GM of Sheh Fung Screws Kent Chen Talks about Succession - Managing to Construct New Fastener Domain

Chen, born in 1977, spends over three hours per day to inspect its three factories located in Chiao-tou, Mi-tou and Yun-an if he has time. In his daily inspection, he chats with its employees about their work progress to understand the actual condition of these factories. He has worked in the company for 9 years, starting from an entry-level employee and working his way to the general manager; therefore, he has become very familiar with all the operations of the company, from the purchase of raw materials to the operations of the factories and marketing. In the past 9 years, he has been very eager to learn like a sponge while working in the company so as to learn all the operations and new knowledge.

“My family did not intentionally want to prepare me to be the successor of the company; my parents respected my choice and they were quite open-minded,” said Chen. After finishing his studies in Australia and back to Taiwan, he simply decided to start working for the company to contribute what he has learned. Therefore, he started from an entry-level position and dedicated himself to learning. During that period, the older-generation members of the management level supported his decisions and maintained an enlightened attitude. He explained, ”During that period, they supported my decisions as long as the decisions were beneficial for the company even though these decisions might not be well thought out; therefore, many of my decisions could be implemented.” After he assumed the position of General Manager, the older-generation members of the management level still exhibited an utmost level of respect for him, breaking away from the stereotypical problem of conflicts often found between a new successor and the older members of the management level of a company. This type of harmony between Chen and the older members is quite rare, especially in a big fastener firm like the company.

Customer First
Maintaining Competitive Advantages and Nurturing More Qualified Employees

The average monthly revenue of the company in 2011 reached NT$100 million. Its main products have been self-drilling screws and wood screws used for construction and 90% of its revenue is generated from the export to the US and Europe. The key reasons for the company to be an outstanding firm are its high degree of automation and high quality. The big company’s success came from the hard work of his father and his grandfather on his mother’s side. Chen has learned the importance of the company’s promises to its clients. He indicated, “Customers’ satisfaction is our top concern. I have seen such insistence from my father and the older members of the management level and I have always kept such insistence.” Such insistence has been the core value of the company.

From his father and the older members, Chen has learned that the number one goal of the company has to be the sustainable development of the company. Thus, the focus of the company has been on its products– how to meet the clients’ requirements and how to design the products that meet the satisfaction of the clients. As of now, Chen intends to take up and maintain the concepts, values and competitive advantages that have been passed down to him as well as to put more effort into the management of the company to reach the goal of sustainable development. “At present, our focuses are the adoption of an information system, marketing and the nurturing of skilled employees,” said Chen. 20 years ago, the company was the first one in the fastener industry to adopt the ERP system; however, it only used the ERP in the data integration in production. Recently, the SAP system of Germany has been adopted and is able to integrate all facets of the company’s operations – including accounting, sales, quality control and clients’ data, enabling its management to be more transparent and more systematic. The company will enter the 40th year of its establishment; like other older companies, the company is facing the problem of succession (i.e., the shortage of experienced workers due to the retirement of the employees of the older generation). “In terms of a smooth succession, the passage of experience from the older, retiring, and experienced employees to the new employees and the establishment of a relevant system are very important,” said Chen. Currently, this is a tough problem that the company has to face in the overall operations. In addition, to enhance the academic and professional aptitude of its employees, the company has worked in concert with a renowned university to provide Master Degree programs and provided subsidies and scholarships so as to motivate its employees to excel; these programs and motivating measures would be beneficial to the company as well. Moreover, the company has tried to recruit and hire more people skilled in different fields to bring newer, creative thinking and operation modes to the company so that the company may gain an omni-directional view.

Fulfilling Social Responsibility
Continuing Concept of “Laughter is Blessing; Charity and Wisdom Bring Good Fortune”

Lucky Du, the founder of the company and the grandfather of Chen on his mother’s side, often said, “Laughter is blessing; charity and wisdom bring good fortune.” Chen recollected, “my grandfather Du always wore a smile on his face no matter when he encountered the adversities in the preliminary stage shortly after the establishment of the company or when he had to overcome the hurdles in his declining years in which he had to fight with his illness. As the company has become more successful and lucrative, he always took care of our employees and gave something back to the society.” Though many firms and manufacturers have moved out of Taiwan, the company has decided to stay in Taiwan and has dedicated itself to the wellbeing of its employees. The company founded Sheh Fung Good Deed and Wisdom Charity Foundation to provide annual scholarships to the students from homes under the poverty line so as to enable them to continue their schooling, thus reflecting the company’s contributions to the society.

Such mentality of fulfilling its social responsibility passed down to him from his father and grandfather has a profound impact on Chen. This attitude and other business concepts passed down to him have been the driving force in his continuous upgrading of the company’s competitiveness. In addition, this management philosophy has taken deep roots in his heart.

Chen Suggests: A Successor Should Have Courage to Take up Responsibility and Make Decisions

As of now, many companies are facing the problem of the passage of a torch from an old owner to a new, young successor. Chen indicated, “The older owner should allow the new successor to make decisions; in addition, the young successor should learn all the basic skills and should have the courage to make decisions. The successor should also be brave enough to take up responsibility and admit his mistake when he makes one.” He added, “Such young successor should create more business opportunities and should not just follow the footsteps and old ideas of his predecessor. He should have the guts and courage to carry out innovations and reshaping of the enterprise so as to reach the goal of sustainable development.”

With regard to its future outlook, the company intends to develop fasteners made of stainless and other types of metals under the leadership of Chen by following the slogan of “quality assurance, stable price and punctual delivery”. Moreover, the company plans to enhance its production capacity from the current 1,300 to 1,500 tons per month to 2,000 tons per month and to increase the percentage of self-made components to create new heights for its business.