Family Business Wisdom

As a first generation Chinese who grew up and educated in Indonesia, started my career with a Swiss company, mature in a British/French multinational company and end my professional career with a Japanese company, I keep on asking some basic question why people in Asia are more busy, work long hours compared the western world?

It boiled down to a different concept of life, the work hard concept from Asia and work smart concept from the West. But what actually shaped those society to thin and behave like that?

Recently, I found out a clue that it all trace back the origin of the ancestor of East and West.  As nowadays, scientific proof that all the human mankind were origin from the same mother from Africa. Apparently when they walked out from Africa, it divided into several group but majority can be classified into 2 group, the one who keep headed east end up finding a fertile land and settle down as farmer. While the group who headed North where the land is more tough, end up keep surviving with hunting.

Farmer Society

People settled down and started to work on the field, and they found out the pattern how to grow crops, in order to get a high yield they have to follow the condition that fit for the crop to grow, so they began expert in planning when to grow what and when to harvest. In order to protect what they were producing, they started to build up wall to surround the village to prevent the wild animal to destroy their field.

Basically with settling down, life is good, therefore women fertility was good, and number of population increase, which keep adding more labor to work on the field and produce yield. Since more people stayed together, social interaction became more intense, therefore, people had to behave according to the society norm. And the skill on weaving a network and building relationship is one of the key assets to getting rich!

The peak successful of a farmer society finally happened in China, where over the 5000 years, they survive and flourish and to keep protecting their assets they built up the great wall, so that everything inside the great wall will be protected and anything outside the wall, you were alone and under your own risk. with this situation the number of population keep growing, until it is so pack that finally, they started to run out of food. As a farmer society is based on collective, therefore anything that is outside the wall was deemed as RISK, dangerous.

China invented paper, pump and gun powder, but they did not develop it further to improve the productivity, as they have plenty of man power which were so skillful to perform any kind of job. As human being is the most creative and innovative work force, with the growth rate keep increasing, man power is easily available in the society, therefore all those technology inventions were not supported by the financial structure, as again, any technology was not flexible compared with human being skill.

Therefore art were more flourish and got the huge support from the king, hence the trend of the society it to acquire SKILL and the more complexity a person could perform, the more value he/she would be rewarded. While the concept of engineering where creating machine or system that simplify the complicated work would not perceived by the society as huge added value.

Since to acquire a SKILL, people needed talents and a long time (5 – 10 years) to master a certain skill, therefore the transfer of skill was through learning by doing and from word of mouth rather than by written text. Therefore the society is toward the praise of SCARCITY.

Even until to day the 21st century, those farmer society behavior is still dominated the thinking of Asia people would like to stay and pack together into a certain place, which creates a busy and pack metropolitan such as HongKong, Singapore, Shanghai, Beijing, Tokyo, Osaka.

Also you do no find any adventurer from the Asia, while getting out of the “wall” is considered as huge risk taking and the reward is not there. Hence Asian has more a Risk adverse approach compared to the Western.

The culture in Asia also does not encourage any risk taking as any wrong doing is deemed to sacrifice the whole group of people, even a “wrong” doing will get huge social punishment even up to commit suicide! Therefore the best behavior is to do according to the standard norm, with the more and more dense population in a city and country, where every body is doing the same, as uniqueness/difference is deemed as odd, dangerous and risk, therefore competition become fierce, and the easiest way to win and survive is to keep dropping the price.

Therefore the best way to preserve the value is to “prevent” competition through getting a special concession. Usually through tied up a good relationship with the authority and getting privilege, this lead to corruption and get monopoly or oligopoly for any commodity.

Keys to getting rich for a farmer society are: Land, Concession and Human Relationship

Hunter Society

The group of people who moved to the north, kept on hunting for their survival, in order to search for the food, which were mainly animals, they had to keep on moving from place to place, stay in cave, therefore, their life was always in a highly alert stage, hence the woman fertility was lower compared to the farmer society. Therefore man power is always a scarcity for a hunter society, this force them to innovate to keep building up better tools for hunting.

Technical expertise was valued and engineering flourished as it generated result even with less man power. And going out the cave which was the comfort zone is not a risk taking act, as reverse it was a potential gain and rewarding act, as staying within the cave would not have enough food to feed the people.

Therefore the hunter society which was, at that time represented by the  western society, had to on going innovation and any new idea which created new thing and tools would be cherished, because it brought a better and easier way for the people to get more result. The hunter society had no wall, as they did not need to protect, they would go as far as they could, therefore all of the adventure to discover new frontier were dominated by the western culture. They deemed any new uncharged territorial as new opportunity to gain new and more result, and since their population number was never big, they had to come out with a system that could leverage out and made thing easier for the rest to generate result! They became the master of systematization, chunk down complexity into the most simple action that was so easy that every person could carry out the process with a short period of training.

With this condition, no wonder, industrialization happened in the west, machines were highly valued and any innovation will get huge reward. Even until this 21st century, all new innovations which generate a huge add value to te humanity are still coming out form the western society. just to mention a few latest innovation from Microsoft, Apple computer to Google search engine. Scientific research into the unknown of mapping human genome, even “play with” stem cell to create human organ for the health improvement.

Therefore keys to getting rich in a hunter society are: Innovation for new tools and process, and company share , rather than land, concession and human relationship.

East meets West: a blend of farmer society with hunter society

At this 21st century, with the speed of information flow across continent  (pioneered by the hunter society/west), the world is becoming “flat” and “border less”. And any innovation which will be useful for the mass market, will be very quickly transfer to mass production in Asia, especially China, still with the huge population, they also had perfect the art for mass production. Patent right is always an issue, but the period of patent protection is become shorter and shorter (5 – 15 years only, start for the idea registered) and after the period expired, the fee to prolong the patent right is also a significant cost, therefore, new innovation, what can really be protected is through the product brand name, so you still can protect your trade mark, and any  the trademark infringement can be proceeded to the court.

Therefore the strategy of skim the market is no more valid, and most of the company, prepare all kind of innovation secretly, and when ready, they do a massive campaign and “flood” the market in a short period, so when the copy cat products are on the market, the margin will drop significantly, and the innovator has already moving a few step ahead with another new innovated product.

Future shift: work smartly hard with less human labor

A lot of government and school of taught  still  depend on utilizing  massive cheap labor to build up its society may not work in the future, as labor cost will always move up word, as living standard for a society will increase and a lot of routine work are and will always taken over by robots, therefore the concept of keep working hard and harder might not generate the result as expected. Just look at the car industry, practically, more and more robots are taking over unskilled labor, as robots provide consistent and flawless operation compare to human labor. And also the fact that most of the major city in Asia are facing the terrible traffic jam issue, therefore most of the workers have to travel at least 1 – 2 hour to reach their working place, then work long hours, until they are so physically and mentally tired, and can no more THINK and just carry out the routine work. So if the government is still using the concept of cheap labor and working hard and harder, their country will go no where and can never compete with those smart country, where people have more time to relax, think and work smart.

This should be the major challenge of all leaders how to combine the culture of a farmer and hunter and utilize the best of each culture to adopt and drive the society.