Ateneo Family Business Development Center
“We aim to be the premier learning resource for family businesses in Asean,” says Ricardo Mercado, director of the Ateneo de Manila Family Business Development Center (AFBDC).
Full disclosure: I am on the board of directors, together with Aboitiz Equity Ventures chair Erramon Aboitiz, Balibago Waterworks Systems president Christino Panlilio, Philippine Foremost Milling Corp. President Aileen Ongkauko, Ateneo Graduate School of Business Dean Rudy Ang, Ateneo John Gokongwei School of Management (JGSOM) Dean Darwin Yu and professor Joseph Server.
Since 2008, the AFBDC has been helping family businesses manage family dynamics while achieving long-term business goals, given that family, management, and ownership often have conflicting priorities.
Clients range from small to very large family businesses in different industries, with various cultures and religions. Mostly run by the first generation and on the verge of succession, these family businesses are built by self-made entrepreneurs, many of whom find it hard to let go of authority to the next generation.
“The younger generation is usually submissive out of respect to parents, despite differences in opinion,” says Mercado.
The AFBDC gives seminars on how best to manage the business while sustaining family heritage.
“We want to narrow the gap of learning and understanding between the younger generations who have the opportunity to learn management in school through formal elective courses, and the older generations no longer in school, who learn through our seminars and modules,” he adds.
Research and facilitation
Family business centers are common in the United States and Europe, and are cropping up in the Philippines. What makes the AFBDC different from other centers?
One: Empirical research. Through client engagements, the AFBDC does research to further improve facilitation. Take the family constitution.
“We research on how it is being implemented, which provisions clients find easy or challenging to do, and why,” says Mercado. “We study how structures such as the family business or the clan council have helped the family manage differences and make decisions.”
Two: Family facilitation, which involves strengthening business-family relationships, crafting the family constitution, strategic and succession planning.
With understanding of family dynamics, family businesses can learn how to face conflicts and build stronger ties, while succeeding in business. Afterwards, the constitution makes clear the principles and guidelines that shareholders follow, the family’s purpose and values, members’ roles and responsibilities. These are best agreed upon before costly differences arise.
Strategic planning is not easy for any business because of resource constraints and competition. Add family expectations, and it becomes even more challenging, and all the more essential, in order to ensure smooth succession.
Succession involves change and often causes anxiety, thus a healthy succession must be planned for. It also gives family businesses the chance to reorganize as they are passed on to the next generation.
“A well-governed family business can work toward the highest objectives of the business,” says Mercado, “maximizing profit, improving strategy, creating jobs, fostering employee development, serving stakeholders.”
Team
The AFBDC team is all Atenean. Mercado works with managing director Arturo Valencia, a mathematics cum laude major and Shell executive for 23 years, with expatriate postings in London and Singapore; Romulo Ramirez, former vice president at PCI Asia Capital in Hong Kong, and Pilar Tolentino, cum laude management-honors major and former head of the Center for Family Ministries.
Mercado is a regular resource speaker on family businesses not just locally, but also in the United States. He has taught family business courses in Santa Clara University, University of the Pacific in Stockton and the University of San Diego.
Most importantly, Mercado knows the joys and challenges of family businesses firsthand. For more than two decades, he was involved in his family’s business, Red Ribbon Bakeshop, which has since been sold to the Jollibee Group. Starting out as executive assistant, Mercado worked his way to operations manager and eventually, president and director. Mercado guides family businesses not just from theory, but also from experience.
Sign up for the AFBDC’s seminar on Sustainability: Governance, Constitution, and Family Council, on May 31, 2014 at Ateneo Rockwell campus. E-mail [email protected] or call Grace at 830-2050.
Contact the Ateneo Family Business Development Center at 928-3503, e-mail [email protected], visit ateneofamilybusiness.weebly.com.
Next Friday: Professionals in the family business
E-mail the author at [email protected]. Get her book “Successful Family Businesses” at the University Press (tel. 4266001 loc 4613, e-mail [email protected].)
