Husband-wife Business Partnership---The Couple’s Empire

When married couples become partners in business, their personal relationship can benefit their business. For some, however, it may threaten their marriage, and could even threaten the business if the marriage is dissolved. Chinese couples who have successfully co-founded businesses include LI Guoqing and Peggy YU, PAN Shiyi and ZHANG Xin, and YANG Lan and Bruno WU. Some, however, such as CAI Dabiao and his ex-wife, who were shareholders of Z-Kung Fu Restaurant, ended up divorcing and even becoming bitter enemies. When the marriage ends, personal issues may cause a severe loss to the business.
 
There are many advantages to husband-wife entrepreneurship. With shared goals and an established foundation for communication and compromise, husband-wife teams tend to be more nimble at idea generation, decision making, and business operation. The couple has an equal status and the same rights and obligations to one another, and share the ownership and decision-making authority over their corporate property, which aligns their interests. If they can learn from each other’s strengths, and leverage their complementary advantages, then their personal relationship can enhance their decision-making on business operations and strategic matters.
 
In such cases husband-wife entrepreneurship brings advantages such as low costs, effective coordination, and high efficiency. This is particularly valuable in the early days of business operation; a harmonious marital relationship and common goals create a good foundation for their effective cooperation.
 
When a husband and wife have grown together with their business, and built a unique “business partner + life partner” relationship that cannot be usurped by others, then husband-wife entrepreneurship is usually the most stable business partnership, and has a higher likelihood of success and stability compared to typical group or individual entrepreneurship, and it can create substantial family income.
 
Surveys show that a significant proportion of the companies listed on the ChiNext are husband-wife businesses. For example, Lepu Medical co-founded by PU Zhongjie and ZHANG Yuee, Narada Power Source co-founded by ZHOU Qingzhi and ZHAO Yilan, and Huayi Brothers co-founded by WANG Zhongjun and LIU Xiaomei.
 
There are, however, also some problems and challenges in husband-wife entrepreneurship. Since both husband and wife are focused on the business, losses can have a greater impact on their personal finances. Other issues include how to keep family-business balance, what to do if a spouse wants to exit the business, introducing non-family executives and cooperative governance practices, introduction and management of in-laws involved in the business, and how to manage the business in the event that the marriage is dissolved.
 
Finding a balance between business and family and work and life is one of the most important areas for entrepreneurial couples to navigate. The failure to do so may trigger tensions and turn the co-founded business into a flashpoint for family conflicts. When a couple has invested an enormous amount of time and effort into their business, they may neglect each other’s feelings, or forget the needs of other family members. If the start-up ends in failure or runs out of money it may deal a heavy blow to their relationship and family.
 
As for how to manage the business if the marriage is dissolved, the case of Longfor Properties provides valuable lessons. In 2012, China’s then richest couple (as ranked by Fortune), WU Yajun and her husband, got divorced. WU Yajun and CAI Kui held their respective equity shares in two separate trust companies when their company went public, and CAI Kui never held a position in the company, so their divorce had no influence on the business. By dividing their marital property well in advance of their divorce through a family trust, the wife protected herself from business losses in the aftermath of the divorce.
 
Examples of Husband-wife Entrepreneurship
 
Husband-wife entrepreneurship is a common type of business partnership with many advantages, and there are several types: Husband-dominant, Wife-dominant and Complementary. Here are some examples:
 
CHEN Dongsheng and LU Ang
 
Guardian Online CEO LU Ang and Taikang Life Insurance Chairman CHEN Dongsheng are a good example of a “husband-dominant” type of couple. According to LU, when they began their business, CHEN was the boss and she was an unpaid secretary. Of course, the two Wuhan University economics graduates often shared an understanding on operations and management and generated many creative ideas during their discussions which eventually led to the success of Guardian Auction.
 
