WE ALL have opinions and sometimes we hold very divergent views, as you would imagine when you bring together a group of people who are active within different industry spheres and in different geographical locations. That ability to see the industry from many different perspectives is actually a great advantage, because although you might believe in something very strongly, once it has been discussed around the table, you often start to see that there are many other things to be considered and sometimes, to your great surprise, you find that your views radically alter during the course of a single meeting! Same thing with columns. They are incredibly stimulating and they never fail to produce fresh ideas. This column on family business takes its bow and hopes to bring fresh ideas to the opinionated reader.
Asia is famous for its successful family business tycoons or patriarchs the likes of Li Ka Shing, Henry Sy, John Gokongwei, and others. Recently, the issue of family business ‘succession’ has received considerable attention from business schools and corporations all over the world. In the face of a seemingly family business ‘boom’ in Asia, the key question, however is: “What Makes Family Businesses Special”? And why would we want to answer such query? What is in it for entrepreneurs and business gurus?
As a professor and business consultant, I have asked this question a number of times. I have found many answers also in books and documents I have read and examined. Clearly, a major reason for answering this question is the very success of family businesses in Asia. We are very impressed by its results.
However, while the family business is a significant engine for the nation’s economic progress, we invest so little time in keeping it healthy. Somehow, we assume it will naturally stay strong with a unified vision for the future.
There are certain ideas or themes that kept popping out in terms of what makes family businesses special. Of course the ideas were expressed or said in different ways.
According to Webster, the term “special” is an adjective. As an adjective it can mean any of the following: distinguished, uncommon, designed for a purpose, peculiar to a person or thing (especially), individual, particular, specific, unique, exceptional, extraordinary, marked, appropriate or simply, an expression. Once we get the hang of any of the above adjectives, we can view the “special” in family businesses from that perspective.
The following are constant ideas or themes that emerge from my readings on what makes family businesses so ‘special’.
Family businesses are daunting. They are daunting because after decades of existence, they are at the moment of transition. To continue the family’s business and chart its direction in a period of transition is daunting for both founder and successor. As the torch of leadership is passed from father to son or daughter, the success story continues or ends.
Family businesses are challenging. They are challenging because they are now a global reality. To maintain global status for competing or networking with transnational corporations (TNCs) is challenging. Facilitating and strengthening the global connection is a high priority task for family business successors. But to respond more effectively to the founder’s vision is also a high priority task.
Founders and successors are hopeful in the sense that both see themselves as realists and optimists as well. They have had daunting and challenging tasks before. And rather than worry about achievements, they have accepted the fact that they could not do better than their best. Mapping the global market for family businesses is the next big thing for them.
The family business tycoons are dependent on their successors as the successors are dependent on the founders. Both need each other like empty vessels to continue the family business. As Lao Tzu puts it: “We shape clay into a pot, but it is the emptiness inside that holds whatever we want”.
Family businesses are distinguished as family owned. It’s a family affair. Control is done through the maxim: “A family business is the family’s business”.
The bone of contention in family businesses is the word ‘succession’. There is no choice outside the clan. That makes a family business unique and different from other forms of businesses.
Guess, who are the biggest beneficiaries of family businesses? The family members of course! That’s the designed purpose for family enterprises.
Business in Asia is extraordinarily a family affair. Translated, this means that the Asian economy is an extended family tree. ‘Blood relations’ is the basis of membership. Consanguinity is a defining quality in Asian family business or enterprise.
The basic purpose of the family as an institution is procreation or reproduction. The emergence of family businesses meant looking at the role of the family as part of the economic institutions. As producers, distributors and consumers of goods and services, the family is taking a lead role in social transformation.
Founders and heirs of family businesses honor each other with exceptional LOYALTY. This is a value that is cherished by both founders and successors.
My commitment to helping family businesses achieve breakthrough success is absolute. Drawing upon my unparalleled experience in working with family enterprises across virtually all industries and business functions and as an Ateneo professor, I educate my clients and students about the need to utilize a comprehensive and integrated approach for the benefit of their family business system.
In the succeeding issues, this column will differentiate itself by addressing not only the typical financial side of the family business triangle, but also the other aspects which deal with operational and/or interpersonal issues and the eventual need for succession planning. The significance of management succession in the family business is a popular topic that’s being widely discussed all over the world – indeed, a fact of corporate life whose time has come.
Let me end this article with a poem written by Len Emmet of Australia regarding family business.
FAMILY BUSINESS
son comes over again today
mulches and levels soil
prepares bed for strawberries
hopes to plant after toil
exchange usual banter
move on to serious stuff
says, ‘mum, doing my head in’
realize he’s had enough
start weeding path again
after a while he relents
“well what do you want?”
we come for an agreement
need to work out family matters
many things change this year
issues include travel plans
finances, change of career
arrange meeting with daughter
all go out, dinner for birthday
mid-February, good time to
discuss and pursue new ways
That’s it! Family matters are part of family businesses.
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Prof. Soriano is the Chairman of the Marketing Cluster of the Ateneo Graduate School of Business and Senior Consultant of Wong+Bernstein Business Advisory Group. For comments please email writer at [email protected]
