You're listening to Roundtable with myself, He Young.
I'm joined by Steve Hatherly and Yushan in the studio.
Coming up, curious about social shifts, tech twists, or the mysteries of life?
Let us talk about it. Email us at roundtablepodcast at qq.com.
Emails are fine, but voice memos get extra love.
And as China's family businesses prepare for a new generation to take the helm, successors face a sobering reality.
Companies grow, stall or fall. With a shifting business climate, complex political relations and economic uncertainty ahead, the pressure is on.
Are they ready to steer through it all? Our podcast listeners can find us at Roundtable China on Apple Podcasts.
Spotify, and the podcast of your choice.
Now let's have a moment of heart to heart.
You ask, we answer. Roundtable, heart to heart.
Our listener Min has a question for Roundtable.
Hello, everyone. I'm Min from Dalian. I'm a teacher at the university.
My major is civil engineering. Now I'm in the United States as a visiting scholar for one year.
Over the past two months, I just did some research.
I contacted a few people and I felt my heart was peaceful.
However, I needed to provide some feels about my department.
So I checked some information about my colleagues.
I noticed that they all have more results in terms of papers and awards.
I immediately felt pressure from my colleagues.
So did you have this kind of pressure from your colleagues and how did you deal with it?
Thank you. thank you so much men and i really appreciate you sharing that story um yushan what do you have to say in response you know after hearing this clip here's what i learned about you men first is that you're a very humble person who remains a keen observation of the good qualities and the accomplishments in the people around you and also second you realize your own say room of improvement in order to want to become or rather adapt to be part of to be a better part of this group and of course for each and every individual we always find you know people that's shinier than ourselves or that we think they are and at least right now I'm sitting in the studio with three more professional in this line of work hosts and editors that I have a whole lot to learn from at this very moment when I'm speaking to you.
So yeah, I definitely resonate with you on that notion.
But as for tips, I think first of all, you mentioned that you are new to the environment.
So I would say take your time because as you gradually adapt to it, as you get to know more of your peers, and learn about them and interact with them, there's probably less of a gap than you originally imagined.
And also, you've got a reason to be there.
I believe that you're in that team for a very good reason.
So just be yourself. Maybe the others, they see you in the same way how you're feeling about them.
Maybe they saw your research outcomes and think, wow, she's so cool.
She's covered areas that I've never touched upon before.
So yeah, just keep up the good work and be yourself.
Min, thank you for asking because it's not often that scholars ask me anything.
So I'll give you what I can offer on this.
I used to teach at a university too, Min, back in Korea.
And this was around 2008. And I've been in broadcasting since 2002, but 2002 to 2008 was kind of part-time that I was doing it.
And in 2008... I worked at a university and all of my coworkers were really, really good professors.
They were really into it. Not only the performance aspect of the teaching, which is what I loved being in front of the audience, being in front of the crowd, the students and performing.
I loved that aspect of the teaching. What I hated was the administrative side of the job, right?
The behind the scenes stuff, the grading of like 300 midterm exams.
Oh my gosh. Now use AI. But I noticed, yeah, not just for pig farming, but I noticed that they loved that part of it too.
They loved all of it. And I realized at that time, maybe I'm not cut out for this in its entirety, right?
So I quit. Now, man, I'm not suggesting that's what you do.
No. But for me, I decided at that time to pursue my career in broadcasting full time.
And I don't know, Min, if you've got that penchant for radio shows or podcasts, I wouldn't recommend since you're a scholar.
But I think my point is being around people who are really great at what they do can inspire you to take your next step.
Now, my next step was away from education, but your next step will be in education, I assume.
Don't be pressured by them. Take some inspiration from them.
What about you, He Yang? Well, what I'm going to say next might make me sound a little hubris, but that's not me.
I don't think I have felt such intense pressure from comparing with colleagues.
I know there are plenty of people who are better than what I do, but I think I do pretty well.
And I think that mentality was prepared thanks to my previous experience.
And that I want to say, Min, In an earlier stage in life, I felt exactly what you shared with us.
And to be honest, it was that experience that made me accept that I'm just an average person.
There's always going to be someone prettier, wealthier, wittier, or smarter.
And I learned this when I was studying. at the London School of Economics.
My classmates and alums were brilliant. And I realized no matter how hard I studied, there was always going to be a few people who would get better grades.
And even if I worked every weekend job in the city forever in my whole lifetime, there was no way I could out earn the daughter of the founder of LVMH, which owns Christian Dior and Louis Vuitton.
