You can’t manage people by being a dictator.
They’ll walk away.
So you’ve got to try and motivate people by everyone sharing the vision.
You don’t want to come in and everybody leaves.
You want to retain that knowledge
then you layer new expertise – new skills – on top of that,
in order to build the scale of the business.
That’s how the business was able to expand.
Richard Eu is group chairman of Eu Yan Sang International,
a healthcare company that focuses on Traditional Chinese Medicine (TCM).
It was founded in 1879 by​ his​ great-grandfather, Eu Kong.
Eu Kong’s son, Eu Tong Sen, took over and built a business empire which included tin, rubber and banking.
He had 13 sons and 11 daughters by many wives and lived in a grand mansion called Eu Villa.
Eu Tong Sen Street in Chinatown is named after him.
​​Eu Tong Sen’s children took over, but over the years, the business empire crumbled.
In 1989, Mr Richard Eu – the fourth generation – joined the company after a career outside.
I’m Sumiko Tan, executive editor of The Straits Times.
I’m meeting Mr Eu at Basque Kitchen By Aitor at the Fullerton Waterboat House.
Over a delicious meal, he shares how he rebuilt the business to make Eu Yan Sang one of Asia's largest TCM groups.
Mr Eu, you had your own career before you joined the family firm.
What was the reason behind it?
My uncle was the executive director.
So he was retiring at the age of 70 and there was no succession in place.
My father was probably the single largest shareholder
among the family – although we only had about 10 per cent.
And so I felt that there was a possibility for us to enhance the value
of our shareholding, by contributing and so on,
and also to help perpetuate the company.
At the time, it was a very small company
and it could have gone any way. It could have gone bust.
So I thought it was an opportunity.
I could use whatever I had learnt
in my former life to try and grow the company.
So when you went to Eu Yan Sang,
did you have a vision for what you wanted it to be?
I wanted Eu Yan Sang to try to fulfill its mission.
Yan Sang is not anyone’s name
It was my great-grandfather’s mission for the business, which was to help people.
So we translated it into English as “caring for mankind”.
“Ren sheng”.
And it’s relevant for our business.
What could we do to help people
in terms of their health needs?
It’s a great segment to be in.
People always want to stay healthy.
We try and find the authentic way to keep people healthy.
So when you started, did you have an idea that
by the end of the year, you would open ten more outlets?
No.
The first question I asked when I joined...
I had a very small management team at that time,
there were about five of us.
So I asked the question: “What business are we really in?”
“What is our business model?”
So we started from there and decided that
going retail would be the way to do it.
At least the one thing we knew
was to serve a customer inside a store.
And the brand became much more modern.
How was that achieved?
I guess you could attribute it to my being very Westernised.
I could understand how a lot of Western brands were doing this
and I copied them, basically.
My model when we started opening stores was The Body Shop.
How they positioned The Body Shop as a monolithic brand –
where the store, the store front, the products and everything else were all the same brand –
that was my vision for Eu Yan Sang.
What was the biggest challenge you faced?
I suppose the overall, externally, would be regulatory issues.
Because it’s not easy to register all the products and formulate
in such a way that meets local regulatory requirements.
The expectation would be: “Is it hard to change a traditional business overnight?”
Actually, I found that it was not that difficult
once the people in the company were convinced that you’re doing the right thing.
So by small steps,
by showing that doing small things you can gain small success
then you will win over the hearts and minds of the people in the company
because the knowledge is there.
You can’t manage people by being a dictator.
They’ll walk away.
So you’ve got to try and motivate people by everyone sharing the vision.
You don’t want to come in and everybody leaves,
You want to retain that knowledge,
then you layer new expertise, new skills on top of that
in order to build the scale of the business.
That’s how the business was able to expand.
So the TCM clinics were not there when you started.
No, I started it.
How did that start?
My uncles were reluctant to open clinics because they felt that
there will be liabilities if anything goes wrong.
But that’s risk management, right?
There are many clinics all over the place being run very well and successfully.
Why can’t we do it too?
Just make sure that the processes are in place,
so we run our clinics modelled on any Western clinic.
The main concern is making sure that the practitioners, the physicians that we have,
are of the right standard to meet our company’s expectations.
The history of your company has a lot of family elements to it.
Has that been very difficult?
It was difficult only at the very beginning,
but once we started to do the buy-outs
and we were able to stand on our own without the interference from family shareholders,
I think from that point, it was okay. No problems.
I’m sure you get this question a lot. It is about the third generation curse and
you are actually fourth generation
and there are even fifth generation Eu’s in the company now.
Do you like to comment on that?
The issue here is about
why businesses break up because of the family dynamics.
I try to take that away by institutionalising this business.
So Eu Yan Sang, as a company, is not a rice bowl for the family,
but the family should be regarded more as a business family rather than a family business.
We’ve been in business for a long time – several generations.
Have we learned anything?
Is there something else we can apply?
My grandfather had a massive portfolio of businesses.
It happened that this is the only one that’s left.
And that was, in a way, the result of a third generation curse.
It was the third generation that basically lost most of those businesses.
Luckily, in my generation, we’re able to preserve one part of it.
And so, going forward, as a family,
what do we do to try and keep our family going
and also preserve this business as a business on its own?
Do you look back with regret on how it was a bigger business empire in your grandfather’s days?
Frustration rather than regret.
If my father’s generation was able to work together as a cohesive unit
or even going further back, could my grandfather have structured
his business empire in such a way
that different members of the family could run different parts of it?
I think things may have been different.
But back then, there was no drive
to try and structure it in such a way.
How much does it matter to you that there are fifth generation Eu’s?
As long as we are shareholders in the business,
whether we work in the business or not,
we have to learn how to be good shareholders.
That’s what we need to teach them, right?
We don’t know what will happen in the future,
whether we continue to be shareholders or not.
I can’t foresee what will happen.
But I think we have to learn from this particular journey
and then maybe create our own “equivalent” of Eu Yan Sang.
What’s your favourite Eu Yan Sang product?
Cordyceps.
You take a lot of that?
Yeah.
And that makes you...
It’s anti-aging.
You do look young.
Thanks.
If one’s to recommend one herb, that will be it.
How often and how do you take it?
It’s in capsules.
I take two every day.
In the morning?
Yeah.
Among 16 other herbs.
Okay, thanks for the tip.
Thank you very much for having lunch.
Thank you very much.