In recent years, as the age of China's first generation of entrepreneurs has increased, the "new generation" of entrepreneurs is entering an intensive succession period.
Judging from the new wealth data in 2018, the proportion of private entrepreneurs over the age of 50 in China is close to 70%. However, in terms of corporate succession, there has been a "double nine dilemma" - 90% of founders hope that their children will succeed, and 95% of their children are unwilling to take over. At present, how to solve the dilemma of inheritance has become a problem that many private entrepreneurs are worried about.
In this article, "Home New Wisdom Point" and the Huigu family invited Yu Yue, a new generation of entrepreneurs and chairman and president of Oriental Cambridge Education Group, to talk about their succession experience and experience in leading enterprises to break the situation in the face of changing market environment.
After 35 years of development, Oriental Cambridge has grown into a diversified education group covering higher education, vocational education, basic education and pre-school education. In terms of corporate heritage, Oriental Cambridge has successfully completed the handover from the founding generation in Songling to the new generation in Yue. We conducted in-depth interviews with Yue and hope to inspire you.
Dictation | Yu Yue
Written | "New Wisdom Point of Home Office"
01
The "Art" of Succession
As a new generation of entrepreneurs, I have been involved in business management for more than ten years, and I believe that now my father can safely hand over the business to me.
Since becoming the president of The Oriental Cambridge Education Group, my deepest experience is that the new generation of entrepreneurs need to realize that succession is not a one-time thing, and must be deeply involved in business operations.
Many new generation entrepreneurs will choose to fire or marginalize old employees after taking over. In my opinion, for private enterprises, the most important quality of employees is loyalty, and ability is secondary. If an employee lacks loyalty to the enterprise, even if the personal ability is strong, as a leader, he cannot be assured of appointment.
At this point, veteran employees have proved their loyalty to the company through time. In addition, after years of entrepreneurship, the old employees have successfully brought the enterprise into the inheritance stage, and to a certain extent, they have also proved their ability. Just in the face of the ever-changing market and environment, the new generation of entrepreneurs need to actively communicate with old employees and go with the flow.
However, for the "old ministers" who did not understand the business and stayed in the company by family relations, I chose to eliminate them. In my father's mind, these "old ministers" were very important. Therefore, if I want to eliminate these people, I first need the support of my father, and I need to make my father realize that these old ministers should also "retire", only in this way can I let them leave. Therefore, in this process, we have also experienced a game.
In the face of work, I am very rational, and even in the eyes of outsiders, I am a bit "six relatives do not recognize". In fact, if relatives are short of money, I can give them all, but I can't let them do anything wrong in the business. I kept asking myself inwardly, when they messed around in the company, did they ever care about family affection? If they don't care, why should I? Therefore, in the case of irreversible trends, for those who have caused serious impacts and infringements on the culture and interests of the company, I will certainly not talk about any conditions again, but will directly eliminate them.
Yu Yue and his father, Professor Yu Songling, at the Group's 35th anniversary celebration
In retrospect, in my succession, in addition to how to balance the relationship with the old employees, how to deal with the relationship with the father is also very important.
After I officially took over from Eastern Cambridge, my father formally retired, but out of respect, I will regularly report to him on the latest progress of the group, and I will also let the relevant person in charge ask him for some major decisions of the company.
As a child, I must take care of my grandfather's inner feelings after retirement, so that he can get a strong sense of participation in the development of the enterprise in another way. Moreover, listening more to the opinions of parents will also help enterprises to take fewer detours.
It should be pointed out that before I consult my father's decision-making opinion, I will definitely refine the plan so that I can predict that he will directly agree. But whenever there is a possibility that a matter will be denied by my father, I will not report it until the plan is more mature. Through ten years of running-in with my father, I now know exactly what should be said and said to my father at what point.
Before reaching this state of tacit understanding, we also experienced a period of relative "darkness" due to the difference in personality between me and my father. My father's behavior belongs to the style of wind and fire, and my personality is relatively rational and gentle. For example, when he is angry, he will train employees, but when employees can't stop crying, he in turn reassures employees not to cry. When I communicate with my employees in a slightly heavier tone, they know I'm angry and don't need to convey emotions by tapping the table.
When a new generation of entrepreneurs enter a business, they need to take the time to understand the other side of the genesis generation. Even the father, his state at home and his state at work are completely different.
China's founding generation has always wanted to pass on the family business to their children under the influence of traditional culture. In foreign countries, many entrepreneurs entrust their businesses to professional managers. From the perspective of mentality, as a new generation of entrepreneurs in the succession, no matter what position is explicitly given at home, we need to realize that the father is the founder of the enterprise, is the "boss", and the new generation of entrepreneurs must have a "professional mentality" in the process of succession.
