Soriano: Family business stewardship is a lasting gift (Part 2)

Enrique Soriano
·3 min read

I remember Papa telling me after graduating from high school that “whatever you choose to do with your life, whatever pursuits you wish to achieve, we will always support you. If you find interest in the family business, you are more than welcome to join, but you have to be just like any other employee. Being family does not give you any entitlement. Always remember that respect is earned, not given. But one thing is clear, Mama and I have found it very rewarding to have our own business, but there is no substitute for hard work. The family business is one of your many options, and we will support and encourage you no matter what you decide.”

In 2005, at the age of 28, I decided to join, and it was one of the best decisions I have ever made. I believe my siblings feel the same way. Despite the pandemic, the business is still running and thriving today, with a workforce of more than 6,000. We want to credit our mother’s nurturing skills, our father’s leadership and mentoring skills, his operating principles in retaining great employees, his never-ending pursuit of transforming to a better culture, his leading by example, and his determination to create a legacy. Lastly, I often cite his advice: “Never ask anyone in the company to do anything you would not do.”

“Papa and Mama, all the values you taught me and my siblings have served us well. As a second-generation steward of the family business, I am aware of the responsibility that has been given to me. To our beloved father, your shoes are too huge to fill, but we are also conscious of the obligation to pass on our business to the next generation in a healthier condition than we inherited it.”

It was a wonderful and fitting tribute to the parents and their perseverance in holding up despite the many hurdles the family had to overcome along the road to this initial success. The father beamed with pride and was somehow relieved of the huge weight taken off his shoulders. He finally slayed the “elephant in the room!”

Owners favor the do-nothing option

Complex forces are at work in family companies, favoring the “do-nothing” option when it comes to transitioning to the next-generation set of leaders. These forces operate within the founder, the family and the business, and understanding them is the essential first step in successfully managing the transition process. “We are all mortals,” the father said as he formally announced his power-sharing plan to his senior executives broadcasted in all their offices. “For years, I struggled with the thought of holding on to power. I was healthy and I could not imagine my day without thinking of the business that I started through sheer hard work. But one thing kept me on track that to safeguard the continuity of the business, I should always regard succession as a precondition for stewardship. And that there will never be success without succession.”

“I still recall Professor Soriano, our governance and succession advisor, repeatedly asserting that succession is a journey that if I, as the leader, cannot embrace the process, the family business will not have stability. I must say that the first three years were tumultuous, but we needed it. Professor Soriano calls it an organized and gradual process that cannot be rushed as there are major transformative changes from decades of being informal to building a formal structure. But I call it a detox process, and with that, we are grateful for the experience.”

Owners should always think of the greater good over their desires. They should regard planning for stewardship as their principal contribution. They must make sure that succession takes place smoothly with less fanfare as possible. It is just unfortunate that despite the logic of this apparent natural transition, the “do-nothing” option is the one founders most frequently adopt. Perhaps it is the fear of losing power or maybe the fear of facing one’s mortality. Whatever it is, it just does not make sense.