This is Not a Drill: Leadership Is Being Tested Now

By Prof. Enrique N. Soriano

Over the past few weeks, global markets have been jolted by renewed geopolitical tensions, volatile energy prices, and tightening capital conditions. What once appeared to be isolated disruptions are now converging into a more unstable operating environment. For business leaders, this is no longer a question of if uncertainty will intensify—but how prepared they are to respond when it does.

For family enterprises navigating generational transition, the stakes are significantly higher. Succession is rarely tested during stable years. It is tested when uncertainty arrives.

Many next-generation leaders today already occupy the CEO seat. Others remain in senior leadership roles while being groomed for eventual succession. In either case, the expectations placed upon them are rising quickly. The environment they are stepping into is fundamentally different from the one their founders navigated.

Previous generations often built their enterprises during periods of industrial expansion, rising globalization, and relatively predictable trade relationships. Economic cycles were challenging, but the overall direction of markets was broadly upward. Today’s successors inherit a far more complex and less forgiving landscape.

Supply chains are being reorganized along geopolitical lines. Capital markets are becoming more selective. Technological disruption is shortening competitive cycles and reshaping entire industries. Political decisions increasingly influence commercial outcomes. In this environment, operational competence alone is no longer sufficient.

The next generation must demonstrate something more difficult: strategic judgment under uncertainty.

Many successors today are capable managers. They understand internal operations, financial systems, and organizational processes. They know the business intimately. But turbulent environments demand a different leadership instinct—the ability to make consequential decisions before complete information becomes available. Waiting for perfect clarity often means acting too late.

Equally important is intellectual humility. One of the most common weaknesses observed in leadership transitions is the tendency of inexperienced leaders to project confidence they have not yet fully earned. Authority is sometimes mistaken for credibility. The strongest successors do the opposite. They invite challenge, seek independent perspectives, and surround themselves with capable executives who are willing to disagree.

Confidence that resists scrutiny quickly becomes fragility.

Next-generation leaders must also develop a far deeper relationship with risk. Founders who built their enterprises decades earlier often did so in environments shaped by economic crises, currency shocks, political instability, and capital scarcity. Those experiences forged instincts that cannot easily be taught in classrooms or boardrooms. They were developed through repeated exposure to adversity.

The next generation must actively cultivate similar instincts through scenario planning, disciplined preparation, and sustained engagement with markets and stakeholders. Leadership during uncertainty is not about appearing confident. It is about being prepared.

And preparation requires something many successors underestimate: discomfort.

This is the moment when founders will quietly observe the next generation more closely than ever before. Not because they doubt their successors, but because they understand the stakes. They built their enterprises through risk, sacrifice, and repeated exposure to adversity. Watching how the next generation navigates uncertainty will reveal whether those instincts have truly transferred.

Leadership credibility cannot be inherited. It is forged when uncertainty forces leaders to act before clarity arrives. And when that moment comes, the enterprise will quickly discover whether it has a successor—or merely an heir.

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3rd W+B Family Governance Masterclass 2026

The real test of a family business is not success today—but continuity tomorrow.

While many enterprises focus on growth, profit, and expansion, the deeper challenge lies in sustaining unity, stewardship, and leadership across generations. The question every founder must confront is not how successful the business is today, but whether it is prepared to endure long after the founding generation steps aside.

Professor Enrique M. Soriano will further explore next-generation leadership, governance discipline, and wealth preservation strategies for family enterprises in the 3rd W+B Family Governance Masterclass 2026, to be held on March 28, 2026, at 10:00 AM at Vivere Hotel, Alabang.

Seats are intentionally limited to ensure meaningful discussion and interaction, and only a few slots remain.