A nostalgic walk through post-war Manila highlights the changing business landscape. Business and commercial centers have sprouted in Makati, Ortigas, Libis in Quezon City, Alabang and now even in Fort Bonifacio, steering away from downtown Manila that used to be the center of action. An older relative recalls watching local movies at Dalisay Theater as well as Life Theater and viewing foreign movies in Cine-Ideal. Shopping was done at high-end Aguinaldo’s department store or at Good Earth Emporium. Another relative reminisces about her young adult days when she would frequent the German-established Botica Boie that was also known for its coffee shop. The many eateries in the area included Savory and Little Quiapo as well as Ma Mon Luk, famous for its noodle soup, popularly known as “mami” named after the Cantonese immigrant who perfected the taste. There was also D&E Shoppe initially located in Avenida but transferred to Quezon City when the original restaurant burned. It was a place where businessmen, government officials and later journalists would flock. In other parts of town, there was 3M Pizza.
Remembering the brands
In the 1970s, there was Ali Mall named after the famous boxer Muhammad Ali who had fought a match in Manila. Nearby was the C.O.D. department store remembered for its annual Christmas moving mannequin display. At about this time, Makati City that was transformed by the Ayala family from marsh land into the prime business district was becoming quite popular. Iconic buildings were the Rizal Theater, Maranaw Arcade, Sulo Hotel and The Plaza. I recall shopping at Alemars and Erewhon for books, Greggs for school shoes, Happy Feet for wooden sandals, Syvels for dressy shoes and clothes and Castles for textile and accessories. If we wanted custom-made shoes, we went to Marikina.
There was Makati Supermarket for groceries. Inside supermarkets were many popular food brands being sold. There were Bakerite bread, Baguio cooking oil, Marca Pina soy sauce, Papa ketchup, Serg’s chocolates, RC Cola to name a few. In department stores, there was Ang Tibay shoes and Caronia nail polish. The basketball teams carried names like Yco, a brand name for a floor wax, Ysmael Steel, a steel manufacturer, and later on Crispa, known for its high-quality undergarments.
People banked at Philtrust, Banco Filipino, FEATI, Far East Bank and the Associated Banking Corp. Credit cards were limited to Diner’s, then Bankard. Famous vacation spot was Puerto Azul. There were not many hospitals and in Sta. Ana, my father’s family owned St. Anne’s Hospital.
Failing to address changing life cycles
Today, some of the brands, restaurants and stores are still around, while others are not. Those that failed to reinvent themselves have lost their glamour. Did this result from the end of a brand life cycle, product life cycle, the industry life cycle or the business life cycle? Did businesses close due to environmental circumstances? Since most of these businesses were family owned, did the families fail to work with each other in making their businesses grow?
A quick research of Philippine family businesses shows that business decline actually results from the failure of family members to address the challenges brought about the change in the different life cycle dimensions.
For instance, business leaders must confront the issue of succession. I interviewed many business leaders who believe they are in the pink of health and their presence in the business is vital to its survival. When a leader thinks this way, they are unable to plan for the future. Similarly, there are those who fail to plan for a professionally managed organization, where non-family leaders can work for the success of the business. Professional managers should also be part of the pool from where to choose a successor from but there are families who prefer their businesses to die naturally than to allow a non-relative to come in. To arrest their fears, the introduction of a governance mechanism can allay the fears of family members.
Going with the times
Increasing competition as a factor outside the family is a tough one. What is needed in this situation is a fresh mind that perhaps can reposition the product or create a partnership with others in the upstream of the value chain. Clearly, the winning formula that catapults business and products to household names decades ago, cannot work in today’s competitive climate. If families would like their businesses to survive beyond their generation, they must be prepared to go with the times.
Finally, environmental factors are indeed beyond the control of business families. The rapidly changing Philippine economy is truly unhealthy for businessmen who desire to make their businesses outlive them so that it may be passed on to future generations. There are some things in the future that are more certain than others. The competitive environment does change with the entrance of new players, new products as well as with innovative ways of producing and selling, resulting from rapidly evolving technology. A company that does not prepare for this will fail. There is yet to be a company selling the same product using the same business strategy that has survived through decades. Innovation must set in and the people responsible for innovation are the decision-makers. In the family business, that is usually the family.
The life cycle model of analyzing longevity is applicable to all businesses. What makes this a little tougher for family business is the added element of the family. A family prepared to meet the challenges as their family, their product, and their businesses, move from one stage of the life cycle to another has a greater chance of passing their business to the next generation.
Breaking away from inertia
People change, forms of organization change. The stories of Philippine businesses that have lost their prominence show the resistance to change, some more evident than others. That inability to move forward is called inertia. To break away from inertia, one must innovate. There are of course risks to innovation, risks that conservative owners are afraid to take. Yet without taking those risks, an organization certainly dies.
Studying the reasons family businesses have failed, and understanding the motivations to revive once-active family businesses provides valuable insight on the role families have in the life, death and possibly rebirths of their businesses. If more families become aware of the impact of their influence, this may help them prepare for certain eventualities in their family business life cycle or encourage them to reconsider reviving their businesses.
I am currently studying the evolution of Philippine family businesses. If you have views you want to share or if you are interested to be part of the research, do contact me.
Dr. Santiago is a full professor at the Management and Organization Department of De La Salle University. She teaches Corporate Social Responsiveness, Sustainable Organizations, Leadership in Organization, Family Business Management, Human Resource Management and Finance in Education. E-mail: [email protected]
The views expressed above are the author’s and do not necessarily reflect the official position of De La Salle University, its faculty, and its administrators.