Soriano: ‘Someday this business will be yours’

I hate to spoil the festive holiday season, but I would like to pose a question to business owners if they are familiar with the title of this article? I’m sure they are and I will assume that they would always repeatedly express this phrase to their children. “I have built this business from nothing, I worked so hard and soon I will pass this business over to you...” The statement is not only overtly irresponsible but dangerous.

For owner-operators, it may sound like a harmless refrain from a father (or mother) to an offspring, but it is precisely this kind of narrative that has caused many conflicts resulting in damaged relationships among family members! I stand witness to many acrimonious parting of ways that eventually spills over to the courts.

Stop conditioning your children

As a founder you might ask why will an innocent statement create confusion? The simple answer is this: “Someday This Company Will Be Yours” mindset cultivates a sense of entitlement! When your children grow up believing that they will own the business no matter what they do or how they act, an entitlement mindset is conditioned at an early age. As it is deep-seated, the children will carry it to adulthood. And believe me, it can pose a challenge to make them appreciate a different perspective.

One good example hits close to home. One day, an 82-year-old neighbor, a good friend and founder of a business that employs more than 3,000 employees, called me up frantically asking for my intervention when his bum 59-year-old son demanded that his monthly allowance be sent to his condo unit pronto. A delay of two days triggered incessant calls from the son to the company’s payroll master demanding an explanation. He even shouted expletives to the hapless officer processing the family members’ pay.

I then asked if the son works in the family business and the father’s response was, “sometimes he works, but most of the time he does not. He plays golf more than logging in man hours in the company.” Despite that lack of commitment and accountability, the son still gets paid his huge monthly stipend. By the end of the year, the father added, “he is also expecting to receive profit sharing and dividend.”

When I grilled the father on how much his son receives on average, his reply was, “somewhere within the range of P2.8 million to P3 million (US$55,000 to US$60,000) a month! I pressed on, “by doing nothing?” “Yes, unfortunately, my children are so entitled, can you still do something about it? It’s not only him but his other offspring as well with the exception of two other siblings that are devoted to the business.” I can sense his tone as somewhat resigned to the fact that his children will never change. So, I curtly told him, “Well, it is clear as day that it is the parents’ fault. You and your wife created an entitled behavior out of your children. They have been hardwired to display this unacceptable behavior.”

Imagine, a guaranteed monthly pay of P3 million without doing actual work sans any accountability? Talk about entitlement at its worst! I then advised the founder that it is almost close to impossible to reform the adult children as they are nearing “retirement age.” But I can however initiate intervention on the two committed sons and the grandchildren as I see a glimmer of hope mentoring the third generation whose age ranges from 30 to 37.

Having a mindset of an “owner mentality” is a double-edged sword

Consultant Rick Johnson correctly stated that “an attitude of entitlement that is displayed openly can create major challenges for even the most successful family business. He further expounds that “these children often manage with an autocratic style with little empathy for employees and leaving the impression that they can do whatever they want because they will run the company someday.”