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Ateneo has produced a book on John Gokongwei Jr., The
Path of Entrepreneurship by Marites A. Khanser. John gave me a copy
with his dedication, “To my dear friend.” More than a biography,
the tome is a textbook on management and entrepreneurship.
The book also uses data,
anecdotes and stories from articles in the course of my coverage of
John Gokongwei since 1974 when I first met him fighting for a board
seat in San Miguel Corp. He made three or four forays into SMC and
failed each time. The board battles and proxy wars brought John to
the limelight and he benefited immensely from the experience.
Just before the old man Andres
Soriano Jr. died (of cancer), the SMC CEO invited John to join the
SMC Hong Kong and the Anscor boards and sold him the Itemcop
property on Pioneer at a spectacular bargain, P1,000 per square
meter. Today, it is worth 50 times and has become John’s Cyber
Park.
To me, the most important chapter
in the book is Chapter 20, “The Nine Rules for Business Success”
which John himself wrote.
1. Change is inevitable and
flexibility is the key.
2. Personal stakes in the company
encourage everyone to work hard.
3. Mistakes and disappointments
are inevitable.
4. Good brand building equals
reputation.
5. Family support is crucial.
6. Never lose sleep thinking of
business risks.
7. Pausing to recharge brings new
vigor.
8. Reading and traveling enrich
one’s mind.
9. Philanthropy is a personal
satisfaction.
The rules sound very good—on
paper and if you are already a John Gokongwei. If you are budding
entrepreneur with little capital in a fiercely competitive market, I
don’t think you can subscribe to Rule No. 6 (about never losing
sleep) and Rule No. 9 (you cannot give what you don’t have yet).
On Rule One, John says he always
looks for “new developments in the business environment for
information and policies, which may affect our operations. The
decision to move from peddling soap on bicycles to bringing tires to
Manila on batels, to opening the first flour company, to being one
of the largest conglomerates in the Philippines today is a testament
to that flexibility. Even during the difficult times under martial
law or during the 1997 Asian financial crisis, our group was one of
the Filipino companies to survive and prosper because of our
flexibility and adaptability to change and adversity.”
On Rule No. 2, John gave each of
his siblings’ shares in the company. “They all worked very hard
for its progress,” he says. “However, it is not my siblings, but
also our employees who are committed to making our business
successful. We are currently studying a stock option plan to be
given to employees worth promoting and keeping, giving them the same
sense of ownership like those of my siblings. I am happy to note
that JG Summit’s stockholder’s equity has grown more than eleven
times since 1990 from P6.797 billion to P68.866 billion.” Net
worth is P95 billion by now.
On Rule Three, John made a number
of mistakes. They include, I believe, the purchase of Oriential
Petroleum (it didn’t produce oil) and the money-losing ice cream,
petrochemicals and textile businesses. John lost more than P3
billion from petrochemicals last year but made up for that by
hauling P2 billion in profits in six months of 2007 from Cebu
Pacific. He lost billions from Oriental but gained billions from
profits and sale of his PCIBank stake.
Says John: “Take them [the
mistakes] in stride, learn the lessons, and move on. One rule we
abide by in any business dealings is risking only up to 15% of our
net worth in any single venture. When businesses aren’t growing,
we let it go.”
On Rule No. 2, John says “one
of the most important things in our business is building brands.
Having good brands translates to quality, reputation, and good
governance. Our conglomerate is now in seven industries, and we
continuously build top brands.” Universal Robina Corp.’s Branded
Consumer Foods Group is the largest and is now present in seven
Asian countries.
Rule No. 5 is the same as Rule
No. 2. John’s anchor is his wife, Bia, who “has always been
there to support all my decisions and never got in the way.
Oftentimes, she serves as my sounding board. She is receptive and
gives good advice. In fact, most do not know that she organized what
is now our retail business. She was also there, taking care of the
children, making sure they grew up to be good, responsible
individuals, while I was busy expanding the business. She has indeed
done a good job.”
He also attributes his success to
the support of his mother, Juanita Lim, and his siblings, Henry,
Lily, Johnson and James, and his close friends, Gabriel Singson,
Pacifico Yap, and Ignacio Gotao, and his old friends in Cebu, Mario
Mendezona, Atty. Paquito Borromeo, and Ramiro Valenzuela.
On Rule No. 6, John says
“sleeping is a joy of life. My daily routine consists of an
afternoon nap. As much as possible, I do not accept lunch
appointments so as not to miss my nap that invigorates me to work in
the office up to dinnertime.”
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