To enable a successful transition, a family business must find its own ‘true north’ to guide it, says Maximilian MA, Chairman of Lee Heng Diamond Group.

When it comes to the evolution of family offices in Asia, we are now at a critical juncture where family businesses must decide on a way forward. According to Maximilian Ma, Chairman of Lee Heng Diamond Group, and founder and Chairman of MaBelle Jewelry, navigating these difficult seas start with defining your family values.

“To define a set of family values, you need a kind of compass,” Ma says. “You need to define ‘true north’, and you need to have a magnetic needle which points you in the right direction. That way you’ll always get where you need to go, because you have ‘true north’ and your compass to guide you. I think this idea plays a very important part in the transition,” he says.

Ma believes that once a value that can act as ‘true north’ is found, future generations will be able to use it to carry on the family legacy while moving forward in their own way. But how does a family find its ‘true north’? Ma says that it’s up to everyone to find their own version of it.

The topic is relevant for governments, universities, individuals and businesses alike. Many entrepreneurs who started their businesses in the 1950s or 1960s are now reflecting on their success and looking at ways of transforming the business for the next generation.

“In Asia, I think more than 98 per cent of businesses are family owned, although perhaps not in terms of market value. I think a lot of owners are anxiously thinking about what’s going to happen to the business that they created, or their father created. They want to know how it is going to move forward,” he says.

The younger generation think differently

Ma says that to answer the question of how to move forward himself, he had to accept that things might progress in a different way to what he had anticipated. The younger generation have been exposed to more influences, and been offered more opportunities, than his generation, so they see the future differently.

Ma himself had more opportunities than his own father, he notes. His father died when he was only 12 years old, and he took over his successful diamond trade business. To keep the company successful, he developed a new vision for the business, and disrupted the industry by creating large-scale retail chains that offered fixed-price, widely affordable and fashionable diamond jewelry that could reach a broad demographic.

The result was the widely successful MaBelle store that boasts over 50 shops in Hong Kong and 40 in Mainland China.

Ma says that while the older generation may have only been influenced by one school of thought, future generations come with a mixed bag of Eastern values and Western ideas that inevitably influence how the family business transition takes place.

East and West

Ma says there is often a constitution and a set of written rules in the West, where things tend to be more structured. In the East, it often comes down to values that people understand but have not usually written down.

“In the West, they live under a court system with a jury, but in the East we defer more to our values. Hong Kong is a very interesting place because there is a convergence of these two ways of doing things,” he says. “The challenge going forward results from this clash of ideas, because the next generation has been very well educated, and many of them have studied overseas.”

To deal with the different ways of looking at things, Ma’s family set up a Family Forum. They wrote down all the things that the family stood for, established what they believed in, and ensured that all the stakeholders met once every two months to remind themselves of these values. Ma noted that this method was particularly useful as the family began to grow.

He is proud of the fact that today the Family Forum is not just him and his brother, but boasts another five “next generations”. It has become a cohesive and unifying force that helps guide the family in their business decisions. Ma believes that the secret of the Forum’s success rests on three factors: clarity, consistency, and constancy.

Clarity is what the family name stands for, consistency is about the actions the family members take, and constancy relates to the time everyone takes to do things. Ma equates it to branding, noting that the process is very similar to building brand credibility. It’s about agreeing on the same values, and ensuring that everyone acts the same way.

Establish a family forum

“Before anyone starts a family office, it’s important to establish a Family Forum and get people to come together to talk to each other. If you don’t talk, you don’t communicate, and that means you can’t collaborate,” he says.

For the Ma family, defining and discussing what the family business does not stand for and cannot do is just as important as talking about a vision of what it can do. This is part of the process of creating those family values. As an example, he says his family agrees that business activities must do no harm to anyone, and must not negatively affect society.

The Ma family must strive to make a positive impact on society, he says. In terms of business, there is a key difference between results and impact, he says, and the family is focused on making an impact. Ma says that the five elements of impact can be defined as being specific, measurable, accountable, relevant, and timely. “It’s about how you impact your fellow man,” he says.

That has become the central tenet of the Ma family, and the needle in the family’s compass.

“We try to do things that benefit our customers and the public. If you apply this attitude to your community, the community will be more harmonious and the country will become more harmonious, too,” Ma explains.

To build a better society, the important thing is to start from the inside. This is a foundational value of the Ma family, and it continues to be a guiding principle for how they live their lives, build new businesses, and carry on the family legacy.

Ma does not expect his children to walk in his footsteps, and they have chartered their own courses in life. But they continue to live and breathe the Ma family values in all that they do, and this enables them to carry on the family legacy.

In 2012, Max Ma, along with his son and daughter, Theodore and Erica, launched a family-supported venture called CoCoon that offers entrepreneurship education and funding for early-stage entrepreneurs who have a unique vision. To this end, Ma proudly stands by his children as they continue to make positive impacts in Hong Kong’s business world today.