Richard Eu - Family Politics, Consolidating Power, Going Public & Taking Private [The Business of Family]
The Business of Family
How Do You Differentiate Clinic From Pharmacy?
"We felt that there was a gap in the market to have a professionally run TCM clinic, which captured non-traditional users of TCM. And that's what we did," he says. "I think largely, we apply some of the things that you learned from the failure into your existing business."
Richard Eu is a fourth-generation Eu. His grandfather was tycoon and philanthropist Eu Tong Sen who remains a legend in Singapore for the vast commercial empire he built across Southeast Asia in the early 1900’s. Tong Seng had 11 wives with whom he had 24 children, setting the stage for a complex and conflicted period of succession following his death in 1941.
One of the family's last remaining businesses, Eu Yan Sang, a network of Traditional Chinese Medicine dispensaries, was founded by Richard Eu's great-grandfather Eu Kong and the family's fifth generation are still in the business today. This is a gripping story of family politics, loss of control, re-consolidation, an IPO, and ultimately privatisation of the family firm once again.
Standout Quotes:
- “My father told me when I was still studying that I would not expect to be able to work in any of the family businesses after graduation because of the family politics” – Richard Eu
- “If you want to institutionalize the business, it cannot be in family hands forever” – Richard Eu
- “When an institution buys into a business like ours, to a large extent they also buy into the culture that's been set up there by the family and they should be crazy just to lose it” – Richard Eu
Key Takeaways:
- If you want to institutionalize the business, it cannot be in family hands forever
- One of the problems that we had from the 3rd generation was that nobody called the shots, yet because they were individuals they didn't think like as institutions, they just thought about their situations
- When an institution buys into a business, what they should do is preserve the culture and manage it in a modern and efficient way without trying to kill the original culture
- It's not just about financial ratios or balance sheet, you have to bring in the heart
- Good communication helps build trust in the family business
- From Richard to his kids: when I’m dead and gone, they should look at themselves and see if they are on the path that we set off to follow as a family
Episode Timeline:
- [00:48] A brief introduction to Richard Eu, who shares a detailed history of the multi-generational family business
- [08:15] Richard joined the business at 42, although his father did not expect he would be able to work with any of the businesses because of the family politics involving his uncles
- [16:56] About the TCM family business "Eu Yan Sang", with more emphasis on the challenges posed by politics affecting the family business.
- [34:20] Despite all the challenges, the family business experienced consistent growth almost every year.
- [38:20] Richard describes one of the problems that began from the 3rd generation
- [42:01] How two members of the 5th generation joined the family business
- [47:00] Do you have any favorite failure that set you up for success in the family business?
- [50:42] A major learning point for Richard; Communication
- [52:26] From Richard to his kids
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Special Guest: Richard Eu.
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Links:
- Richard Eu Profile | Endeavor Malaysia Mentors — Richard Eu was appointed to the board as Chairman of the EYSI board on 1st of October 2017.
- Eu Yan Sang International - Official Online Store — A network of Traditional Chinese Medicine dispensaries, was founded by Richard Eu's great-grandfather Eu Kong
- Eu Yan Sang: Healing a Family and Business | INSEAD Case Study — This case and teaching note explore one of Singapore's early entrepreneurs and the family business empire he created.
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