“The sudden death of Henry Wong at 53, the acknowledged patriarch of the Cosmos Bottling family business, is a reminder that all of us–no matter how much we’ve accomplished and what we’ve built for ourselves–are mere mortals.”
WITH the death of the patriarch, is it the beginning of the end for the family business?
Visionaries and founders, second generation leaders, patriarchs or matriarchs always think of themselves as superheroes and take the inevitability of death lightly until one day, he or she discovers something that will forever change his or her perspective about life and living.
And then in the blink of an eye, the mortal faces death and reflects on the family and the family business and the “what ifs” and the “what should have been done”. But in all likelihood, it will be too late.
Thus, it is no surprise that the Chinese saying “Wealth shall not last three generations” will continue to consume and haunt families in the event that death suddenly occurs in the family.
Any death can disrupt a functioning family and can mercilessly cause the family business to jolt and veer off course. Worse, the lack of preparation and the entitlement of the family members can cause the family business to fall apart and disintegrate.
How then should family businesses deal with such a powerful emotional event? Allow me to continue with the third part of the Wong Family story with the hope that family members, especially those that are actively running the business, will finally take to heart the importance of preparing for a future event like the death of the patriarch or any family member.
The Cosmos Bottling story
It was a decision that Danny respected, knowing fully well that he was still “wet between the ears”. In short, Danny was barely a year in the business and, despite having an MBA under his belt, he still lacked the experience in leading a big organization. So the board chose an outsider in the person of William Ma Padua, an uncle and a professional rolled into one.
In the words of Danny, “Uncle William empowered the younger executives to make decisions and encouraged them to learn from their mistakes. He set the guidelines and we worked within the guidelines. The business grew and we continued with our expansion.”
But another unexpected crisis happened
After ten years of continued growth, William, in one of his visits to the US, suffered a mild heart attack and immediately decided to “call it quits”.
With the vacuum created by the untimely resignation of William and to avoid choosing one nephew over the other, the siblings of Danny’s father decided to let the number two brother, Hubert, who was the chairman at the time, assumed the presidency. Danny was again bypassed and refers to the decision of the uncles not only “unfair but clearly an emotional one.”
A test of character, credibility and competence
Danny went on to share his frustrations about Hubert. ”Can a person without a college degree, did not succeed in business, lacked human relations skills, stubborn, and who believed that he was always right but afraid to make important business decisions, run a family business made up of people from different families? My uncle was all of the above!”
The management was so demoralized, especially the family members working at Cosmos. Instead of solving relationship problems, Hubert would challenge family members who did not like the way he run things to quit or sell out if they can find a buyer, and that is what the other family members did.
With the squabbles happening almost regularly and the disputes continued with increasing acrimony, coupled with shouting accusations during board meetings, the situation reached a boiling point that prompted family members to entertain the idea of selling to outside parties.
So when offers came, the disgruntled members grabbed the opportunity and sold the majority shares of the company. In Danny’s own words, “Cosmos was sold for the wrong reasons and for the wrong price.”
The eventual transfer of ownership to Joey Concepcion of the RFM Group concluded the end of the Wong Family’s ownership of the Cosmos Bottling Company after three generations. The Cosmos family business died under the failed leadership of the second and third generation family members.
Cosmos would have celebrated their 98th year in business this year.