By Prof Enrique Soriano
This is the last part of the story of George, the founder of a diversified business, a known philanthropist but battling the biggest battle of his life… racing against time! When we first met, he told me he was dying and was desperate as he had a little more than a year to live. Here was a well-known and influential business leader, facing death and pleading with me to help him prepare his one final act of greatness—an orderly succession to his children so they can carry on his legacy. Before our meeting ended, he again reiterated his request and implored me to help him, “Please, I cannot afford to drop the baton, I just can’t.”
In my first session with George and his family, I reiterated to everyone, especially to the children that as they embark on this succession journey, they must also walk it faithfully. This will require a major shift from their current individualistic attitude to sibling partnership with the end goal of stewardship, that every decision they make will revolve around the greater good, absolute discipline, compliance of rules, and real sacrifice. In short, the family must agree on the need to professionalize and clarify their vision for the sake of the company’s future. They must also align their aspirations for the business and for themselves and must decide on two very critical elements: as children and future owners, how will they be governed and how will they manage their relationships with the business. In short, I forewarned them that this journey will be tough and difficult before it gets better.
As our regular sessions went full steam, George was always present and engaged in many discussions, sometimes heated and in many cases, inspiring. But his last few months were hard to witness and the most heartbreaking was watching him being wheeled inside the room. George’s booming voice and energy was slowly fading and his interaction was limited to head and neck gestures and nods to express his agreement. When his health further deteriorated, the doctors sternly advised the family that he should no longer join our sessions.
As his body weakened, I received a message from his personal nurse to hurriedly visit him. In a frail and almost whispering tone, George asked me a question, “my family will be ok and they will take care of our employees, right?” He repeated the question with a look of desperation on his face. At that moment, I realized that being uncomfortable and facing death were the least of his concerns. What was most terrifying to George was leaving behind his family and the business enterprise hanging in the balance. Suddenly, I understood that what he needed most was not for me to make sure he was comfortable, but for me to reassure him that his family and business will be ok after he was gone. A few days after, he passed away leaving a huge void. We were halfway into our succession and governance journey.
Family, Business, Legacy are at stake
We may show pity over George’s unfortunate state, but his situation is not so different from that of many founders. A typical founder continues to drive the business forward, obsessed with making loads of money, very particular with his stature or reputation in the community and in effect continues to declare to all and sundry that “I am in charge and in full control of the business that I built from nothing!”
The Georges’ of this world remain at the center of all major decisions and they tend to have little trust in others. They do not have senior level and independent minded executives but trusted assistants acting like managers that were with them during the startup years. Typically these “managers/assistants” have nary any decision making function and as a result, the corporate culture is highly paternalistic. Unless a transformation or major shift to a more professional structure happens (where managers are empowered) before the founder dies, these types of founder-centric firms do not always survive.