[COLUMN] Your legacy is on the line

Photo by Scott Graham on Unsplash

Can family-owned enterprises embrace longevity as their enduring value? There is a saying that’s anathema to family-owned businesses around the world and this validates the degeneration of 90% of family-owned enterprises when it struggles to reach the third generation. For businesses operating in North America, it’s ‘shirtsleeves to shirtsleeves in three generations.’ In Mexico, it’s “father-merchant; son-playboy; grandson-beggar.” In Europe, notably in Spain, its padre noble, hijo rico, nieto pobre (father founder, son rich, and grandson poor). In Germany, “the first generation creates, the second inherits, the third destroys” and in Italy, “from the stable to the stars and back again.”

In Asia, especially in China, the saying “from peasant shoes to peasant shoes in three generations” holds true. It is so pervasive how the first generation toiled and created the wealth, the second lives off it and the third generation wastes it. For families at its worst, wealth disintegrates as early as the second generation. With all this gloom and doom talk questioning the stability of family firms, is creating companies that last forever really possible? The fundamental answer lies in having clear, purposive, and well-defined family values that unequivocally embrace change, harmony, trust, accountability, respect, strong work ethic, and innovation. These values encapsulate the meaning of longevity and when executed properly, can become the bedrock for enduring family firms. But as firms pursue longevity, the real challenge is on how they can codify, design, and bring to life a family-centric governance structure that anticipates family, business, ownership, and succession issues. As Willem Van Eeghen in an INSEAD interview explained, “longevity is not a guarantee, it’s something that you really have to fight for and every generation has to do it.” The Van Eeghen Group is no stranger to change. Founded in 1662, the family firm started its life as a commodity trading company. By the end of the 19th century, the company changed its strategy and moved into niche food markets and has kept that approach up to the present day.

This coming Saturday on July 10 at 10 a.m. Singapore Time, I will share the virtual stage with a colleague who is a global thought leader and the foremost expert in family succession, Mr. George Isaac. George’s grandfather founded the first of the Isaac’s family businesses in 1899 in Ohio, beginning a long history of serial entrepreneurship and the subsequent creation of several successful enterprises. A lot has changed since then, but the Isaac Group continues to thrive, now under board oversight and management by its third and fourth generation. George grew up as a child of family business owners and has run several Isaac multigenerational family businesses as a CEO and board member. More recently, he founded GAI Capital Ltd., a family business consulting firm that helps family businesses grow, transition to the next generation, and last for multiple generations. Succession, transition & longevity planning, family training programs, business and family governance, wealth realization & transfer strategies, and managing complex family dynamics are just a few of the things George does to help family businesses thrive.

The highlight of the forum is the question and answer portion where the audience will exchange notes with George and myself acting as moderator. He will also walk us through the many strategies contained in his book, “Your Business, Your Family, Your Legacy,” an “Amazon #1 New Release” in four book categories. His book provides a comprehensive guide to help families address the critical issues associated with multigenerational family businesses. The event, titled “Creating a Family Business Transition Plan” is very timely as it highlights a structured succession planning approach in two critical phases, family and business transition. Pursuing this model is a major step towards an enduring family enterprise that can guide business leaders to aspire for 100 years! You can still reserve a slot by calling Patricia of W+B Family Business Advisory at 0917 324 7216.

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The opinions, beliefs and viewpoints expressed by the author do not necessarily reflect the opinions, beliefs and viewpoints of the Asian Journal, its management, editorial board and staff.

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Professor Enrique Soriano is a book author, World Bank/IFC Governance Consultant, senior advisor of Post and Postwell Singapore and the executive director of Wong + Bernstein, a research and consulting firm in Asia that services family businesses and family foundations. He was formerly Chair of the Marketing Cluster at the ATENEO Graduate School of Business in Manila and is currently a visiting senior fellow at the IPMI International School, Jakarta. He has held key positions in a number of Asia–based corporations such as Group CEO of The Belo Medical Group, CEO of Intelligent Skin Care, Inc., Chairman Of Publicly Listed Empire East Suntrust Developers, and Country President and CEO of Singapore-based Electronic Realty Associates, Inc.

Professor Enrique Soriano

Professor Enrique M. Soriano is the Chair and Professor of Global Marketing at the Ateneo Graduate School of Business. He has held key positions in a number of Asia – based corporations such as Group CEO of the Belo Medical Group, CEO of Intelligent Skin Care, Inc., Chairman of publicly listed Empire East Suntrust Developers, and Country President and CEO of Singapore based Electronic Realty Associates, Inc.

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