"Human Resources are priceless."
The title is a quote from Thailand's wealthiest man, Dhanin Chearavanont, the senior chairman of Charoen Pokphand Group (CP). The conglomerate is one of the world's largest animal feed and livestock producers and Thailand's largest family enterprise that dominates the agro-industrial, food, telecom, retail, automotive, and finance industries, with an annual sales turnover of US$ 63 billion. The group is not only the richest family in Thailand but is also the fifth richest family in Asia as of March 14, 2023.
The family fortune traces its roots to selling seeds in 1921 when Chia Ek Chor fled his typhoon-ravaged village in Southern China for Thailand. Together with his brother, they opened a small store and built a seed trading business in the Chinatown district in downtown Bangkok. From 1969 to 2017, the group was led by Chia's youngest son, Dhanin, who still holds the role of non-executive senior chairman today. Alongside Dhanin are his three brothers, Jaran, Montri, and Sumet, who all have key positions in the company.
The succession strategy of CP Group is not only inspiring but also a wonderful case study on how Asian conglomerates (particularly those with roots coming from China) should be run by second and third-generation family members. How did the founder, in the early stages of CP's existence, cultivate a mindset that recognized human resources as a key business driver for corporate transformation, organizational success, and sustainable growth? How did the founder influence his offspring to embrace and trust non-family executives to occupy senior positions up to the level of CEO? I found the answer more than 7 years ago when I was invited to share my experience, capping it with a series of strategic masterclasses for their executives.
Amazed at how CP grew its workforce to more than 200,000 employees (now 450,000) spread in all corners of the world, I decided to do some research and stumbled upon an interview of Dhanin by Nikkei Asia where he explained why in the early life of CP way back 1940s, professionals were welcomed with open arms. Dhanin said, "My father could not speak Thai very well, could say nothing of English, so how was he able to conduct negotiations with foreign companies? By hiring a Briton by the name of Alexander Campbell. The latter handled all aspects of external negotiations with foreign companies." He continued, "In hiring Campbell and giving him such an important position and a generous salary, my father planted the seed of an important part of our corporate culture: a willingness to employ capable people regardless of their nationality. This is one of the reasons Chia Tai, which started as a tiny store with only a handful of employees, could quickly join the ranks of international businesses."
I also asked Patt Soyao, the founder of Icon Executive Asia, a preferred executive search firm by family enterprises based in the Philippines, and he offered some tips for family members, "Finding the right professional fit for a senior-level position in a family business is critical but it must be emphasized that as far as human resource is concerned, family firms are different from non-family business organizations. If a founder wants his business to grow and reach greater heights, the fundamental question is how prepared the family is to share power and confidentiality, and how open and willing are they to actually do it? If the family business is looking for a senior-level position, is the leader and his offspring ready to empower and delegate important responsibilities to non-family executives? What about active family members? Are they ready to raise their work standards? And talking about tenured employees who have been loyal to the founder and the organization for decades, are they prepared to cooperate with the new hires? In short, recruiting credentialed professionals comes with a price tag, but apart from the monetary component, is the family and the decades-old culture ready to commit to a dramatic change in mindset? That is why our search protocol for family firms is different, deliberate, and customized."
For insights on how to develop your next-generation leaders for the long-term success of your company, I encourage you to join me and family business expert Dr. Josh Baron in W+B Advisory Group's upcoming executive event in partnership with Icon Executive Asia entitled:
Family Business Continuity: Ensuring a Fail-Proof Succession Plan
July 15, 2023 (Saturday) | 12:00 p.m. to 5:00 p.m.
Crowne Plaza Manila Galleria
Registration Link: https://forms.gle/UmEf6eSvEe8EVgKB8
For additional information and to access exclusive event promo discounts, please reach out to Marivi at Icon Executive Asia via email at email@example.com.