Many of Joo-Lee Aw’s clients as part of her work in the AltoPartners partnership comprise family-owned businesses, ranging from mid-sized companies to internationalised entities worth several hundred million US dollars.

It’s a diverse region in terms of where companies are on the succession curve: “In Singapore, Philippines and Malaysia, family-owned companies are between 50 to 70 years old, but in China, many companies are still run by the founders as they are less than a decade old. Japanese companies are older (3rd generation plus), and in Europe, I tend to deal with the great-grandchildren of the founders.”

Businesses in Singapore are about 50 to 60 years old [Singapore obtained its independence on 9 August 1965]. As a result, many of her local searches are to replace founders or to help the second generation with a succession plan.

Even so, Singaporean family-owned companies are highly internationalised and very sophisticated: Singapore is one of the world’s most prosperous nations, with a highly developed free market economy and strong international trading links.

Whether it’s partnering with the founder of a hugely successful Singaporean hospitality company or the grandchildren of a French B2B business, the challenges when it comes to succession planning are the same. For Aw, that has meant attending a formal company dinner-dance hosted by the founder and attended by 500 employees and their partners, in the quest to truly understand what makes the company tick.

One of those challenges comes from the founders of companies. “Dealing with founders takes stamina and a commitment to immerse yourself in the company culture and gain the trust of the founder.”

Timing is everything. “You can go to great lengths to try to find the right candidate, but it’s often all about timing”. Joo-Lee spent months on a search only to have the founder figure out that he wasn’t ready to step aside. Even so, it was a good time to start working with him on a succession plan and convince him not to just kick the problem down the line.

Founders tend to look internally first because they are ultimately looking for someone they can trust – with the business and with their legacy. “A big part of our job is assessing if the preferred candidates (other family members and faithful retainers) are up to the job of leading the company into the next phase of its growth and development. Sadly, loyal employees are not always the most suitable candidates to take over from the founder.”

When dealing with founders, or the first successor, the search / process tends to be more emotional. You have to be able to talk freely with the incumbent or chair, which means they have to trust you. Intuition and experience – along with a sophisticated network and a pipeline of potential candidates to choose from – are her secret weapon when it comes to advising family-owned businesses.

Joo-Lee Aw, Founder and Managing Partner The People at Work / AltoPartners China and Singapore

READ AltoPartners White Paper on succession planning in family-owned businesses