Taokes gathered together to talk business during the Taipan Exclusive Webinar held on October 29, 2021 via Zoom. Presented by FWD Life Insurance Philippines, in partnership with CHiNOY TV, and co-organized by the Batch ‘97 Alumni Association of Xavier School (AAXS), the webinar centered around the theme “Reimagine Generational Wealth and Family Businesses.”
Valerie Tan of CHiNOYTV served as the host and among the panelists were: Dr. Henry Lim Bon Liong, the President of the Filipino-Chinese Chamber of Commerce Industry Incorporated, and the CEO of Sterling Paper Group of Companies and SL Agritech Corporation; Michelle Lim Gankee, the Executive Vice President of Sterling Paper Group of Companies, the Senior Vice President of SL Agritech Corporation, and also the daughter of Dr. Lim Bon Liong; Dr. Queena Lee-Chua, a psychologist, and a family business columnist; and Jasper Hendrik Cheng, a professional actuary and the CFO of FWD Life Insurance Philippines.
The webinar consisted of three subtopics, with the first topic being the importance and key factors of family business succession. Dr. Lim Bon Liong, who is the second generation owner of Sterling Paper, shared a unique piece of advice that his father imparted to him. “If you want to sell something, sell as high as possible, and yet sell more. So how can you sell something at a very high price and sell more? That was the challenge for me, and this is what we are going to pass on to the next generation,” Dr. Lim Bon Liong said.
In response, Ms. Gankee revealed that her challenge was that she wasn’t immediately given the leadership position in her father’s company, but instead, she had to start from the bottom in order to prove herself. “I’m glad that I started from the bottom. It’s part of the experience, and I also recommend this to other next generation [owners] to start from the bottom because you will know the problems and how the business runs, and it’s going to be easier for you to make decisions later on,” Ms. Gankee said.
Mr. Cheng added that investments also play a role in ensuring the continuity of the family business. “You need to make careful financial decisions in terms of how to use money, but don’t be bound by the availability or non-availability of the money. You have to make that decision independently. In terms of utilizing that extra cash flow, you have to think long term.”
The second topic delved into discussions about adapting and overcoming crises in the business, and here Dr. Lim Bon Liong gave insight on how his business was able to overcome the challenges of the Asian financial crisis, while Ms. Gankee talked about the strategies that Sterling Paper Group of Companies and SL Agritech took in order to cope with the pandemic.
Dr. Chua and Mr. Cheng, on the other hand, discussed the general business practices in handling a financial crisis. “The best way to survive the pandemic is to be proactive rather than reactive, so plan for contingencies, and invest also. Kasi kung reactive lang tayo, which is sadly what the majority of businesses are doing, many of them will probably shut down in the pandemic, or they have probably shut down already,” Dr. Chua pointed out.
“In times of crisis, you really have to stick to what you know, and the good thing about family businesses is that you know the environment, you know your business, and you can really tell which parts of your strategy are sustainable and still relevant in the current time. You have to be able to distinguish what are temporary setbacks versus what are structural changes already in the environment, in the industry, “ Mr. Cheng advised.
The last topic tackled the matter of securing the future of the family business, and Dr. Lim Bon Liong shared how he personally picked his successor. “In order to secure the family business, you really have to have a good successor. That’s why we invest in our third generation. Whoever I’m going to pass the baton to, it’s not because you are my eldest, you will automatically inherit the position. It’s open [to] all the third generation, [depending on] whoever is the most qualified,” Dr. Lim Bon Liong said.
Afterwards, the host brought up the “third generation curse,” which is a term used to describe how family businesses don’t usually last until the third generation, and Dr. Chua gave advice on how to break the curse.
“Sadly, the reason why people believe [the third generation curse] is because it’s true, it’s not a myth. Why is it that way? Obviously, it would be [because] the heirs are not qualified to run it, either because they don’t have the background or they don’t have the correct mentality. The best way to actually avoid the curse is: do not spoil your kids.” Dr. Chua cited Lance Gokongwei as an example, who had to drive a broken car to work every day and was only paid a salary of P2,000 per month by his father. With this, Ms. Gankee also shared from experience how her father never gave her an allowance back when she was in high school.
Despite the fact that family businesses need heirs to continue on into the future, Dr. Chua earlier stressed the importance of not putting pressure on the children to inherit the family business. “I think it is something that the older generation has to realize. It’s very difficult to force the younger generation to enter the family business, and guilt-tripping them may not be the answer because it’s only going to ruin your relationship.” Even if there are no suitable heirs, Dr, Chua assures that the family business can still survive so long as it has a good professional team.
The Taipan Exclusive Webinar concluded with a Q&A portion, where participants were given the chance to ask questions to any of the speakers. At the end of the event, participants also had the option to stay if they wished to interact more with the other attendees.
Tune in on CHiNOY TV’s Facebook page for more events like the Taipan Exclusive Webinar in the future.