In addition, the new generation of entrepreneurs should be grateful to their parents when inheriting the family business. I grew up watching my parents go to the sea to start a business, watching them go through a very hard struggle to get all this today, and I know that they are not easy. For the new generation of entrepreneurs, we need to recognize that it is not a matter of course for parents to give their children. It is important when the new generation of entrepreneurs can be grateful and filial to be able to take the lead in the face of intergenerational conflict.
The above are the insights and experiences I have gained after experiencing many twists and turns in the process of participating in the operation and succession of the group.
02
Inheritance and change
I grew up in the courtyard of the university and have always had a great interest in the education industry. I still remember that in the summer vacation after the end of the college entrance examination, I opened a bookstore in Harbin, with the "college entrance examination bully" as a signboard, many parents and students came to consult the college entrance examination related learning methods, and finally obtained a considerable income. Since then, I have also been invited to the campus to share the secrets of the college entrance examination for my students and students, and promote efficient learning methods to them in a purely public welfare way.
When I realized that I would take over the group in the future, I chose the Guanghua School of Management of Peking University to fill in the university volunteer, and then I studied organizational research at the University of Warwick in the United Kingdom, and after returning to China, I was admitted to Peking University for a doctorate in educational management.
After entering my career, I also had the opportunity to enter investment banking, but considering that I would have to manage the company in the future, I finally chose to learn the management methods of foreign companies at Siemens. The following year, I joined CITIC Capital and was exposed to many different industries through private equity investments. All these have provided me with very meaningful experience and reference for my subsequent work in the Group.
Yu Yue, Chairman and President of Oriental Cambridge Education Group
In 2006, I officially entered the Eastern Cambridge, but at that time I was eager to make some achievements on my own.
Based on the main line of business of Oriental Cambridge Education, my research found that in the preschool field, there has not yet been a national kindergarten well-known brand. From an investment point of view, the investment volume of the kindergarten is small and the replicability is very strong. Considering the combination of factors, I made up my mind to do the direction of kindergarten, and my ambition at that time was to make it the number one in the country, and we successfully achieved this goal six years later.
Looking back now, the most important thing that we can achieve such results is that our strategy is very clear: for example, in the rhythm of mergers and acquisitions, we are more than half a year earlier than our competitors. After we completed the acquisition, the opponent even went to acquire the target at 10 times the price, which is obviously not in line with commercial logic; in the choice of city and region, we also strictly control the check according to the market conditions, consider which cities should be entered, and avoid many detours.
Many of our executives in charge of this business at the time were not educated, and my parents questioned, "Your team doesn't know about education at all, how can you do this?" The team's cross-industry background has proven to be one of our strengths, and they have used their experience in other areas to innovatively solve many problems in the education industry.
I have observed that due to the good educational background of the new generation of entrepreneurs, it is often easy to be "self-righteous" after taking over. For example, the new generation of entrepreneurs completely rejected the original management model after taking over the enterprise and began a drastic change. In my opinion, the new generation of entrepreneurs is more about inheritance than innovation when they take over the business. If the new generation of entrepreneurs does not inherit good enterprises, innovation will not be able to talk about.
In this regard, my advice is that after the new generation of entrepreneurs enter the enterprise, they should learn with an open mind before they create value on their own, and they should not be too self-righteous. Many challenges in the process of business operation require a certain amount of social experience, and cannot be solved by theories or cleverness in books. For example, companies require managers to have deep social experience in how to deal with government-business relations, and young entrepreneurs of the new generation almost do not have this ability.
03
Break the game
For private educational institutions, the impact of the policy is very large. In 2018, the state introduced relevant policies for private kindergartens, which had a direct impact on the business of Oriental Cambridge. This year, many places have introduced relevant policies, and the proportion of students in private compulsory education schools will be controlled within 5%.
At present, the overall private primary school and junior high school account for about 10% to 20%, but in some cities and regions, the proportion of private schools is relatively high. This means that many private compulsory education schools need to consider the future direction. At the same time, many local governments basically do not approve private compulsory education schools, and the enrollment policies of existing private schools also need to clarify the relationship with public schools.
At present, many of the country's policies on private education are still being further clarified, and in the face of changes, we will first do these things:
In the compulsory education stage, in the face of the strict management of the policy, how to do a good job in the existing stock part, so that it can survive in accordance with the regulations, become 5% of the market is crucial.
In this regard, our thinking is very clear - even if individual schools can apply for profit, we still operate as a non-profit school, in strict compliance with national policies and regulations. At the same time, we do not intend to capitalize our own business, but only hope that these schools can achieve long-term stable development. From this dimension, how to improve the quality of teaching is our core work.
In terms of new business exploration, we have established a company specializing in digital transformation for the preschool field.