If I kept comparing, I would have burnt out or just have been bitter.
And that's when I realized the only pace I can go is my own.
And if we fixate on the gap between us and theirs, we'll never see how far we've come on our own journey.
And this reminds me of something I heard from Yuval Noah Harari, the author of Sapiens, at a talk in Beijing earlier this spring, he shared how he attended an elite prodigy camp for the brightest kids in Israel. six years with the smartest of the smartest but he said it was one of the most miserable experiences in his lifetime and it was all cutthroat competition and so much conniving backstabbing constant pressure to outperform everyone else as kids He only found peace and even greater success after he left that environment.
So Min, I just wanna say this to you directly.
You don't need to match anyone. I don't think you choose this path to compete.
You choose it to contribute. And I think your worth as a teacher isn't measured by titles or how you stack up against your colleagues.
In a way, your presence for your students, I think, is the most important thing.
So by any measure, men, you're already there.
Keep teaching in your own voice, improving as a human being at your own pace.
The impact you're making, I don't think can't be compared. it is felt by every student, every person that comes into contact with you.
So men, you've succeeded more than you think, in my opinion.
And so many women, maybe some guys out there too, but I'm a woman, so I'll just speak for my own perspective.
We tend to mark ourselves down deliberately or subconsciously.
We don't realize we already have so many eggs in our baskets that we've achieved so much.
It's often when we have to hit the 100th Mark, that is 100 out of 100.
Are we brave enough to say, I am worth a seat at the table, or I have something worthwhile for people to listen to, and I am not wasting this public space?
And actually, ladies out there, I think there's something we can learn from the rather confident or sometimes arrogant.
Some of the men, not all of them. Some of them are good.
Thank you. You're welcome. I was like, oh, there's one sitting right here.
OK. And, you know, sometimes it's like you don't have to be 100 percent to be.
To have a voice, to express yourself, and to feel that you are worth it.
And that's all I want to say. I might have gone off the course a little bit, but Min, I feel so much for you and for all the people out there.
If you think you're not enough, you are.
All right? Wow. You went to school with the daughter of Louis Vuitton?
Yeah. That was my biggest takeaway from that.
Well, she was an alum. Was her name also Vuitton?
Well, I don't really want to go deep down to that family business side of things.
But actually Louis Vuitton sold their company to LVMH.
And they're a luxury conglomerate. Okay, and that's All we want to say to our lovely listener, and if you like what you heard, please send your email or voice memo to roundtablepodcast at qq.com.
We'd love to hear your thoughts and share it on the show.
Coming up next, businesses grow, stumble, and sometimes fail.
For family enterprises, handing over control one generation to another often means more than just cold business strategy.
It's about relationships, too. So how do families pass the torch without burning bridges?
And what happens when business and blood collide?
Well, let's talk about this. All right. The last time China was buzzing about the second generation.
Taking over family businesses was back in the 2010s when the first wave of private entrepreneurs from the reform and opening up period neared retirement.
Their children, often overseas educated and tax savvy, were stepping into the spotlight, sparking debates about legacy modernization and whether they were ready to take the reins.
Today, the moment of transition is no longer just looming.
It's here. With an estimated 75% of Chinese family businesses facing succession in the next few years, the next generation is under real pressure to prove that they're not just heirs, but leaders.
Well, personally, I don't care who inherits the company.
It's none of my business. But when thousands of family companies are facing succession in a similar time period, it stops because just a family matter.
So why does family business succession matter to the broader economy?
To be honest, when I was looking into this topic, I had a very big question at the very beginning, which is what qualifies as a family business?
So here's what I found out. It's according to the US Small Business Administration that when a family owns most of a business, and at least two family members are involved, that's when this company is considered a family-owned business.
And these companies, they are typically small businesses, often with fewer than 500 employees.
And also here in China, the private enterprises play a huge role in driving China's economic and social development.
And among them, over 80% are family businesses.
So while this is very astonishing as well, they contribute over 50% of the country's tax revenue, generate more than 60% of its GDP, and account for over 70% of technological innovations, provide more than 80% of urban development, while making up over 90% of all business nationwide here in China.
So that's how big of a scope that private businesses are covering here in China.
And almost the majority of it, over 80% of it, are family businesses.
Yeah, it's kind of a really important time, isn't it?
Because you've got a window here where so many businesses...
There's the passing down, if you will, of all the reins to the company.
And if you wonder, oh, that's interesting.
Why are there so many companies? Which is what I thought first.
