If you become more professional, you become more efficient. If you become more efficient, you become more profitable. If you become more profitable, you can grow!
That’s the reality in business. No man is an island. Business needs talented people to surround the visionary and founder. So what are the characteristics of founders and business owners? Primarily, they are deal makers, opportunistic and ambitious. They are obsessed in growing the business at all cost. They started poor with literally nothing except the shirt in their backs. For founders of businesses like my former boss and mentor, Andrew Tan, he was born in China and the son of poor immigrants from Fujian province. His family migrated to Hong Kong when he was four years old. As a child, he and his family used to share a tenement apartment with four other families, with only one bathroom and one concrete table for all the families’ cooking stoves. At 16, he came to the Philippines to join his father who was then working in a transistor radio factory. Tan recalls the difficult period, “I lived with my parents in a cramped 20 square meter apartment in Sta. Cruz, Manila. I struggled throughout my college days because I had no money. To save on jeepney fare, I walked every day from my apartment to the UE campus on C.M. Recto.”
For lunch, Tan often ate “bananacue” (fried bananas) that he bought from vendors along Gastambide Street. During his first two years as a student, he supported himself by selling watches and tutoring grade school students in math on a part-time basis. It was hard juggling a part-time job and going to college, but Tan never complained. He learned that whether working or studying, doing it as best as he could gave him a sense of satisfaction and fulfillment. It also helped him become a better person.
Tan was a former employee with limited or no resources and decided to make it big onto the road to dollar billionaire status. Founders like Tan usually create a whole new paradigm for their businesses, challenging the dominant market leader in as many industries as possible. To start the road to leadership, the founder must have a long, strong vision for the future. How will this industry, this space, this company look like in 20 years?
Unfortunately, the rags to riches story of Tan is an exception. He admits that he couldn’t have achieved his feat if not with the help of professionals. When Tan founded property giant, Megaworld Corporation in 1989, he had to rely on professionals as there was no one to turn to. His children at that time were still in school. When he listed the brand in 1994, professionals ably assisted him. When he grew the Emperador brand to become the world’s biggest brandy, his trusted lieutenants were all non-family executives and they are still running operations up until today. Tan’s children started to join only right after university with Kevin, the eldest jumping in sometime in 2001. Soon after Kendrick, the younger offspring joined. In short, the businesses under Tan were all moving at break neck speed navigated by professionals with Tan directing the efforts.
Unfortunately, for most founders, the difference ends there. Typically, the business owner is a lot better at inventing concepts than he was with more prosaic duties, such as planning and management. As he creates momentum for the business, the supporting units falters as the speed in making money takes a toll on the back end. When the business systems become more complicated, the founder finds himself in a dilemma to adopt to a new, more efficient solution.
Pride and being stubborn kicks in with this statement, “That’s the way we’ve always done it” or “I have been successful already, what is there to fix?” Admittedly for founders, change is hard and it takes time to reconcile with the reality of professionalizing the business. Trust is Important. A business owner cannot professionalize unless he or she trusts non-family employees to make important decisions.
You’ve created an organization chart containing non-family names… now respect it! The key is to stay ahead of competition and hire the right people with the right skills. Start right now.
Prof Enrique Soriano is a World Bank/IFC Governance Consultant, Senior Advisor of Post and Powell Singapore and the Executive Director of Wong + Bernstein, a research and consulting firm in Asia that serves family businesses, family offices and family foundations.
He is an associate member of the Singapore Institute of Directors (SID) and an advisor to business families worldwide, a sought after governance speaker at conferences, and the author of many articles and publications, including two best-selling Family Business books (Ensuring Your Family Business Legacy 2013 and 2015). You can read Prof Soriano’s business articles for free at www.Faminbusiness.com