news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

On June 18 this year, Mao Zhongqun, Chairman and President of Fotile Group, and relevant responsible leaders lit up FotileStyle, Fotile Group's high-end customized smart home brand. It has been 28 years since he founded Fotile Group with his father Mao Lixiang in 1996.

This leading Chinese private kitchen appliance company will have revenue of 17.629 billion yuan in 2023, up 8.53% year-on-year. As a second-generation entrepreneur, Mao Zhongqun once proposed a 100 billion yuan vision for Fotile Group's future. From kitchen appliances to smart whole-house solutions, he is driving the company's expansion.

Mao Zhongqun inherited the business in the process of starting a business with his father Mao Lixiang. In Mao Lixiang's eyes, training his son Mao Zhongqun to take over the business was "leading for three years" from 1996 to 1998, "helping for three years" from 1999 to 2001, and "watching for three years" from 2002 to 2004. The handover was completed in 2004.

In 1996, Mao Lizhang and his son Mao Zhongqun founded the Fotile Group. Mao Zhongqun can be said to be "a student who surpasses his father". He not only persuaded his father to shift the group's main business from lighters to high-end kitchen appliances such as range hoods, but also created the Fotile culture that combines the excellent Chinese culture, promoted the implementation of the "three-in-one" of human character, corporate quality and product quality, and allowed the Fotile Group to reach a scale of 10 billion in 22 years.

As a father, Mao Lixiang has also been actively summarizing and promoting the experience of family business inheritance in the past 20 years. In August last year, Mao Lixiang, as the honorary chairman of Fotile Group, published a new book "Sixteen Theories on Inheritance" to further spread the secrets of inheritance.

Mao Lixiang believes that if China wants to be truly strong, it must create a large number of world-class century-old stores with a sense of home and country, which requires the cultivation of generations of outstanding successors. Inheritance is the common mission of two generations, and a three-year inheritance plan should be formulated to lead, help and observe for three years.

Facing the test of inheritance

In a speech last November, 82-year-old Mao Lixiang said that China has been reforming and opening up for 45 years, and almost everywhere in the world there are products made in China. However, the first generation of entrepreneurs are getting old, "the peak and crisis period of inheritance of Chinese private enterprises has arrived, and our entrepreneurs are facing a big test of inheritance."

He believes that the inheritance of Chinese private enterprises faces three major crises. The first is the crisis of the world's inheritance law. According to the world's law, the proportion of enterprises that are successfully inherited from the first generation to the second generation is only 30%. There are more than 40 million private enterprises in China. If 30 million of them are to be eliminated in the first round of inheritance, it would be a terrible thing. The revitalization of industry, the prosperity of the economy, the prosperity of the people, and the "world" that the first generation of entrepreneurs worked so hard to build will be greatly impacted.

The second biggest crisis is the ten major problems. Mao Lixiang said that in the process of studying inheritance, he found that there are ten major problems in inheritance, including pressure from public opinion, resistance from elders, family conflicts, fathers not handing over power, sons not willing to take over, sons not striving for success, differences between the two generations, only daughters, multiple children, and business decline. These ten major problems are like ten mountains pressing down on entrepreneurs, making it hard to breathe.

The third major crisis is a crisis of confidence. Some young entrepreneurs doubt whether there is still hope for private enterprises, real industries, and private entrepreneurs.

Facing these three crises, Mao Lixiang believes that confidence must be awakened, "private enterprises have great hope, real industries have great hope, and private entrepreneurs have great hope." If there are no private enterprises, no real industries, and no private entrepreneurs, is there still a future for China's economy? Inheritance is not only the top priority for entrepreneurs, but also a major concern of the whole society, because China's development cannot be separated from private enterprises.

Theory of "Three Treasures"

The successor is the seed of inheritance. Mao Lixiang used an analogy to say that for this seed to take root, sprout, bloom and bear fruit, it must have sunlight, rain, fertilizer, soil and temperature. For this seed to become a towering tree, it must have these five things.

The first is to establish a mission. The seeds of inheritance should be planted in the hearts of children from an early age. When his son and daughter were nine and ten years old, Mao Lixiang planted the seeds of "establishing the Mao Group in the future" in them, so they all "went into business" to help him when Mao Lixiang encountered the second and third crises of his entrepreneurship.

