Kevin tan: The next generation successor

By Prof. Enrique Soriano

 

In an open forum organized by my consulting firm, W+B Family Business Group, I still recall hearing the moderator asking my co-resource speaker, Kevin Tan, CEO of public listed holding company Alliance Global Inc. (market leaders Emperador Distillers and Megaworld Corporation fall under) several compelling questions extracted from participants. His answers are worth sharing to family owned businesses that are in the process of transitioning from the founder generation to the sibling partnership stage. For brevity, I am highlighting three important questions in this article.

Q1: Having worked for close to 20 years in a family led organization like MEGAWORLD CORPORATION, what were the defining moments that you experienced under the mentorship of Professor Enrique Soriano and later from your father Dr. Andrew Tan?

ANSWER: “The first phase of Prof Soriano’s mentorship instilled in me the importance of embracing a Professional/Manager mindset as oppose 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 turnaround Eastwood City’s commercial unit which was only generating a measly P50 Million a year. And through the years, we have exponentially grew 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 advise 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.”

 

Q2: 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:

1. Full commitment
2. Must have the credentials
3. Must be deserving of the position
4. Must never be hired based on birthright alone
5. He or She 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 4 siblings, only 2 of us are working in the business.”

 

Q3: 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.”