Generation Gap Fathers
and sons, like gasoline and matches, are a potentially
explosive mix. Seeking sparks, Asiaweek's Crystyl Mo interviewed
two prominent family duos but found they had more in common
than expected By CRYSTYL MO
Maybe if Antony Yip wasn't so smart
he would have finished college. But with a father who, at 28,
built a technology company that attracted $43 million dollars
in orders and then two years ago led the first Nasdaq listing
of an Asian portal (Hong Kong-based Chinadotcom), what else
can a kid do? In 1996, Antony dropped out after one year of
school in the U.S. to become an entrepreneur like his dad Peter
- despite the father's strident objections. By the time Peter,
48, raised $78 million taking Chinadotcom public in 1999, Antony,
22, already had several years of start-up experience. In April,
his second Internet company, Chinese-language portal Myrice.com,
was sold to Lycos Asia for $12.75 million.
Which works better in today's business
environment: A traditional Asian organizational model based
on authority and strict hierarchy, or the chaotic, creative
Silicon Valley system?
Antony Yip: It depends on which country you are talking about.
For example, China has always been viewed as a copycat. They
can build things faster and cheaper, but you never saw it as
a really creative place. But now you see young people at ground
level trying new things. The downside is if you're going to
have creativity among lower-level people, you need good middle-management.
In China that hasn't really developed yet.
Peter Yip: It depends on the stage of the company, too. In the
early stages at Chinadotcom, we needed input from all levels
of people. But as the company matured - now we have 2,000
employees - we needed a reasonable structure with priorities
being set. In particular with this slowed-down economy, decisions
need to be made and some of the decisions are quite painful.
Peter, do you feel your business experience
makes you a better entrepreneur?
PY: It depends how you define it. Entrepreneurs have leadership.
They can bring a great collection of people together. They can
carry a company through its early stages. When the company gets
to a certain size you need to learn to delegate - to bring
in professionals with more experience than you in areas like
finance or marketing. Older people see more things. They have
had more chances to make mistakes and learn from them.
AY: Actually this is very interesting. As you gain more experience
you begin to see more risks. That makes you cautious. But when
you have less experience or no experience, you think you can
take on the world. A lot of these new companies can become successful
because of that.
Peter, would you have made the same
choices as Antony?
PY: Oh no! I have a mortgage to pay! I have family to support.
Antony, you dropped out [of college], no one is looking up to
you. You have nothing to lose.
Many Internet inventions like Napster
and Hotmail were started by people under 30. So were hundreds
of failing dotcoms. Does this mean young people aren't really
able to get the job done?
AY: Young people inherently are not business people. The person
who created Napster didn't create it because he wanted to create
a business. He just thought it was cool. What's difficult later
is the conversion process - making it a business.
PY: Well, Bill Gates was very young when he started. It's hard
to make a generic statement. Certainly bringing in a new paradigm,
unconventional ideas, new processes, new ways to communicate
- younger people bring this kind of energy.
Has the new economy failed?
AY: No. Look at the total value creation of all Internet companies
versus five years ago. Basically you're talking about X versus
zero. So that's one easy way to look at it. But more importantly
if you look at traditional companies, they're just beginning
to develop their Internet programs. Even as Internet stocks
have plummeted, traditional companies are embracing these technologies
and deploying them in their organizations. That has to be called
a win in terms of how the Internet has been incredibly effective.
PY: I agree. The fundamental attributes of the new economy -
being digital, being connected - are still there.
Can you each name a few qualities that
are important to modern, global corporations?
AY: Flexibility. As things are changing, you must be flexible
in terms of seeing how trends are moving. Or more importantly,
how each market is different. If you give people you respect
for their intelligence more autonomy within a certain region,
they may build a business better than if it were managed from
a global headquarters.
PY: I think one has to be proactive. Particularly in a technology-based
industry - you have to stay ahead of the curve.
AY: My turn? Relentless. If you're going to be a global player,
you must be relentless in attacking new markets.
PY: Yes, relentlessness is important. If you give up easily,
your competitors will destroy you. My second quality has to
be that the employees and the management team must be very passionate.
What is the next driver of tech growth?
PY: Wireless is an area where we can sink a lot of effort. And
the second area, of course, is China.
Peter, what should Antony do next?
PY: Well, he's done a lot. As a father I feel very proud, despite
the fact that he didn't finish his college degree [Antony grins].
He's done a lot more at 22 than many others who have a college
degree. So it's good for him to take some time off, to explore.
He's doing the right thing.
Antony, it's on the record!
AY: This is the first time he's ever said that! It's the nicest
thing he's ever said about it!
