IT is extremely important for my readers to reflect on the five insights shared by my colleague, Prof. Danny Barrenechea.
These powerful insights, when embraced by every family member, represents the collective aspirations of a family business.
Similarly, I am sharing these aspirations again as a reminder to family businesses embroiled in a dispute with both sides in a state of heightened acrimony, that there will never be a clear winner in a family conflict.
The aspirations of every family business
-A healthy and stable business but ready to explore opportunities
-A healthy and harmonious family, free from any major conflict
-A family business that thrives on professionalism, excellence and meritocracy
-A family business that will transition to a family inspired business run by professional leaders and finally
-A family business that embraces governance and stewardship so it will continue from generation to generation. When family members internalize these aspirations and reinforce it with governance and succession, then we have successfully played our role as family business advisors to the hilt.
In the words of Louis Farrakhan, an American political Leader, “United, we can solve our problem and divided, we have nothing”.
The Cosmos Soft Drinks story
Danny is no stranger to family business dynamics. He belonged to a family that started the pioneering Cosmos Soft Drinks brand in 1918 when his grandfather, Wong Ning, a native of Kwantong Province, migrated to the Philippines and established the Manila Aerated Water Factory along Misericordia St. in Manila.
When World War II broke out, the Japanese Army incarcerated Wong Ning because of his affiliation with the Kuomintang government. He later died in prison. Wong Ning left seven children.
After the Manila liberation
Danny’s father was Henry and being the eldest boy, by tradition, must naturally assume the responsibility of managing the family business.
Henry was well-educated, armed with a PhD, exhibited leadership skills, honest and fair. He also had the vision and foresight and his brothers and sisters obeyed and respected him. Soon, the Cosmos brand grew while the local players disappeared one by one. At its peak, it became a fight between Cosmos, a local player versus Coke and Pepsi.
While the business grew, Danny was already being groomed to succeed his father. After graduating Salutatorian from Xavier School in 1961, he was sent to the US to complete his college education.
He fondly relates during one of our exchanges, “My father got me into UCLA and after graduation, he sent me to the University of San Francisco for my MBA. My father followed a succession plan and he was sort of preparing me to help in the business since I was the eldest boy. He even assured me that if I do well, I will take over the top spot.
An unexpected event
Danny recalls that fateful day in 1970. “While attending the graduation of my other brother in the US, papa suffered a stroke, which was caused by a tumor in his brain. The stroke paralyzed half of Papa’s body. He was devastated! After the operation, the verdict was malignant. All the dreams of Papa went down the drain.”
Papa is dead. Now what?
The stockholders, composed of Henry’s three brothers, a cousin, a nephew and Danny, met after the burial to decide who will succeed Henry as president.
Following Chinese tradition, the members of the immediately family would always have the preferential status over the secondary families. Danny was next in line.
With the death of Henry, will Danny, the eldest son, be the anointed successor?
To be continued.