PAN Shiyi and ZHANG Xin
 
PAN Shiyi and ZHANG Xin are an example of a complementary couple. PAN took charge of sales, promotion and governmental relations, while ZHANG was responsible for architectural design and capital markets. Thanks to their perfect match in business, SOHO China has become a leading company in China’s real estate industry and their SOHO projects are regarded as the benchmark for the industry.
 
WANG Xuehong and CHEN Wen-Chi
 
There are also examples of wife-dominant entrepreneur couples, such as WANG Xuehong and CHEN Wen-Chi who are in the IT industry. Known as “Super Lady”, WANG was not content with merely creating a successful business, VIA Technologies, which was managed by her husband. Since CHEN devoted himself entirely to VIA Technologies, WANG focused on looking for new opportunities, which eventually led to the great success of the mobile phone company HTC. Their success owes much to their clearly defined responsibilities, full collaboration, and effective separation of roles. It is often more difficult for, non-couple business partners to do this, as it involves dividing control of various resources like HR, funds and materials. Non-couple partners usually base their division of responsibilities on their general abilities or stock ownership instead of personal interests and preference.

Jack MA and ZHANG Ying
 
ZHANG Ying, wife of Jack MA, was one of Alibaba’s 18 co-founders. She has always been a stalwart supporter of MA. After eight years of working at Alibaba, ZHANG became a key member of its marketing team and joined the corporate management team as General Manager of the China Division, one of Alibaba’s two most important sources of revenue. ZHANG decided to leave the company in 2003 after it had successfully weathered several difficult business challenges. She believed that her exit was in the best interests of the company, which had recently brought in a number of professional managers from outside the company.
 
Never Forget the Beginner's Mind: WU Xiaokun and YANG Wanru
 
YANG Wanru is the daughter of YANG Yinglin, the owner of Jiabao Group known as “Preserved Fruit Magnate”.  She has led the family business for more than a decade, but does few media interviews and is therefore not very well known to the public. Her husband WU Xiaokun, who is even more low-key and pragmatic, been focused on promoting the family’s new brand “Qingran”.
 
The couple is co-managing a modern private company with diversified businesses in preserved fruits, pickles, fruit juice concentrate, printing, cosmetics, and health foods. Founder YANG Yinglin retired before reaching the age of 60, and passed the baton to his daughter who was not yet 30 years-old at the time of the succession. This succession became a legend in the industry.
 
“My father’s broad-minded vision has given us great courage to move forward,” said YANG Wanru. She regarded her father’s retirement as placing his trust in them, which became a driving force for their advancement. What’s more, her husband WU was determined to share the burden with her. “When we took over the family business, we considered it a responsibility, an obligation. You must do it well,” WU said when he recalled the succession.  
 
It is difficult to start a business, but even more difficult to keep one going. YANG Wanru was very glad that her husband was willing to work with her to maintain the family business. She believes the advantages of husband-wife partnership always outweigh the disadvantages. In addition, the support of her husband makes her feel secure and protected, and they spend a lot of time discussing business issues.
 
YANG Wanru believed that there must be a clear division of duties between husband and wife. “It’s not a matter of who will take control.” Specifically, the division between YANG and WU is based on their complementary abilities: YANG is in charge of production, WU is in charge of marketing; YANG is good at long-term business planning, WU at implementation.
 
As the saying goes, if a couple are of the same mind, their combined determination will overcome all obstacles. Time tells everything. The achievements made by YANG and WU are obvious to all. The couple have also made some important discoveries. “Initially, employees considered themselves as just workers with little motivation. Now they regard the business as their own and they are working for the team.” This change of attitude is based on the employees’ trust in the couple, particularly after they made some operational changes.
 
WU has begun to take more initiatives. He knows that the R&D is the lifeblood of a business, and he has been advocating that the 30-year-old family enterprise must find ways to innovate while maintaining its core advantages. After investigation and analysis, they focused on green plums and created the new brand “Qingran”, the first healthy green plum product in China.
 