But then it does make sense, right? Because if family-owned businesses started, so many started at the same time, well, those founders would have been of age now where they need to pass the reins again to their successors.
And there are so many. And that's why this is such a big deal right now.
Yes, indeed. In reality, rarely do heirs simply parachute into the CEO seat.
Many need to learn the ropes, getting familiar with daily operations, company culture, or even working their way up from the bottom.
In recent years, a number of second-generation family members, some even before formally taking over, have taken to social media, creating viral short videos to promote their family businesses.
I mean, let's take a look at all the different strategies that they've adopted to And are they effective?
Sort of, because right now across China, traditional industries, they're getting more and more creative, let's say, in order to stay competitive in the changing market.
And within this wave of family business succession, second generation leaders, they are steering up these companies in all kinds of new directions.
In Shanghai, for example, one machinery manufacturer is tapping into short video marketing to reach new customers, learning directly from on-the-ground experiences and also finding ways to keep staff engaged even during market slowdowns.
So I realize nowadays a lot of second generation leaders, they are exposing themselves in front of camera on social media a lot more as a way to, you know, just making their brand more down to earth among public.
And sometimes it makes perfect sense, right?
Like a machinery manufacturer marketing themselves through short videos is kind of a fun, different twist.
You wouldn't expect that kind of marketing from a machinery manufacturer.
But then other times it makes total sense, right?
There's a distillery brand. in Shanghai and they're preserving their traditional heritage of brewing and they're launching co-branded products like alcohol ice cream and they're also converting old plants into some cultural tourism hubs. which is kind of a cool, young, trendy, modern thing to do for a distillery.
There's one more example from Shanghai as well, a tofu producer.
They're upgrading their environmental facilities.
It's in the suburbs of Shanghai. So they're modernizing their management.
They're leveraging overseas experiences to connect with e-commerce clients too.
And also in eastern China's Zhejiang province, one water cup company's successor blends his love for music with brand promotion as well.
So they're coming out with all different ideas on attracting people's attention.
This one is going for a posting guitar performance for his dad on Red Note, Xia Hongshu, while rolling out upgraded products.
So In a way, they are being engaging, but also the way I see it, not in a bad way that I'm calling them this, but it seems to me that they're making themselves mascots of the brand.
Or maybe like spokesperson, poster girl, boy.
Putting a face to the company, right? It can be challenging.
If you're a machinery manufacturer, how do you get in touch with people? a new customer base if you're a water cup company what are you supposed to do so blending that love of music which is prominent on social media right and then you know with your company in the background of course or in the forefront i think it's kind of a cool smart idea yeah well for young people who are usually more tech savvy who grow up in the era of social media this is the tool they know how to use so they're using it to their leverage to help out the family business Of course, every situation could be more or less different.
And I'm sure the companies will come up with their or the founders still come up with the best sort of succession plan.
But I remember from 2014, when last this was talked about a lot in China, there was a survey conducted, which found that 40% of the so-called second generation successors wanted to get involved with their family business.
And 60% didn't care. They wanted to take the money and just do other stuff.
This is a little bit of a broad question.
But you know, second generation successor or not, or maybe hiring somebody who's a professional CEO manager to come and do this job.
Yeah. How do they make this decision? There is no perfect choice, I guess.
Right. Sometimes bringing people up from in-house, you know, family members can be a wonderful thing because, um, They don't have to create the brand from zero.
They inherit all of that. So they inherit that.
They inherit the operations, the customers, the revenue.
And then those second generation leaders from in-house, from the family, they can focus on their strategy, on their growth plans with the company.
That can be a really wonderful thing. Conversely, if they're not prepared, if they don't know about the customer base, if they don't have any plans for growth in the future, that can go very, very poorly.
And in that case, bringing in CEOs or a board from outside might not be such a bad idea.
So it can work and it can't work. And also data proves that as well.
A 2020 McKinsey report reveals that in Western countries like the UK and the US, only about 30% of these businesses are successfully passed down to the second generation.
So maybe for individual businesses, they need to consider what's better for them.
So sometimes hiring professional managers, skillful ones with very experienced external perspectives might help.
Yes, indeed. We see that, you know, for these companies to continue being handed on one generation to another, of course, you know, very shrewd business strategy operation, these are very important.
And also, institutional trust, solid legal protection, rule of law, and having a very stable business environment, all of this matters for it to happen.
And thank you so much, Steve and Yushan for joining the discussion.
I'm Ha Young. We'll see you next time.