The second is to make a plan. From the time a child grows up to the time he or she actually takes over, a targeted plan needs to be made for them in stages.

The third is to hire a mentor. The guidance and coaching of an expert mentor is very important.

The fourth is to practice diligently. Especially when entering the stage of "leading for three years, helping for three years, and watching for three years", we must let the children stay a little longer, sink to the bottom, and produce results during the critical period of time, so as to improve themselves through tempering.

The fifth is to delegate power. Mao Lixiang’s mentality is “We (the older generation) can only let our children grow up quickly by handing over power at the same time”. In the first three years, he handed over the R&D rights to Mao Zhongqun, who led the team to develop a range hood that suits Chinese cooking habits. In the second three years, he handed over the marketing rights to Mao Zhongqun, who reformed the marketing system. In the third three years, he continued to hand over the management rights to Mao Zhongqun, who reformed the management system. After nine years of decentralization, Mao Zhongqun became a qualified successor.

Mao Lizhang has a "Three Treasures Theory". The so-called "Three Treasures" are to inherit the entrepreneurial spirit of "benevolence, wisdom and courage" of his father's generation, to inherit the core values ​​of the integration of personal character, corporate character and product character, and to inherit the ability of his father's generation to handle various complex social relationships.

He believes that entrepreneurs of his generation have been struggling in the tide of market economy for decades and have established their "empire" by relying on the "three treasures" - benevolence, wisdom and courage. Benevolence is the soul of the three treasures, including the soul of benevolence, the soul of virtue and the soul of kindness. Entrepreneurs win people's hearts with benevolence, and through their own efforts and dedication, they win the recognition, trust and reliance of customers, employees, partners and society, and then achieve success in their careers.

Wisdom is a highly intelligent strategy, and entrepreneurs conquer the world with wisdom. Decision-making ability, leadership ability, communication ability, adaptability, innovation ability, learning ability, interpersonal ability, tolerance, and public speaking ability are like nine swords. You must practice them every day until you are perfect, so that you can be invincible.

Courage is the "five courages" spirit, the entrepreneurial spirit of courage to fight, the foolish spirit of courage to sacrifice, the innovative spirit of courage to explore, the enterprising spirit of courage to climb, and the dedication spirit of courage to take responsibility. Entrepreneurs "achieve great success with courage." "These three souls, nine abilities, and five spirits are the 'benevolence, wisdom, and courage' of entrepreneurs." Mao Lixiang said.

Building a modern family business

The inheritance process has five stages: preparation, introduction, change, control, and sublimation. Mao Lixiang believes that the three years of change are a painful period, and there will be disagreements, contradictions, and resistance. Therefore, we must pass the "three hurdles" - the two-generation disagreement hurdle, the family conflict hurdle, and the elders' resistance hurdle.

"I have three prescriptions: eliminate differences, downplay family, and comfort the elders." Mao Lixiang said that the first prescription is to eliminate differences. It is normal for two generations to have differences due to differences in age, personality, education, experience, and qualifications. Differences will arise in issues such as employment, management, development, and new product development. If differences are handled well, it is a kind of progress. The second prescription is to downplay family. Enterprises must transform from a "traditional family system" to a "modern family system." The third prescription is to comfort the elders. The placement of the elders should be timely, appropriate, and harmonious.

Family businesses have the institutional advantages of clear property rights and flexible decision-making mechanisms, but they are also prone to some development problems, such as nepotism, complacency, family conflicts, patriarchal leadership, closed property rights, and weak social responsibility. Therefore, Mao Lixiang advocates transforming traditional family businesses into modern family businesses by establishing a modern family management model.

In Mao Lixiang's view, modern family businesses refer to family businesses with modern management, advanced culture and social responsibility. Such family businesses conform to the laws of the market economy in terms of system, can compete with companies such as Germany's hidden champions in terms of management, can integrate into the socialist value system with Chinese characteristics in terms of culture, and fully conform to the concept of enriching the people and strengthening the country in terms of responsibility.