WU hoped that the launch of the Qingran brand would ensure the sustainable growth of their family business. “Qingran is a unique brand, based on the operational philosophy of health and sustainability. We should never sacrifice our mission and values to commercial interests.” WU also noted that the health industry is an evergreen industry, as health is a universal concern.
 
WU has a strong sense of mission about his business. In ancient times, Chinese people knew how to process green plums, it was part of health culture which faded in China but has been well preserved in Japan and Korea. “We are responsible for reviving our healthy green plum industry.”
 
It has become imperative for the family business to innovate, upgrade its brands and find new sources of business growth. Keeping up to date on the market trends in the mobile Internet era, WU has adopted the O2O model by utilizing WeChat, an emerging social media platform popular in China, to leverage online/offline interactions and turn the users of Qingran products into its micro agents. Qingran’s “micro agency” marketing model was an overnight success.
 
WU and YANG are now leading their team on a second venture, which aims to build Jiabao into a brand that can last for over a century. In the fast-changing market, they believe that “quality is the lifeblood of business and the food industry must have a moral conscience”. These second-generation entrepreneurs believe that as long as they choose the right path, they will reach their goal.
 
Never Abandon, Never Give Up: GAO Zhenzhong and LI Jing
 
After a six-year courtship, GAO Zhenzhong and LI Jing finally got married. It was love at first sight, they considered each other an “emotional confidant” when they met by chance on a trip to Kunming in Yunnan Province.
 
It’s been reported that their parents were opposed to their relationship at first, and GAO Zhenzhong even stopped speaking to his parents for a time because of this. His parents thought that a long-distance relationship with a girl whose family they knew nothing about made no sense. They thought their son had options as long as he didn't get married. LI Jing’s parents didn’t expect a son-in-law from so far away and wanted their daughter to work in one of their family businesses, her father had a construction company and their mother ran a private school, and they threatened to disown her.
 
After they married, the couple joined Gao’s family business. GAO had no specific position in the company and began working in an entry-level position. As the eldest son of the family and a graduate of University of Ottawa, he was the second-generation successor. In his opinion, family heritage doesn’t simply involve physical assets, but also intangible ones. “GaoDeng Aluminum is named after my father. He asked us to keep in mind the motto: small victories are won through wisdom, while large victories rely on ethics. Since its inception in 1985, the success of GaoDeng has been based on its adherence to sincerity and ethical standards. While carrying on good traditions and maintaining the current business, we should also look for new business opportunities.”
 
LI Jing had also started at the bottom in Gao’s family business, beginning with customer service, then moving into sales and on to her current role in corporate strategy development. Every step was a challenge. She remembers well what her father-in-law said while giving her a tour of the company. “This is a place full of pressures. You should brace yourself for it.” She found it to be somewhat different from succession. She originally thought she would be just an assistant to her husband; instead she has become a strong force within the company. She could certainly choose to focus on her family and be a full-time housewife, but she likes to stay active. She believed that young people should be hard-working and able to balance career and family. “If you do nothing at the age when you should work hard, you’ll have to pay dearly for it later.”
 
The couple soon found that they became “perfect partners” in managing the business. LI was very outgoing and good at interpersonal communication, so she focused on operational details; GAO was a “big picture” person and precise in his work, so he took charge of planning and management. Their personalities and work styles were very complementary. Although the succession process was difficult, it was worth the struggle.
 
Over the years, the couple has proven their competence with outstanding performance – an annual business growth of 15-30%. Their export-oriented company has begun to pay more attention to the domestic market, and received a number of honors such as being named a famous brand of Guangdong Province, famous trademark of Guangdong Province, China renowned trademark, and national high-tech company. Now Gao’s father often speaks highly of his daughter-in-law in front of her parents and appreciates her contribution to his family and their business. The couple have also realized that qualified entrepreneurs should be socially responsible, so since taking over the business they have created a unique corporate culture. They pay close attention to environmental protection, public welfare and assisting students assistance in rural areas.
 
