Kevin Tan: Family members must be deserving
During the open forum in the recently concluded W+B organized event held at Manila Marriott Hotel, I recall hearing the emcee asking my co-resource speaker, Kevin Tan, chief executive officer of publicly-listed holding company Alliance Global Inc. (AGI), several compelling questions extracted from participants.
I am highlighting three questions with Kevin’s answers:
Having worked for close to 20 years in a family-led organization like Megaworld Corp., what were the defining moments that you experienced under the mentorship of Professor Enrique Soriano, and later from your father, Dr. Andrew Tan?
The first phase of Prof. Soriano’s mentorship instilled in me the importance of embracing a professional/manager mindset as opposed to an owner mentality.
Holistically, I also learned from him operational best practices in the areas like sales, marketing, customer service, leadership and competitive strategies. You see, Megaworld was a late entrant in the mall development space, so we had to come up with powerful differentiating strategies to grab market share.
At that time (post-Asian financial crisis), my mandate was to turn around Eastwood City’s commercial unit, which was only generating a measly P50 million a year. And through the years, we have exponentially grown Megaworld’s recurring income stream. To date, we are averaging P15 billion EBITDA.
My biggest influence is, of course, my father. He was there as my beacon, providing me guidance and advice, especially in the areas of shared values, global strategy, vision for the future and frequently challenging my ideas without necessarily putting me down. But I have to clarify that I never reported to him. In fact, I reported to a board where I was toughened by seasoned and strategic-minded directors, mostly independent directors. What is your advice to visionaries when it comes to hiring family members?
Just like any professional, there must be entry and exit rules for family members interested to join the business. He or she must be deserving and should embody qualifications befitting a professional: a. Full commitment b. Must have the credentials c. Must be deserving of the position e. Must never be hired based on birthright alone f. Must have something to contribute to the company
When Prof. Soriano took me in, I started with a very low pay and worked my way up the corporate ladder. Despite my limited experience, I compensated it with hard work, as I knew from day one the consequences of not being able to perform. I strongly encourage business owners not to fall into the trap of making their children report to them. The emotions of being related by blood will eventually compromise the business. The best option is to make your children report to non-family executives. In fact, out of the four siblings, only two of us are working in the business.
Similar to your case, would you also recommend family members having mentors who are professionals?
Absolutely! There is no doubt that being mentored and trained by professionals is one of the key pillars that has brought me to where I am today. And if not for these executives’ tireless effort in helping my father through the years, the diversified businesses that we currently have in our portfolio would not have been where they are today.
Hiring talented professionals has been my father’s mantra ever since he started his liquor and property business more than 30 years ago. And until now, these professionals have stayed with us. We are extremely confident that we can continue to seize more opportunities as we prepare for the next growth cycle.