True Love – True Family – True Business

Talking about family business is always interesting. The fact that family business
contribution to business world is one third listed at fortune 500 companies are family
business which contribute 40 percent of GNP in United States. Same case in
Indonesia, family businesses are about 89 percent and, amazingly the minority
population of which Chinese (4 percent) controls 70 percent of the trade.

According to Monash University research, 71 percent family businesses in Australia

are run by the first generation, 20 percent of family business is run by second
generation and the rest are run by the continuing generation. In Indonesia, there is a
myth of generation to generation who runs the business:
The first generation creates the business
The second generation runs the business
The third generation is not purposely but to make the business bangkrupt

Seeing is beleiving
Just after I graduated MBA from Cleveland State Unniversity in 1995, I worked in
Cleveland for almost two years. At the end of 1996, I moved and worked in Jakarta,
Indonesia until year 2000. That was the most terrible economy due to
multidimentional crisis. I wanted to return to United States inspite of my family
business. Since my parents thought I was mature enough to handle their family
business, I started to run the company as a GM (but I thought I deserved the title of
“Garbage Manager” instead of General Manager) in building material trading
company.

After the year 2000, I was tursted to handle my parent’s Chinese typical company as I
was the oldest son. Day by day I tried to set a system to make a better shape
company. However, the corporate culture in which my parents applied was so rooted
to the ground. I tried to find out what was wrong in sociology and anthropology wise.
In management wise, I believed the company was technically good. After analyzing
Masow theory, I found out there were point of view differences (illustrated below).

Maslow’s Hierachy of Needs:

Self-actualization
Esteem
Social
Safety
Physiological

Chinese Need Hierachy:

Self-actualization (to serve the society)
Safety
Physiological
Belonging (social)

As F. L. K. Hsu written in American Anthropologist “Psychological Homeostasis and

Jen” has pointed out, in the collectivist Chinese Culture, the concept of “self” is quite
different from that of the Western concept:
 ...the Chinese use a concept of “jen” (man), which is defined as the
person plus the salient, intimate societal and cultural environment
that makes her or his life meaningful. This implies much less
differentiation in the self-concept of individuals and stresses identity
as a social phenomenon.

Trying to solve the psychology side, McGregor’s theory x and y was ill-used to
practice in my family company. Instead of being efficient, my parent always
involved in a daily operation to lead their hands-on practice. Delegation was not
fuction well due to ill-used. I tried to create positive thinking that my mother who is
more hands-on than my father to deserve a CEO title which is mean “Chief
Emotional Officer.”

Tired of being ping-pong bounched resulting nothing, I set-up a management

consultant company in 2002 with the goal to immune the ill-effective family
company. My practice was adopted from Jewish Business Community who insisted
their son or daugther to set-up his/her own company along receiving a inheritance of
family company. Five finger philosophy is found to practice in the family business
company.
Giving two thoumbs up is applied if the person respected to the parent in the mission
of the company not individual.
When you pointed out with your index finger to delegate someone, you should use
management knowledge.
Middle finger representing a marketspace in taking advantage of technology.
Ring finger is shown by your ‘global character’ to solve and save the business world.
Last but not least, little finger is a must to have an entrepreneur sense to continue a
family business.

In researching the family company that would sustain, I identified some key
points:
A culture that believes in resisting an offer that seems too good to refuse
Recognition of family value as equal as market value
Leaving children a legacy of opportunity instead of wealth
To build a family pride, the position should be earned not granted
A second generation is allowed to make his/her own mistakes and create a
new management style for the sake of company mission

I hope my experience can be used for many family businesses in the world.
I can be reached in daudtj@daudtjondrorahardja.or.id

Daud Tjondrorahardja
www.daudtjondrorahardja.or.id