GAO believes that their sustainable husband-wife partnership is based on mutual understanding and trust, and that it is critical to identify “who is the successor and who is the core of the family business”. Though the husband and wife have different roles and responsibilities, they are working towards a shared goal for the business. “My wife hopes that I will become a successful successor, so she always supports and motivates me. We are both working towards the goals of building a century-old enterprise and outperforming in business, family and parenting. Neither of us worries about who is contributing more to each goal.”  
 
“Some of our friends live a more comfortable life than we do, but we don’t envy them. We are always preoccupied with our family and business.” GAO knows that the family business can be a good platform with plenty of room for future development, so there is no reason for him to want something unrealistic. “It’s enough to do one thing well.”
 
According to LI Jing, the joy of life comes from what we put into our life and what we create for the world, not from what we seek to get from it. The couple chose to maintain a sustainable family business, and in the words of GAO, persistence is the key to their dream of creating a century-old business.
 
Soul Mates: YAO Yao and ZHANG Lingli  
 
YAO Yao and ZHANG Lingli have just married. YAO is a simple, well-educated, and good-humored man and ZHANG is polite and elegant. They are a perfect match. According to YAO, what brought them together is their similar family circumstances, education and work experiences.
 
One is from Shanghai and the other from Chongqing. Both are successors in their respective family businesses. When they got together everyone wondered how they would manage their married life and their businesses.
 
Based in Shanghai, YAO’s family business is involved in metal materials processing in the traditional manufacturing industry. It’s become imperative for the company to transform its business, so when Yao joined his first role was to oversee its TS certification. Under his leadership, the company passed the TS16949 accreditation for automotive suppliers. This success allowed him to advance to lead the company in its move up the industry’s value chain.
 
YAO volunteered to take responsibility for business management and transformation. “I know that the company embodies the painstaking efforts of my parents and other veteran managers. What they passed on to me is the result of decades of their efforts. My mother said she would not compel me to take over the business, but it was impossible for me to refuse.”
 
ZHANG also worked hard for her Chongqing-based family business. “My parents created Weland. After getting married, I’ll continue working for the company. I think this is the way to express my love to my parents.” In fact, Weland had planned to build its marketing center in Shanghai, but the plan was never implemented. “So I can come to Shanghai to implement the plan.” She is determined to help manage the business, which has hundreds of employees.
 
“I live in the upper reaches of the Yangtze River, while you live in the lower ones. Every day I think of you, but I can’t see you, although we drink water of the same river.” This poem perfectly interprets the couple’s past circumstances. Now, however, it seems that they will live together and fight together for their businesses. People are looking forward to their outstanding performance as husband-wife business partners. After all, there are plenty of good examples for them to follow, such as PAN Shiyi and ZHANG Xin, and LI Guoqing and Peggy YU. Husband-wife partnership boasts the advantages of having the highest loyalty and cost-effectiveness. However, though some may think it is the most stable pattern of entrepreneurship, there are plenty of examples of failure, due to emotions, human nature, and other unpredictable factors. Everyone’s work can, to a degree, be affected by what is going on in their private life.
 
ZHANG was rather unsentimental in this regard. “I sincerely admire the couples who have happy families and successful businesses. But in China, there are many examples of couples who sacrifice their family life for their career, which leads to many regrets. Influenced by my parents, I lack the courage to attempt the husband-wife partnership.” YAO also frankly expressed that it was his obligation to earn money for the family and that his wife didn’t have to “help support the family”. “Lingli has her own ideas. I don’t want to make a career plan for her. On the other hand, though she is serious about her work, I don’t want her to work under high pressure.”
 
Nevertheless, the fact that they complement each other well is helpful to each in their respective business. YAO is talkative and persuasive and usually looks before he leaps; ZHANG is quiet and decisive, and has an effective manner.
 
