I recently held an interview with Mr. Lee Yuan Chief Executive Officer (CEO) of King’s Confectionaries Supply Chain company, a flourishing family business in Shenzhen, China. The business has been in operation for fifty years, rising to become the leading bakery in the region, controlling a market with a share of 45% of the market in Shenzhen. The business provides both goods and services. It sells groceries, vegetables, fruits and other related products. Kings Confectionaries also owns various restaurants where customers can walk in and be served with fast food. The interview took place on September 14, 2018 at the online Skype. Mr. Lee Yuan is a 42-year old Chinese American, who hails from New York. Prior to starting the business with his brother, he worked as a Human Relations (HR) professional in Silicon Valley for 15 years, working with different companies, including Google. He graduated from Stanford University with a degree in Business Administration. He quit from his position as the Chief for Human Resources in Silicon Graphics in Silicon Valley, California in 2007 to begin his new fresh business in China with the connections he had built up in business relationship.
I chose to conduct this interview with Mr. Yuan for various reasons. First, Mr. Lee is a person I have closely followed as a business person since he established his business in Shenzhen. I believe we have similar interests in both human resource management and entrepreneurship. Mr. Yuan has had a successful career as a human resource professional and is currently enjoying similar success in entrepreneurship.
As far as entrepreneurship is concerned, I learned a wide range of issues including identifying problems, creating solutions, getting funding for the business, and partnering with other partners to make the business successful. From my discussions with Mr. Yuan, I gathered that entrepreneurship is all about identifying gaps or problems in the community and creating solutions that can help people to deal with those problems. Thus, entrepreneurship is not about making money or being rich, but rather, solving issues and problems in the community. Once people believe in the solutions you bring on board, then the opportunity to make money comes in. Therefore, an entrepreneur must be able to identify and understand the challenges that the community is facing in different fields. This can be done by analyzing and evaluating currently solutions available and identifying their weaknesses. It can also be done by looking at areas that have not been properly addressed in the community, where no solutions exist, and inventing new solutions based on technologies that make life easier for consumers.
Business funding is not easy to access for new entrepreneurs. Most entrepreneurs expect to get venture capital from angels. However, according to Mr. Yuan, only a small percentage of entrepreneurs get such funding. First, he advises that the best way to fund a business if form personal savings and getting support from friends and family. Although, a bank loan is another way but it’s also a risk way if your business doesn’t go well. The other important element of entrepreneurship that I gathered from Mr. Yuan is people management. As an entrepreneur or someone who want to do business, they need to deal with peoples all the times. Either employees, suppliers, customers, or financiers, know how to better recruit people on management it required some short of leader skills, and it will be the strong skill in entrepreneurship. Second, understand the culture difference in different country. Like China as known as the highest context culture country, the best approach in starting to build relationship with others. When individuals from low-context cultures like Mr. Yuan and do business in low-context cultures, they often encounter difficulties in the process of information exchange. These questions can be divided into the difference between “direction”, “quantity” and “quality”. China, speech is less concerned than a relationship, which also shows that China is a very high context country Mr. Yuan said that “in my understanding, doing business in China depends more on mutual trust and understanding by their subculture. We also need to understand their folk customs and build the stable relationship; however, this kind of relationship is established slow.” The other important element I gained form the interview is family business. Mr. Yuan’s company is a family business that he started with his brother with funding from other family members including parents. Therefore, other family members have a strong interest in controlling the direction the firm takes, Yuan’s father, brother are part of the company’s board. His parents are still very well-connected in China, and they understand the cultural background of China. When Mr. Yuan saw the opportunities for China’s future development and the huge market, he decided to go to China to develop his career. The main issues I wanted to know about family business in my interview with Mr. Yuan concerned change management and succession management. Based on my interactions with Mr. Yuan, I conducted on family businesses in China, I learned that that family businesses account for about 50% of the market of China. There are more than 40% of family businesses that do not yet have adequate plans for succession. The health and sustainable growth of a family business largely depends on careful planning of transition from one generation to the next, an area that has not been approached with great caution leading to collapse of some of the most iconic family organizations in the country.
Succession of family business is a very critical element of managing and running family businesses. In order for a family-owned company to thrive and grow stronger into the future, it has to rely on the leadership qualities of the leaders taking over through the generational changes. Therefore, succession has to ensure the only the right people take over the management of the family businesses. Technological innovation has also forced many organizations to restructure their business processes, alter their cultures, and improve their operations in order to remain relevant. Some family businesses have also been influenced by technological innovation in shaping its HR agenda. Technological developments and innovations such as internet and mobile phone based communication technologies have resulted in create a more interconnected global society.
The interview process was very fruitful based on the wide range of issues I gathered and learned from Mr. Yuan. The interview revolved around issues of human resource management, entrepreneurship, and managing a family business. Mr. Yuan was very cooperative and generous in the information he gave out, enabling me to understand the intricacies of each of the core areas of focus in the interview. Several issues from the interview were quite surprising. , as concerns entrepreneurship, I was mostly surprised at the fact that it is difficult to get financing for businesses. I have seen many businesses grow very fast due to the funding they get form venture capitalists. Many businesses like Airbnb, Uber, have become globally relevant businesses because of their ability to draw attention of the market and get investment, he said that the new business models’ success of these companies bring impression that it is easier to get funding since they have “nothing”, Airbnb doesn’t really own a house, as well as Uber doesn’t own a single car. In the future, Mr. Yuan suggested me that if I want to get a good financing or load, I must caret a new business plan with the basic analysis, such as feasibility analysis, SWOT analysis and PESTEL analysis). Also need to consider of the market share and do a lot of market research to support the ideas.
On the contrary, Mr. Yuan expressed that accessing finding is one of the biggest challenges entrepreneurs go through. Since the main reasons contributing for the death of most family businesses are internal management issues such as succession planning, which most business do not focus on in their strategic plans. Therefore, a good, trustworthy candidate is important for a business.
Finally, as far as leadership is concerned, I learned that networking is an important process, particularly when one is hoping to start a career in any particular failed. Talking to different people in one’s preferred field opens up multiple avenues for success in one’s career. Networking also helps to create a rapport with industry leaders and other key players. This is important in creating legitimacy through giving an individual referral power due to the connections they have in their particular field. Furthermore, networking helps one to get a job, promotion, or other leadership role such as in professional organizations in the field of their choice.