How to Set the Foundations for B Grimm’s Next 135 years; B Grimm was established in 1878 and now is one of the oldest corporate citizens in Thailand.

Ways to sustain family business

Kwanchai Rungfapaisarn
The Nation May 25, 2013 1:00 am

Academic offers advice at workshop on B Grimm

In the era of globalisation, family-owned businesses are facing major challenges to ensure long-term sustainability. Christine Blondel, adjunct professor of entrepreneurship and family enterprise at the global business school INSEAD, said family businesses had some specific strengths and weaknesses. She said the major problems in such ventures were caused by family fights that flared up because they had no clear rules of the game. These internal battles occur because some family members work for the business while some do not, and they have not communicated enough. They do not understand enough what is going on in the business. Another risk occurs when family members lose the entrepreneurial spirit that made their business a success. One of the most important points is that they have to ensure that this spirit is kept alive from generation to generation. Blondel this week held a workshop titled “How to Set the Foundations for B Grimm’s Next 135 years” for the management and executives of that family-owned business, which was established in 1878 and now is one of the oldest corporate citizens in Thailand. Owned by the third generation of the Link family – Harald Link, chairman of B Grimm, and Caroline Link, president of B Grimm Real Estate – it is a multifaceted business active in the fields of energy, cooling, healthcare, lifestyle, transport and real estate.France-based INSEAD is one of the world’s leading and largest graduate business schools, with campuses in Singapore, France and Abu Dhabi.
“One of the problems faced by family members is that they have forgotten to look at the competency of the business. Many members are in a position that is not good for them and their career is not properly managed. 
“Many family-owned businesses failed as they lacked good communication between family owners and managers,” Blondel said.
On the other hand, she said, the strength of family ownership is that the principals have a long-term view and commitment to the business’ sustainability and attachment to people. 
“A family business is a sustainable form of business, and that is why we believe we should support them at INSEAD. First of all, you have a family that owns the business and transmits from generation to generation commitment to the long term. You can witness much higher commitment to the long term. You can see value being transmitted from generation to generation within the business, and also commitment to the people, to their employees that make [up the] family business. Family business members have also managed their own money with a sense of responsibility.”
Blondel said that to ensure sustainability of the family business in the long term, the owners first of all had to make sure it was not too dependent on them, that it could be run through a board of directors consisting not only of the owning family but also outsiders. It is also must be able to sustain itself with a good level of management at every level. 
Family owners must be open and put a high focus on communicating within the family about the future, succession, and the respective role that each person can play, whether he or she will be an owner, a manager, or just support the family unity. They should have rules within the family on what will happen if someone wants to join the business and what will happen if someone want to sell some shares. Without such rules, it will be difficult to make decisions when the circumstance require them.