What’s most important to them is their mutual understanding, respect and appreciation. They are two individuals from different worlds, and each should have their own respective, well-defined role in their life together. When one goes home after work, the other has the energy to help to refresh him/her. As ZHANG noted, “We married each other for our similar values and views on life. We are soul mates.”
 
 
 

 
Professor's Comments:
 
Going Beyond the Marital Relationship
 
Husband-wife partnership has long been an important type of partnership in Chinese family businesses. As couples with similar backgrounds and shared interests in the same living environment and under the same pressures, they have a high degree of consistency in their planning for the future. Driven by the same goals, couples with a solid emotional foundation can do well in business ventures and promoting the development of a family business. It’s also a valuable experience for couples to grow together with their business.
 
In the course of business development, partners are often faced with various management problems. For the “business + life” partners, it’s inevitable to bring affective factors into business management. Therefore, they should focus on the following three management problems: 
 
Conflict Management - Conflicts can be found in any business management, and managing them is an important part of running a family business. While family bonds can help ease contradictions and conflicts among family members other than couples, it’s very challenging for husband-wife partners to manage conflicts between them without affecting their feelings. In the start-up stage, it’s useful to have well-defined decision-making rules to avoid potential conflicts. Couples should have a clear division of roles and responsibilities, and communicate openly on important issues like decision making and goal setting. Of course, their roles and responsibilities can be adjusted continuously as the company grows. Nevertheless, once a consensus is reached, both should follow the decision making rules and avoid unnecessary disputes.
 
Role Management - In husband-wife entrepreneurship, couples play a dual role as both life and business partners. Hence it is critical to manage the role switching. Couples must have a clear understanding of their own roles and positions and be able to separate them effectively. When handling business and family affairs, they should keep in mind that they have different roles in different situations and times. If they bring the role of husband/wife into business management, it will have a negative influence on business development; if they bring the role of manager into their family life, it will erode family harmony. As is so often pointed out, don’t take your work mood home.
 
Emotion Management - Marriage is a special relationship of interdependency with love and affection. When becoming business partners, it’s inevitable that the dual role will affect the   emotional communications between the couple. Effective emotion management can help avoid conflicts, improve communication and enhance feelings of love and trust. For ordinary couples, they may be good listeners and help to ease each other’s work pressure; but for business couples with a dual role, they need to look for another outlet for their feelings. So entrepreneurial couples should be more tolerant of each other and have enough private space of their own. Only when their emotions are effectively managed and adjusted can they maintain a good balance between their life partner and business partner roles.
 
As Chinese family businesses grow and begin entering the succession phase, we will see more and more couples in the second-generation leadership role. For these couples, once they find an effective way to grow together, they will earn double the rewards for their business and marriage.   
 
Of course, there is a big problem facing husband-wife business partners, i.e., how to manage their respective families. Their relationship with the older generation is an important factor in  harmonious business and family relations. These couples must have shared goals in life, which motivates them to handle the challenges they encounter in business and from family. Interest distribution is another important issue. Some entrepreneurial couples can stand together through thick and thin, but will turn against each other in success. A rational mechanism for distribution can ensure the long-term development of the business and protect it from being hijacked by individual emotions or private interests. It is especially useful for a couple with many family members and complicated relationships, since it is enables the family enterprise to effectively separate corporate assets from family wealth.
 
In a word, husband-wife business partners should respect and support each other for mutual growth of their family and business. They must have shared values and goals in life, which will help make up the difference between individual and business requirements. Their communication style and level of tolerance are directly related to the story the couple writes in the business world. Couples who have much in common and strong teamwork skills, and who excel at different things, are bound to become winners in business and family life. 
 
(Comments by Jean Lee, Director of CEIBS Centre for Family Heritage, and Rachel Lu, Research Fellow at CEIBS)
 
Source: Fortune Generation, by Zhong Haiquan, Xu Shuping, An Jing, and Fang DA
 
 
 
译:Rosy