Are busi­ness own­ers do­ing it right? (part 2)

Panay News - - LOCALE -

IPREPARED a list of ad­di­tional nag­ging ques­tions be­low. Please go through it and if you an­swered “NO” to just a hand­ful of the ques­tions above, sadly your fam­ily and the busi­ness may be headed to a bruis­ing con­flict.

Do you think your chil­dren are ded­i­cated in pur­su­ing busi­ness con­ti­nu­ity?

Are your chil­dren qual­i­fied to as­sume lead­er­ship roles?

Do you have rules for in- law par­tic­i­pa­tion?

Have you al­ready iden­ti­fied a suc­ces­sor?

Do you have a suc­ces­sion plan in place?

Do you hon­estly be­lieve your el­dest child is the most qual­i­fied?

Are your chil­dren en­ti­tled? Were there rules when they joined the busi­ness?

Did you re­quire them to work out­side the fam­ily busi­ness be­fore join­ing?

Are you com­pen­sat­ing your chil­dren com­men­su­rate to their skills and an­nual per­for­mance?

Do HR poli­cies cover fam­ily mem­bers? Does your HR man­ager have the power to dis­ci­pline fam­ily mem­bers?

Are the cousins united? Do they value longevity or their in­ter­est is on own­er­ship?

In your ab­sence, do you think your chil­dren and their cousins will get along? Have you es­tab­lished cri­te­ria for fam­ily mem­bers owning shares? For sell­ing shares? As­sign­ing shares? En­cum­ber­ing shares? Sell­ing to sib­lings or other branches?

If you sense the un­der­cur­rents and ten­sions build­ing amongst fam­ily mem­bers now, it is wise not to dis­re­gard them. As their leader, do your fam­ily a big fa­vor, fix the prob­lem. If you can­not fix it, find some­one who has the com­pe­tence, ex­pe­ri­ence and ob­jec­tiv­ity to help.

Let me take this op­por­tu­nity to say that this ex­tremely sen­si­tive sub­ject will be high­lighted and dis­cussed in my one day work­shop in Makati on Satur­day, June 17 at the Tower Club.

The sim­mer­ing ten­sions are tell­tale signs of a “baby ele­phant in the room”. Ignore these is­sues and the fam­ily and busi­ness will suf­fer. You might think that these is­sues will heal over time. It will not. As a mat­ter of fact, the con­flict will man­i­fest in many forms and through time, im­plodes as you start los­ing your grip of the busi­ness due to ad­vanc­ing age or when you are no longer around to make im­por­tant de­ci­sions.

It is ob­vi­ously clear that these prob­lems sur­faced many years ago and you brushed them aside. These prob­lems re­late to en­ti­tle­ment, sib­ling ri­valry, gen­er­a­tional con­flict, con­flict­ing in­ter­est, in law and cousin par­tic­i­pa­tion.

When you pro­cras­ti­nate, the prob­lems are mag­ni­fied, emo­tions takes cen­ter stage, en­tropy per­vades and bat­tle lines are drawn.

At this junc­ture, le­gal in­ter­ven­tionE­mo­tion and as­sumes en­ti­tle­mena more ac­tive role and my ca­pac­ity and in­flu­ence as a fam­ily busi­ness coach di­min­ishes. As fam­ily busi­ness ad­vi­sor, our gov­er­nance in­ter­ven­tion is more ef­fec­tive if lawyers are kept out of the con­flict.

Im­me­di­ately right af­ter help­lessly watch­ing his chil­dren bit­terly fought for own­er­ship and con­trol of the busi­ness he started 50 years ago, a client con­fided to me:

“Prof, I failed as a par­ent. How I wished I were poor again. I never ex­pected that the wealth I cre­ated has cause so much pain and mis­ery amongst my chil­dren…we used to live simple lives but things have changed, all be­cause of greed and pride!”

If I has­ten to add, emo­tion and en­ti­tle­ment re­mained as ag­gra­vat­ing cir­cum­stances to any con­flict.

With no poli­cies in place, it will be over­whelm­ingly tough for the fam­ily to move for­ward in one di­rec­tion.

I can go on and on with more nag­ging ques­tions but inar­guably, it will still re­flect on the most fun­da­men­tal ques­tion for fam­ily busi­ness owner.

“Are you do­ing it right? If you think you are not do­ing enough to en­sure your legacy, do you plan to ur­gently do some­thing to cre­ate har­mony amongst fam­ily mem­bers?”

It is not too late though. There is still time to do some­thing right but you must start the process now! ( com/ PN) eso­ri­ano@won­gad­vi­sory.

Prof. So­ri­ano is an Agora Awardee for Mar­ket­ing Ed­u­ca­tion, a Pro­fes­sor of Global Mar­ket­ing and Chair of the Mar­ket­ing Clus­ter of the Ate­neo Grad­u­ate School of Busi­ness. He is also an ASEAN Fam­ily Busi­ness Coach and re­cently fin­ished a book on Fam­ily...

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