How Can Family Businesses Sustain Growth Over Three Generations?

The event opened by Mr. Teddy Saputra, a third-generation business owner, alongside Mr. Denny, a second-generation business owner. In the opening session, Mr. Teddy and Mr. Denny discussed the strengths and weaknesses of the second and third generations in family businesses. The session featured a presentation by Prof. Goto Toshio from Japan, titled How Can Family Businesses Sustain Long-Term Growth Across Three Generations?

The primary objective of family businesses in Japan is not expansion but sustainable growth across generations, focusing more on contributing to society rather than pursuing personal profit. The "success gene" in long-lasting companies is reflected in the collaboration of family members who can restrain selfish desires and show care for others. Additionally, in Japan, the family’s reputation plays a vital role in running a family business.

Key factors for ensuring the continuity of family businesses include:

• Long-term corporate management,
• Controlled business growth,
• Focus,
• Trust-based relationships among family members,
• Risk management, and
• Commitment across generations.

Japan also upholds several business ethics, expressed through principles such as:

• Fairness before profit,
• Secret gifts being openly appreciated,
• Those who accumulate goodwill will be blessed,
• Treating everyone equally, and
• Viewing corporations as public social entities.

The presentation concluded with the insight that family businesses will ultimately transform into non-family businesses. In Japan, family business culture incorporates values from religious or spiritual beliefs as a foundation for resilience and harmony in running a family business.

Mr. Teddy emphasized that having too many decision-makers in a business can create conflict. He stressed the importance of shared values to align perspectives in business. Without shared perspectives, the company might seek more suitable candidates, leading to the transformation of a family business into a non-family business. During the Q&A session, Mr. Teddy shared that his family business has gradually diminished, particularly after the founder’s passing. Mr. Denny, representing the second generation, raised a thought-provoking question about whether maintaining the identity of a family business is necessarily wrong, given the natural evolution of family businesses into non-family businesses. If the family decides to take the business public (IPO), it becomes essential to retain the family's influence to uphold the company through family culture and traditions, which serve as the unique identity of a family business. If ownership cannot be preserved, integrating family influence into the management of the family business is crucial.