After the transformation phase, the family business will enter the control phase. The control phase takes six years and is a testing period, often with problems of loss of control, crisis, and power withdrawal. The control phase must pass six levels: team building, system establishment, culture shaping, product development, market development, and brand establishment. Mao Lixiang prescribed six prescriptions: team building, system establishment, culture shaping, product development, market development, and brand establishment.

"First, form a team. The successor must form his own management team and change individual management to team management. Second, establish a system and change patriarchal management to institutionalized management. Third, shape the culture. Culture is the soul of the enterprise and the real core competitiveness of the enterprise. Use culture to unify thoughts, unite people, and inspire fighting spirit. Use culture to lead the system, management, and operations. Fourth, produce products, continuously develop new products, and lead the industry trend. Fifth, grasp the market, select the target market, and use comprehensive marketing to occupy the commanding heights of the market. Sixth, build a brand. Brand is the last trump card in the market competition in the 21st century, and brand is the banner of a century-old store." Mao Lixiang said.

The fifth stage is the sublimation stage, which usually takes eight to ten years, from a successor to an entrepreneur. Three problems should also be avoided at this stage: complacency, laxity, and impetuousness. It is necessary to pass the self-cultivation test, the comprehensive leap test, and the century-long planning test. Mao Lixiang has three more prescriptions. The first prescription is self-cultivation. Entrepreneurs must endure the pain, difficulties, pressure and challenges that ordinary people cannot bear. They must cultivate themselves to have a steel-like will, not afraid of danger, not defeated by difficulties, and not confused by temptation. The second prescription is the full leap, which requires an all-round leap in culture, R&D, management, brand, and performance. The third prescription is to plan for a century, including the planning of a "century-old enterprise" and a century-old family.

Awakening the entrepreneurial spirit

Since 2000, Mao Lixiang has been traveling around to give lectures, and founded the Family Business Evergreen School in 2006, which he has been teaching for nearly 20 years. The reporter of China Business News noticed that the "Fotile Culture Experience Camp" which will open on September 9 this year is the 41st session. During the four-day course, Mao Zhongqun will give a lecture on "Fotile Culture" and Mao Lixiang will also give a lecture on "Entrepreneurship and Inheritance" on the spot.

When asked recently why he attached so much importance to "inheritance education", Mao Lixiang said that more and more Chinese companies are facing inheritance issues. Since 2000, he has given lectures all over the country, visited more than 30 universities, and more than 20 provinces and cities. The first-generation entrepreneurs he met told him, "You are so lucky to have such excellent children. My children don't want to take over, and I am very painful." Many "second-generation" entrepreneurs also told him, "Your children are very lucky to have such an open-minded chairman. We have been general managers for 3, 5, or even 8 years, but our father is unwilling to hand over any power, and we are very painful."

"I have been thinking, what exactly is inheritance? Wealth or business? Mission or spirit? I believe that entrepreneurship comes first. With entrepreneurship, small wealth can become big wealth, and small business can become big business; without entrepreneurship, billions of assets will be reduced to zero." Therefore, Mao Lizxiang hopes to awaken both the common mission of the two generations and the "entrepreneurship spirit."

How can the successor inherit the "entrepreneurial spirit"? Mao Lixiang suggested that it should be tempered in practice and struggle, and face all kinds of challenges head-on and never back down; it should also be refined in learning, learning the entrepreneurial and innovative spirit, the spirit of struggle and dedication of the fathers. The fathers traveled thousands of miles, said thousands of words, tried every possible means, and endured thousands of hardships in entrepreneurship, and it should be well summarized and refined; in addition, it should be cultivated in the spiritual practice, and one must become an indomitable struggler who is not afraid of danger, difficulties, or temptations, and naturally develops an irresistible willpower in the heart.

In the past 20 years, in addition to education and training, Mao and his son also want to become the pioneers of inheritance research in Chinese private enterprises. Mao Lixiang found that the theoretical research on Chinese inheritance lags behind practice: China's local theoretical research started late, with few theoretical results and lack of systematic theory. "In the future, I hope to continue to explain my "Sixteen Theories of Inheritance" clearly, thoroughly and in detail. By throwing out bricks and mortars, I hope to awaken more experts, scholars and entrepreneurs to enrich the theory of Chinese inheritance together."