【Trade Magazine】 The key to succession-Inheriting in the most effective way
2018/12/06
Use communication and influence for step by step transformation
The domestic software company, Persing, was founded in 1982 by Chen Daxiong. For over 30 years, it has seen technological changes such as the Internet, mobile and cloud computing, and has continuously upgraded and transformed. Pershing uses the energy of innovation and creativity to enter a new era.
Unity outweighs profit to make succession smoother
The technology industry is constantly evolving, and it must be upgraded and transformed every few years. At this time, Pershing’s chairman and the second-generation successor, Chen Qinxiang said bluntly that in the face of external operating pressure, the inertia of the current team’s energy helped him to succeed for a smooth handover transition.
Chen Qinxiang, always had a keen eye for business ever since his youth, and he has always longed for his own career in the future. When he was a student, he would go to Pershing to work and study during winter and summer vacations. During these early years, he became familiar with many of the top level managers in the company.
Chen Qinxiang formally entered Pershing as the vice chairman in 2013. He noted that most of the team members have a similar outlook on business philosophy, and there’s mutual understanding and respect within the organization. Additionally, there’s a certain sense of familiarity within the company, people speak the same lingo, and there’s not huge age differences. The divide between the “old guard” and the younger generation doesn’t really exist as an impediment within the company.
However, he admitted that Pershing has departed from the previous profit center system and switched to the “One Company” business model, which not only helped the internal team up their game for stronger external competition, but also helped his succession in the process. “In the past, the emphasis on profit centers was for healthy competition, but we want to focus on our mutual benefits and goals. After removing the profit center, the focus is more on collaboration, and the succession process proceeds more smoothly,” he said.
Breaking away from the operating framework of the profit center system, through communication and healthy competition, Pershing successfully streamlined the focus employees’ strengths and further enhanced the company’s growth.
During the transition period, the honorary chairman steps down for a peaceful transition
Without having to constrain himself to years of experience and old fashioned thinking, Chen Qinxiang still needs to overcome the challenge of bridging the gap with his father through communication and understanding. Faced with the contradiction that “the father is the boss, the boss is the father”, Chen Qinxiang often struggles with how to convince his father, especially when both sides try to influence the other, causing the inevitable friction. In order to avoid head-on conflict between father and son, and to make things go smoothly, Chen Qinxiang’s approach is to ask senior managers to coordinate.
Even his son officially took over on July 1st this year, Chen Daxiong, the honorary chairman, still goes to work every day. He is still concerned about the general direction of the board of directors and corporate governance. Out of principle he still involves himself with the company’s operations.
“Perhaps many people think that my father still has his hands on every deal and transaction, and it’s not a true succession. But I think that at this transitional stage, such an approach can give employees, shareholders, and directors peace of mind. People may also believe I am happy to see such a situation, and feel relieved only when the old chairman fully steps back.” On this point, Chen Qinxiang remained silent.
But he also feels that his father is now trying to let go. “The previous generation has stepped back and learned to retreat slowly and gracefully. Only then can the next generation have room to further grow. In this succession process, the most important thing is how to increase trust and reassurance in quality.”
In fact, a year before Chen Daxiong’s retirement, Pershing made a three-year plan to list the goals, missions and visions they wanted to achieve in 2020—providing high-value services, integrating innovative technologies, and effectively integrating IT ecosystems. They sought to become the most reliable and outstanding enterprise that can provide innovative value information services. “Seeing that we’re on course to reach these goals, the honorary chairman is more at ease, and the shareholders and the board of directors are also at ease.”
Although he rarely communicates directly with his father, Chen Qinxiang can still feel that his father is supporting him in his own way, including assisting him in establishing external relationships, and trying to get employees, directors, shareholders, and customers to support his succession. “Although my father doesn’t say anything, I can still feel that he is learning to let go. As he takes a step and operates more behind-the-scenes, I have more of a chance to take the stage and make my own path.”
As for many successors, the first thing they do when they take office is to change the corporate logo, or they chase bold reform. Chen Qinxiang laughed and said, “Successors want to innovate. It’s normal to want to change the logo.” Truth be told, Chen Qinxiang did have ambitions for drastic changes, but as he matures, many of his ideas change and mature as well. Having his hands on the wheel brings real responsibilities, and he must consider the pressure of reality, as well as future endurance and growth.
Chen Qinxiang said that in the past, his father was in the lead. No matter what he thought, he eventually respected his father’s decision, but after taking over, he aims to gradually develop himself and the company towards his own ideals. “I express my thoughts about the changes I want to make at meetings. At this stage, I still use communication to affect changes and opinion slowly over time.” During the transition period of succession, Chen Qinxiang chose to adjust gradually to allow the company to adapt to the right fit. This slow and steady pace has helped to smooth the transition.
Chen Daxiong (middle), the founder of Pershing, adopts a gradual handover of the company to his son Chen Qinxiang (2nd from right)
The above news is from Trade Magazine 2018.03 No.330
