Last March, while on an overseas family trip, my husband experienced severe pain in his lower back. Halfway through our vacation, the pain did not let him sleep on his back and required him to be in a wheelchair during the few times that he was able to join us to eat out or go sightseeing. By the time we were at the airport for our flight back to Manila, he could only manage to walk short distances with discomfort. Somehow, he survived the long hours of sitting down during the flight even if his back had become extremely sensitive to touch. My husband’s declining health was unexpected; otherwise, we would not have gone on a trip.
Over the next three months, our family life was a tumultuous sea as my husband’s life ebbed away until lung cancer claimed his final earthly breath. Even if death was certain, and my husband was already in his senior years, we were caught unprepared for his demise. My children, most especially, were overwhelmed by grief. Yet, the redeeming factor in caring for a loved one in the time leading to his death was the wealth of life lessons we learned in facing pain and suffering.
I have learned the importance of preparing for the certainties and possibilities of going away and letting go. One day, I will retire from my busy work life. One day, my grown-up children will leave home and live on their own. One day, my health may fail me. One day, I, too, will die. I believe that the deathbed is not the best place for bequeathal. It is best to plan and discuss the eventualities of going away and letting go, whether in informal discussions or formal documentation.
In his Sun Star column “Inside Family Business” (2023), Enrique Soriano pointed out two crucial lessons to ensure “longevity, wealth preservation, and overall business health” among family businesses worldwide — the unpredictability of life and the paramount importance of proactive preparedness. Soriano reminded family business owners that business is not “solely about sales, expansion, and growth; it’s also about safeguarding against the unexpected.”
By proactively planning for succession, business owners can mitigate risks, preserve wealth, and safeguard the legacy of the family enterprise, according to CBOS Solutions, Inc. (2024) in its blog on “Succession Planning in Family-Owned Businesses in the Philippines.” A study by Mangambo et al. (2024) on the factors affecting succession planning in family-owned fish-trading SMEs in Tanzania identified key predictors of succession planning, including “readiness of the successor, the presence of a clear and documented succession plan, effective governance board, a well-defined organizational structure, and the existence of a written strategic plan.” Among these factors, a study by Renuka and Marath (2021) showed the positive effect of governance structure on the success of the succession process.
The same study, however, reported that family firms in India have a more informal organizational and governance structure and an unplanned approach to business succession. I would think that this is the case in many developing Asian countries and call for more stringent implementation of organizational and governance structures to ensure the successful transfer of the management of family businesses from outgoing owners to their successors.
Family-owned or family-controlled businesses comprise 80% of businesses in the Philippines, making family businesses the backbone of our economy. Family business owners, therefore, must ensure smooth leadership transitions for risk management. Succession planning does not entail depressing discussions about illness, accident, or death in the family. As studies show, professionalizing the family business by creating an organizational chart and a governance body and writing a strategic plan lays the foundation for a successful succession process.
Angelina G. Golamco teaches strategic human resource management as well as corporate social responsibility at the Ramon V. Del Rosario College of Business of De La Salle University.
