Why do Businesses fail… intangibles..
There was a post in Mr. Wilson Ng’s blog regarding the reason why businesses fail… quite interesting because it listed some very useful statistics that all businessmen should worry about…
Which made me think… there are other reasons why businesses fail that you can’t place a statistic on… I’m speaking mainly about family corporations.
1. Succession Planning
My family was into farming… that was our way of life and what sent us through school. Now why did that cash cow all of a sudden come to an end? Because it suddenly crossed the street and got run over by a ten wheeler truck… to be more direct… well my old man died and before that he got terribly ill… those things weren’t foreseeable… but could have made a contingency plan for… not one of us knew how to run a farm, so my dad gave up the lease… goodbye 10 hectares of well planted bananas…
I have to marvel at the efficiency of my previous company. There the mantra is, always have a succession plan, expect that people you will be working with will leave, either by virtue of promotion, resignation or just wanting to take a well deserved vacation…. so they always made sure that you had a replacement and people didn’t it find it insulting to train somebody to replace them.
Lesson learned for me:
Always have a succession plan… you never know when you’ll kick the bucket or need to take a prolonged absence… so are your kids or subordinates capable of running the business when you leave? Do you have information that only you alone know about? Stuff like that will matter when the time comes…
2. The Value of Getting Along.
Let’s take for example Family A. They are about a dozen in the family… their wealth was comparable to that of the Lopezes and Ayala’s… When the Patriarch died, everything went south for them… they sold and they sold their properties because the brothers and sisters couldn’t get a long to run the empire together so they decided to get their own share of the vast empire… so what was once a great empire, is nothing no more… Things that ran well as a whole, didn’t run so well piecemeal… you can’t get any traction from just a wheel, you’ll need the whole frikkin car… when you look at them now… they’ve lost their wealth and position in society. Their once famous name is but a spec in the minds of the older generations. All because they couldn’t get along.
Lesson Learned for me:
Parents should foster in each child a sense of responsibilty to each others sibling. So that in times of trouble, all would be more than willing to sacrifice their personal interest to that of the group. When one suffers, all will suffer with him. Parents should watch out for petty quarels that escalate into deep rooted feelings of hate for one another. And can the favortism, that fosters sibling rivalry… that should only be done to pet dogs or sports teams… And don’t gamble on the premise that it’s just a phase they’re going through, they’ll get along real well once they’re mature enough… you never know what deep rooted feelings of hate are being planted.
Based on my personal experience, I’ve noticed that the successful succession families are those whose first borns have that sense of responsibility to his younger siblings and lack that arrogance and opinionatedness of first borns against their younger siblings… which I feel are infact great qualities of a leader… being responsible, openminded and patient with people much lesser or greater than them…
These things I always tell my wife, that we should make sure that our kids get along with one another. It’s a simple thing that could cost an empire.
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