We have developed a set of curriculum system with "habit formation" as the core, and invested a lot of money to hire domestic and foreign experts to carry out related research and development. At present, this set of courses has been running into hundreds of kindergartens for several years and is constantly improving. We use this curriculum as a starting point to promote the digital transformation of the preschool education industry.
Every industry is talking about digital transformation now, and the same is true of the education industry. It is worth noting that the digitalization of the education industry involves a wide range of areas, such as operations management and how to use big data to improve teaching and learning efficiency. In my opinion, by capturing both the ends of the teacher and the family through digital courses, it is possible for the industry to slowly achieve digital transformation.
In terms of vocational education, we have set up a company to create a digital education platform that integrates talent training and supply of industry and education, so that vocational education and market demand can be more matched, and enterprises and schools can truly "understand each other". In this business, we are not targeting 985 and 211 universities, but the core is for applied undergraduate universities and vocational colleges.
We started the vocational education related planning because we saw the problems and market demands - the business scope of Oriental Cambridge covers universities, colleges, primary and secondary schools, etc., we are well aware of the problems existing in the job market of university education, and we are also relatively clear about the challenges faced by enterprises in terms of employment.
In the past few decades, schools have not understood the employment needs of enterprises, and enterprises have not understood the teaching system of schools. In the face of such a disconnect, the talents recruited by enterprises often cannot directly start working, and even need training for 3 months or even half a year before they can really take up their jobs, which is undoubtedly a huge cost for enterprises. For example, a Chinese software development company recruited 50,000 programmers in 2020, but eventually lost half of the personnel, and the annual recruitment cost was as high as hundreds of millions...
We are very close to the enterprise, and at the same time, we know the school better than the enterprise, and it is very smooth to build the school-enterprise platform. Therefore, we have certain advantages over the school-enterprise platform built by teams with only IT background. Starting from ourselves, if we can effectively help enterprises save the cost of employment, I believe that we can create high value.
My vision is that by building a digital platform for the integration of industry and education, it can serve all vocational colleges and universities in China, and contribute to the cultivation of vocational education talents and the labor market in China. If this business is successful, I think it will be more important than just starting a university.
At critical junctures, every decision a business makes matters. Now it proves that the kindergarten digital business and the industry-education integration platform that we have been brewing since a few years ago are the right choices, and we look forward to relying on the support of policies to further develop these two businesses in the future.
04
Innovation and original intention
I believe that in the future, Chinese education must be a people's livelihood industry that the state is highly concerned about. For Oriental Cambridge, I think it is a very meaningful thing to achieve one's own business while creating social value.
Affected by the epidemic, in the past two years, many families have liquidated or withdrawn their businesses and invested with a lot of money. In my opinion, the feelings of doing investment and doing business are completely different.
Since the development of Oriental Cambridge, we have not had much contact with the capital market, and its essence stems from the pursuit of education. If a company cannot do the most core things well, it will lack the "root" that can continue to develop. In the past ten years, I have been spending all my energy on education, rather than thinking about how to make money through investment, and doing a good job in education is our goal all the time.
I will not be the kind of person who has 100 million myself, borrowed 300 million for development, and finally lost all and had no hope of jumping off the building. I adhere to two principles in everything I do:
First, before doing something, you must consider whether you can withstand the worst results. If you can't bear it, then just give up;
Second, do your best. When I thought about these two points, a business invested 100 million yuan, tried hard, and even if I finally lost money, I recognized it. Do your best to obey your destiny. In the face of everything, if you have done your best, the result is not important, but there is no regret in your heart.
In life, I don't have any special hobbies, even a little "boring", and the only thing that I feel interesting about the holidays is to spend time with my children. Outside of work and family, my sense of accomplishment in life comes from being able to help others.
I also hope that in addition to operating every school and kindergarten, I can use the Group's experience and resources to create greater social value.
Therefore, in 2018, we donated to the basic education research center of Peking University, hoping to make a contribution to the improvement of the quality of basic education in the country. At the same time, the Group also signed a cooperation intention with the School of Education of Peking University and the Human Development Economics Research Center of the University of Chicago this year to carry out urban early childhood development research projects. The project will provide intervention and guidance on the parenting style of children aged 6-48 months from low-income families in cities, hoping to explore effective and cost-effective ways to provide evidence and policy recommendations for building a sound public service system for early childhood development in China, and promote the continuous new progress of "early childhood education".
As educators, we need to have a certain sense of mission. No matter what kind of technology we use, what kind of project we carry out, we are engaged in education.
Adhering to the original intention of education is the foundation for the creation, inheritance and development of Oriental Cambridge, and it is also the consensus of me and my father. We are on the same side in this general strategic direction, which is also the basis for the company to inherit and continue to develop.
(Reminder: The content and views are for reference only and do not constitute any investment advice.) ）