Soriano: Your legacy is on the line

·3 min read

Can family-owned enterprises embrace longevity as its enduring value? There is a saying that’s anathema to family-owned businesses around the world and this validates the regeneration of 90 percent of family-owned enterprises when it struggles to reach the third generation. For businesses operating in North America, it’s ‘shirtsleeves to shirtsleeves in three generations.’ In Mexico, it’s “father-merchant; son-playboy; grandson-beggar.” In Europe, notably in Spain, it’s padre noble, hijo rico, nieto pobre (father founder, son rich and grandson poor). In Germany, “the first generation creates, the second inherits, the third destroys,” and in Italy, it is “from the stable to the stars and back again.”

In Asia, especially in China, the saying “from peasant shoes to peasant shoes in three generations” holds true. It is so pervasive how the first generation toiled and created the wealth, the second lives off it and the third generation wastes it. For families at its worst, wealth disintegrates as early as the second generation. With all these gloom and doom talk questioning the stability of family firms, is creating companies that last forever really possible? The fundamental answer lies in having clear, purposive and well defined family values that unequivocally embraces change, harmony, trust, accountability, respect, strong work ethic and innovation. These values encapsulate the meaning of longevity and when executed properly, can become the bedrock for enduring family firms. But as firms pursue longevity, the real challenge is on how they can codify, design and bring to life a family centric governance structure that anticipates family, business, ownership and succession issues. As Willem Van Eeghen in an INSEAD interview explained, “Longevity is not a guarantee, it’s something that you really have to fight for and every generation has to do it.” The Van Eeghen Group is no stranger to change. Founded in 1662, the family firm started its life as a commodity trading company. By the end of the 19th century, the company changed its strategy and moved into niche food markets and has kept that approach up to the present day.

This coming Saturday on July 10, 2021at 10 a.m. Singapore Time, I will share the virtual stage with an esteemed colleague George Isaac. He is a global thought leader and the foremost expert in family succession. George’s grandfather founded the first Isaac family businesses in 1899 in Ohio, beginning a long history of serial entrepreneurship and the subsequent creation of several successful enterprises. A lot has changed since then, but the Isaac Group continues to thrive, now under board oversight and management by its third and fourth generation. George grew up as a child of family business owners and has run several Isaac multigenerational family businesses as a chief executive officer and board member. More recently, he founded GAI Capital Ltd., a family business consulting firm that helps family businesses grow, transition to the next generation, and last for multiple generations. Succession, transition and longevity planning, family training programs, business and family governance, wealth realization and transfer strategies, and managing complex family dynamics are just a few of the things George does to help family businesses thrive.

The highlight of the forum is the question and answer portion where the audience will exchange notes with George and myself acting as moderator. He will also walk us through the many strategies contained in his book, “Your Business, Your Family, Your Legacy,” an “Amazon #1 New Release” in four book categories as it provides a comprehensive guide to help families address the critical issues associated with multigenerational family businesses. The event, titled “Creating a Family Business Transition Plan” is very timely as it highlights a structured succession planning approach in two critical phases, family and business transition. Pursuing this model is a major step towards an enduring family enterprise that can guide business leaders to aspire for 100 years. You can still reserve a slot by calling Patricia of W+B Family Business Advisory at 0917-324-7216.

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