Digital disruption and workforce management are challenges at the forefront of billionaire families' minds, requiring tycoons' successors to turn their skills towards administrative upheaval.
On Thursday, Bangkok Post Plc held Forbes Thailand Forum 2019, "The Next Tycoons", attended by billionaires and influential business people.
Piti Bhirombhakdi, director of Boon Rawd Brewery Group, said every business has to survive in the wake of global changes and they should be flexible enough to handle the changes.
"The business cycle is moving to adopting digital things and new technologies, so digital disruption is an unavoidable threat," he said. "Instead of fearing it, we should adjust to handle the future situation because disruption has positive and negative aspects."
Mr Piti said disruption could destroy businesses in which entrepreneurs are not ready for adjustment, but disruption can also create new business landscapes.
"We have to take advantage of digital changes," he said, "so key issues include seeking new opportunities for family businesses, without reluctance to adopt new technologies and innovations."
Mr Piti said the workforce is crucial for investment and development, while entrepreneurs should provide the best technologies for work and training programmes for employees.
"The greatest difficulty for tycoons' offspring are the changes in organisational culture and adapting to modern methods," he said.
Chalermchai Mahagitsiri, chief executive of Thoresen Thai Agencies (TTA), said the company plans to adopt innovations and technologies in order to increase efficiency in TTA's management and operation.
"We have to be ready to adopt digital things and take advantage of changes," he said. "In my opinion, the company's workforce is more important for development than technology, so we cannot improve one thing and leave the other thing. The two main pillars have to be developed together."
He said TTA plans to be an accelerator and incubator for new startups and intends to adopt robotics and artificial intelligence.
"We will not leave our acquisition plans in order to push TTA into a growth leap," said Mr Chalermchai, who is a second-generation member of the Mahagitsiri family.
SUCCESSION PLANS URGED
Family-owned businesses in Thailand still lack succession plans for heirs to continue business operations, with formulating the right mindset and building family communications recommended as remedies, experts say.
According to the Family Business Survey of 409 Bangkok Bank customers, 72% of business owners will pass on operations to their heirs when they are ready, while 17% indicate that they will make the transition when they are retired or have completely stopped working, said Kitipong Urapeepatanapong, chairman of Baker & McKenzie's Bangkok office.
Only 7% have yet to think about passing the business to their heirs and 4% say they will continue to manage the business until death, Mr Kitipong said.
The survey had three main questions associated with the timing of passing businesses to heirs, willingness to write wills for heirs and reasons for not making wills.
A mere 7% said they have made wills for heirs, 56% have thought of writing their wills, 35% still do not think wills should be made at this time, and 2% are not willing to write wills, preferring to let the legal process play out after their deaths.
The majority of cases involving family matters involve disagreements over the establishment of a trustee, therefore planning a business succession plan is crucial, Mr Kitipong said.
Sathit Pongtanya, first senior vice-president of Siam Commercial Bank, said preparations for business succession plans essentially involve family institution preparation and structural preparation.
Communication is key to preparing the foundations of family institutions, Mr Sathit said, noting that good communication enhances success in family business ventures.
Challenges for the second- and third-generation heirs include building a skill set and creating the right mindset, said Arinya Talerngsri, chief capability officer and managing director of SEAC.
"Generation X business owners do not have to follow the path of the previous generation, but should look into soft skills such as those undertaken by [the owners of] Google and Facebook," Mrs Arinya said.