Chen Yifei and his son Richard Chen are attempting to launch
a fashion and media empire. They've got the backing of Softbank
and Vivendi Partners, a team of experienced professionals and
a "bricks-and-clicks" business model that includes 167 retail
outlets for their LaYefe clothing line. In the works are an
e-commerce website and a chic home furnishings line. The only
hitch is, the family's Yifei Group is based in Shanghai. It's
Ralph Lauren meets Deng Xiaoping. Now add a generation gap to
the equation. Chen Yifei, 55, Yifei Group's CEO, grew up under
communism. Richard, 28, studied management and economics in
the U.S. and England before joining Yifei as CFO. The challenges
they face reflect the struggle of Asian corporations everywhere
to bridge East and West and marry tradition with innovation.
Richard, do you ever feel pressure working
for your father?
Richard Chen: I do feel I have more pressure to demonstrate
my abilities because my father is the CEO. We work as a team.
Even when we have conflicts we try to tackle the problems together.
Chen Yifei: We should give him pressure. We should put pressure
on the young generation. The people at this company should perform.
Why is your online model so aggressive
when Internet disenchantment is so high?
CY: Just at the point when people have doubts about the new
economy, that's when I want to go forward. Only at this time
can you can find the best talent. The old economy is a solid
structure that needs a kind of revolution. The new economy is
a means, a method of delivering a service. I think they must
combine.
What mistakes did dotcoms make?
CY: Those that are failing now didn't have a solid offline model.
They wanted to take shortcuts to earning wealth. In this world
there are no cakes that will just fall from heaven. You have
to plan carefully how to generate profit. How crazy they were
to think they could just rely on ads - this doesn't make sense.
Do you think their failure lies in
youthful management?
CY: No, I think young people can do very well online and offline.
But many didn't understand profits don't come quickly. They
were seduced by the prospect of quick riches and jumping into
an IPO. Dotcom companies viewed the new economy as the main
goal, not as a tool. That was their biggest mistake. I tell
my friends: Now it's young people creating and inventing, at
the end it will be old folks coming to put things in order.
RC: The younger generation obviously needs advice from the older
generation in terms of how to communicate, how to tackle personnel
issues, how to set up company structures. The younger generation
is quite brave in terms of venturing into new industries like
the Internet. But in terms of the details, the discipline, they
need training in a bigger corporation.
Does your company utilize a Chinese or a Western business model?
CY: It's Chinese and Western methods combined. We're diligently
researching Western models.
RC: A pure Western model will never work in China. In American
companies, organization charts are very flat. In China they
are still very vertical, centralized to facilitate the decision-making
process. We're trying to adopt both vertical and horizontal.
The problem is how do you blend them perfectly. If you bring
the horizontal structure in without checks and balances, in
China it becomes very chaotic. People all go off and do different
things. But in a vertical structure, people only focus on doing
one thing. They don't make decisions, they rely on the boss.
This suppresses creativity.
Is there a way to strike a balance?
RC: A traditional Chinese company is run by the family. The
family makes the decisions . . . you work for me and if you
don't like it, you leave. The world is changing. Now work is
more collaborative, you seek consensus. People work together
and it's fun. We give our employees good salaries, career ladders
and also stock options. That gives them something to look forward
to so there is future development. We work as a team instead
of as a family.
Are there traditional business practices you think are important
to preserve?
RC: One thing we want to preserve is the strict discipline of
traditional corporations. This is one phrase I learned today:
"You use Buddha heart to deal with people but you use strict
discipline to manage the company."
CY: The biggest problem with traditional models is that they
are too conservative in terms of the development of products
and the fostering of talent. This type of company is like our
state-owned enterprises. Traditional models will survive for
a short while. But young people who can speak English, use computers
and understand Western markets will definitely take advantage
of new economy methods, and old models will become less popular.
Can capitalism and socialism coexist?
RC: I think they can. Capitalism is good for the economy. It
imposes strict discipline on efficiency.
CY: Maybe Richard doesn't understand this. I've lived in both
worlds. I've lived here through the Cultural Revolution. I've
stayed in the West for more than 20 years. I've seen the good
things and the conflicts with the capitalist system. We need
to develop something totally new. There's this term we often
use: "socialist market economy." To tell the truth, I don't
really understand what that means. But what we're doing is taking
what we see is good from the outside and utilizing it for ourselves.
Commentary
2003-12-06
Coming soon to the commentary column--behind the scenes stories of the how the articles are really put together--the difficulty in getting anyone to accept an interview in China, the political sensitivities, the great stuff that got cut because of space, and much more about the joys and frustrations of writing in China
