Soriano: ‘We have met the enemy and he is us’

·3 min read

In a typical family, love is always equated with fairness. For many founders placing more weight on being parents rather than business owners, fairness should naturally mean equal pay and equal shares regardless if one offspring is not working, lazy, entitled and a good for nothing adult child. Unfamiliar to a parent/owner, his or her act of recklessly and prematurely transferring ownership to an unqualified offspring is probably one of the biggest reasons why petty sibling conflicts can swiftly morph into entropy immediately after the founder’s death.

I have intervened in many senseless and hostile conflicts (pervasive in Asia) erupting out of nowhere because of the deplorable behavior of these callous founders and key business leaders. Indeed, their actions imperil not just the business side but ultimately scar family relationships forever.

To quote fourth generation leader Sammy Lee of the US$20 billion global leader Lee Kum Kee Group, “If the family council was in place, this would not have happened,” he says, referring to the past feuds where he fought with his father over the latter’s decision to sell a money-losing unit. “My relationship with my father was bad! I proposed selling the shares in the sauces business that I would be entitled to in exchange for keeping the health-products unit, but which would also mean I would get out of the family business. Which also meant my father would never speak to me.” Lee added: “The ownership was divided equally, but the family members did not trust each other. They did not have common goals. Many families have broken up because they could not find a consensus. We had two buyouts in the past. If we didn’t do anything, history would repeat. It’s a lesson that I haven’t seen many families learn.”

The unending drama among active operators vying for attention and recognition when the patriarch was still alive suddenly makes a dramatic change when the parent founder dies. In an instant, everyone is caught into the maelstrom of emotions coming from all sides of the family, business and ownership ecosystem. With the anchor and quarterback barely settling in his grave, the family business starts losing its hold on disgruntled family members. Akin to an aircraft without a captain and an able co-pilot, there is the risk of everyone pulling in different directions and of conflict within the family or even between the family and the business. Adding fuel to the fire are the constant assault from extended family members (in-laws, half siblings, uncles, aunts) and stinging accusations from passive family members longing for attention.

As the simmering conflict heads to a boil, these unhealthy, deep seated, emotional rivalries (some dating back during childhood) suddenly worsen into a ball of disagreements and the end game will be fireworks that will light the sky for generations. In this stage of entropy, the battle lines are drawn and family and business become blurred. Without outside intervention, this hostility is likely to develop into the most dangerous type of conflict: the countdown to self-destruction! This is the end stage where any relational connection will collapse from within due to money, power and factionalism (the next battlefront), effectively undermining everything related to the family and the business.

When you put all these issues together, there is really one culprit that creates most of the problems afflicting family-owning businesses today, and without a doubt, that is you, the legendary founder and great visionary. You are lamentably caught in a confused state not knowing where to draw the line as a parent and a business owner. In the immortal words of Pogo, from the comic strip, “We have met the enemy and he is us.”

No matter how well your intentions are as the business owner, in a real sense, you are your own worst enemy. Being aware of this harmful tendency is a good place to start.

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