Next gen strikes out on its own
Carlo (not his real name), 30, supposed heir to the family plastics manufacturing business, decides to start his own food venture.
An Atenean, Carlo graduated near the top of his class with Management honors and went to the US East Coast for an MBA. He worked for a consulting firm before returning to Manila. Everyone expected him to join the family enterprise.
But Carlo intends to be hands-on with his planned eatery “to make sure things go well.” He was so serious about this enterprise he had taken up cooking classes on weekends even while employed in New York.
His family was aghast.
Carlo calmly tells them he has saved up enough for his venture. A foodie at heart, he wants his life to literally have flavor.
According to Lolo Tatang, Carlo reminds him of his younger self—smart, hardworking, entrepreneurial.
“I am fortunate to have three other grandchildren working with me,” says Tatang. “They are diligent. But Carlo is the ideal one whom we are grooming to take over. I have nothing against his food ideas, but even if he finances his eatery out of his own pocket, our plastics business is growing fast. When we work side by side, I know we will expand more quickly. He owes it to us to help out.”
“Have you talked openly with him?” I ask.
“Yes, but he says food is his passion,” Tatang says. “It’s frustrating. He has become so self-centered, so Western.”
“There should be a way to absorb Carlo’s new venture into your business,” I say.
“But we are in plastics!” Tatang says. “We don’t know anything about food!”
“Carlo does, at least in theory,” I say. “Your company can afford to invest in his food business, right? That way, he might be persuaded to help you and his uncles and cousins, while still not letting go of his dream.”
I remind Tatang of a 2017 PwC survey that polled 100 in the younger generation around the world. One in four prefers to strike out on his own rather than toil in the family empire.
“The [family member] who exhibits entrepreneurial qualities and attitudes—suitable to lead the family business—usually wants to start his own business,” reports Jeffrey Tan in the magazine “Edge Singapore.”
Compromise
At first, Carlo did not like the idea of housing his baby, the eatery, under the family’s plastics company.
But he knows the family business has deeper pockets, which grants him more leeway to make a return. He also genuinely cares for Tatang.
“Deep down, I will feel just a little bit guilty if I totally turn my back on family,” Carlo tells me.
It took months of open discussion, feasibility studies, give-and-take, before a compromise was threshed out. The family would back Carlo’s food venture for a substantial sum, giving him four years to turn a profit.
In turn, he would immerse himself in the plastics firm for three full days a week, and be on call for the other two. On weekends he would be fully focused on his eatery.
However, Carlo declined to be Tatang’s successor.
Reluctantly, Tatang chose Carlo’s cousin Joe to take his place in the future.
Just because Joe is not Carlo does not mean the former is not qualified, I remind Tatang. Joe might not be as charismatic, but after eight years in the company, he has proven himself to be a steady, quiet yet respected leader.
Some nonfamily professional managers have also come on board, and they work well with Joe. I urge Tatang to have good trusted advisers who can help Joe when needed, and the family (including Carlo) has finally sat down to discuss a constitution.
If matters are made clear and the family continues to work well together, succession should not be a problem, even if those in the next generation decide to follow their heart.
