An Open Letter to the Family Business Stewards

By Prof. Enrique Soriano

As we embark on a new year with renewed vigor and an unwavering passion to overcome challenges, especially those overseeing their family enterprises, I am eager to offer guidance and insights as you step into your roles as custodians of the family business. This letter compiles strategic counsel from my two decades of research and experience assisting families in Asia especially during challenging transitions starting with the founder’s, sibling partnership stages all the way to the next generation phase of the family business.

A Steward’s Perspective: Think Beyond Ownership

To set the tone, let me share a powerful quote from second-generation leader Kevin Tan, the eldest son of one of Southeast Asia’s most esteemed industrialists, Dr. Andrew Tan. Kevin assumed the mantle of leadership in 2018 and now heads Alliance Global Inc., a publicly listed holding company with a 45,000-strong workforce within a diversified conglomerate spanning real estate, hospitality, gaming, liquor, fast food, and technology.

I encourage you to embrace Kevin Tan’s wisdom when he said: “Your parents, especially the founder, will never readily hand it to you. In my case, clashes with my father were inevitable, and I view it as a normal phase. Eventually, as founders recognize the merit of your contributions, they will step back. When they realize your capacity, expect trust, and empowerment to follow. It is my hope that the next generation can cultivate such a relationship with their founding parents.”

Kevin sums up his advice to those entering family businesses: ‘Develop a thick skin and relinquish expectations of any special treatment. I started from the bottom and worked my way up the corporate ladder. We should always remember that our last name is not a birthright!’

Adding to this wisdom, here are key considerations as you navigate the path ahead.

Embrace the Legacy of Grit: Your predecessors started with minimal resources but propelled themselves forward through sheer grit. Embrace the tenacity that fueled their journey and apply it to the challenges you encounter.

Innovation Grounded in Experience: While innovating for the future, respect the foundational experiences that shaped the business. Combine fresh perspectives with the wisdom gained from the struggles of the early years.

Clear Communication, Rooted in Reality: Effective communication is paramount. Be transparent about the business’s history, acknowledging both successes and challenges. This honesty will foster a grounded understanding among family members and stakeholders.

Learning from the Struggles: While you may not encounter the same level of adversity your parents faced, their struggles were valuable lessons in resilience and adaptability. Take the opportunity to learn from these experiences, recognizing that challenges present avenues for growth.

Recognize Where the Family Business Started 

In your family business roles, acknowledge the extraordinary legacy you’ve inherited. Your founders embarked on their entrepreneurial journey with nothing but the shirts on their backs, whether through a modest inheritance, separation from a parent company, or a loan from family and friends post-corporate life. What binds these narratives is the unwavering grit and tenacity they displayed, underscoring that success emerged from determination and resilience.

The initial years were defined by an unyielding struggle for survival. Emerging from these challenges, they transformed adversity into the success that shapes your family business today. As stewards, navigate this journey with humility and resilience, recognizing the imperative for adaptation and fortitude.

You are about to Step into a Big Shoe

Remember, you are not merely owners; you are stewards entrusted with preserving and advancing a legacy. Your journey involves understanding the sacrifices, embracing challenges, and demonstrating the same grit that propelled your family business from humble beginnings to its current success.

May your path be marked by thoughtful stewardship, innovation, and a commitment to sustaining and building upon the legacy entrusted to you. Here’s to a year of purposeful leadership and continued success in the rich tradition of your family enterprise.

Sincerely,

Prof Enrique Soriano

 

Want to learn more?

On February 3, 2024 (Saturday), in a W+B webinar, we’ll feature accomplished family business successors Jose Franco Soberano and Sam Christopher Lim, Eng Bee Tin’s Gerie “Mr. Ube” Chua, and family legacy coach and advisor Steve Legler from TSI Heritage in Canada, along with myself, to jumpstart the year for every family business.

Secure your spot now and explore strategies to align core values with growth objectives in family businesses. Reserve your seat today through Pat at rplatorre@wbadvisoryasia.com.