There have been a lot of examples about the so-called third generation jinx, others call it the third generation curse. The first generation is the founder, very enterprising, visionary, aggressive in the pursuit of his or her dream. He has limited resources but never wanting in passion, enthusiasm and drive. The second generation composed of sons and daughters are the professional expanders, developers, adding more businesses, or divisions, building new branches and even creating new products and services. The third generation, in fairness to them, does not deserve to be called the squanderers. Founder, expander and squanderer.
Look at what happened to the Lopez family of the Meralco, ABS-CBN, Chronicle and many other lines of businesses. Don Eugenio Lopez, the first generation was the founder. The sons of Don Eugenio expanded the conglomerate, but under the third generation, much of the groups' businesses went to MVP, or Manny V Pangilinan, including the jewel, Meralco. Look at what happened to San Miguel Corporation. Don Andres Soriano Sr. was the illustrious founder. Don Andres Soriano Jr. was the professional, hard-working expander. Well under the third generation, led by Don Andres Soriano III, it went to the hands of Danding Cojuangco and/or Ramon Ang. There are the families of Don Manolo Elizalde of the old Tanduay; Don Carlos Palanca of the La Tondeña legacy. Don Vicente Madrigal, and the Tuazons, the Aranetas, the Roxases.
Watch SM after Henry Sy died, the second generation led by Tessie Coson takes over. Watch Cebu Pacific and Robinsons, after John Gokongwei, well JG is very much alive, but Lance Gokongwei is prepared. Look at RCBC after Ambassador Yuchenco departed. Look at what happened to the Gaisanos, and how about the Aboitiz family. Look at the Aznars of the SWU. Imagine what will happen to UC after Atty. Go, and the rest of family corporations in Cebu and in the Philippines. We cannot help but think of UV. But the third generation is doing exceptionally well. We hope the trend continues.
Managing a family corporation has been proven manageable, even easy for the first generation. The founder and his wife, and some friends and close trusted relatives can easily agree on decisions when there is a dominant and well-respected leader. The second generation is the most successful, so far, standing very much worthy of the legacies their parents left. All eyes are focused on the third generation, and I did research on the many intricate matters that may help the young generations cope with the tremendous challenges of moving on, without Papa, or Mama.
There is one very wise counsel whispered to me by a successful taipan. The third generation should hold on to the Board of Trustees or Board of Directors. But the operations and the management should be given to a corps of professionals and non-partisan experts, with participation of the family in strategic and delicate positions, like finance, comptrollership, and other vital posts. The third generation should be given a specific unit with autonomy. But the overall control remains in the board. I will expound this further in the next issues.