When she was about to graduate from her studies in economics, accounting and law at the University of Bristol in the UK, Michelle Yong received a letter from her father, Yong Tiam Yoon, deputy chairman of construction conglomerate Woh Hup.
In the letter, he told her she should not join the family business, which had been founded in 1927. Michelle’s brother Neil received a letter from him too, but his missive informed him that he would be joining Woh Hup as a member of the family’s fourth generation.
Why the different messages? Many family businesses have a tendency of not lasting beyond the third generation (only 3 per cent make it to the fourth generation, according to a 2016 PwC Global Family Business Survey). “My father wanted to spread the risk,” Michelle explains. “It didn’t come as a surprise. He hadn’t been grooming me for a role in the family business, and I understood the rationale.”
Still, there was something about the idea of a family business that intrigued her. When she subsequently began her master’s degree in economics at the University of Oxford, she decided to focus her thesis on the third-generation curse that had so preoccupied her father, positing that one way to break this curse was to launch ventures in adjacent markets, business models or technologies, and keep the leadership of these units within two generations of the family.
A few years later, her insights in this area were further informed by professor Marc-Michael Bergfeld, an expert in the field who characterised the core family business as a “castle”, and new growth opportunities as “settlements” that family members could develop into profitable “villages”, which may in turn mature into “castles” in their own right.