, been picking quarrels with Wilson at family gatherings until both of the sons were no longer on speaking terms.
Read: Fall of Family Business Empire, Why Family Business Fail?
One day, Steven called me to meet him about his succession plan for the business in case he passed away. Over a private dinner, he confided in me that he was, while at the pinnacle of his business venture, very unhappy about his two sons’ relationship with each other.
He was very concerned that their distribution could end in business breakup and means the end for their family business. I told him I would talk to both of them as it may be difficult for them to open up to their old man.
After talking to John and Wilson separately, it became clear that Wilson had no problems with John, whom he still respected and looked up to as his taiko, but John had doubts about Wilson. It turned out that John didn’t like Wilson because his wife, who was always suspicious of her brother-in-law, made him feel that way.
Raising questions like why Wilson was ‘abusing’ the company’s resources by frequently using its high-end cars, buying expensive corporate gifts, and enjoying lavish entertainment at fancy restaurants and nightclubs.
At my next meeting, I told Steven about the underlying cause and suggested that he bring John on the board of the holding company of the listed company. I also asked him to call for monthly meetings where he and Wilson could brief the family on business developments, financial performance and issues confronting the business. He bright-eyedly accepted the idea.
Two years later, I bumped into Steven, and he thanked me profusely for helping his family business. He told me that over this period, John became familiar with the father’s business strategies and understood why his brother did what he did.
The packaging business was highly dependent on several large Japanese clients whose head office visitors expected to be entertained extensively and in a rather plush manner. Over time, John began to take an interest in the business, and the father felt that John would be ready to take over as the number one by the time he retired.
It is good that this case had a happy ending simply because of transparency and getting buy-in from the outsider son to help the family business.
Read: Hard Facts About The Executor Of A Will In Malaysia
About Rockwills International Group
Rockwills International Group, now in its 28th year, pioneered professional will writing in 1995 and has since evolved into the leading estate planning specialist in the country. It is today the largest provider of solutions and support services in the areas of trusts, succession, management and distribution of wealth. It has shareholders’ funds exceeding RM50 million. It has done over 280,000 wills and 15,000 trusts and hold more than RM25 billion in assets under trust.