The next generation

Ayala Corp.’s attitude towards business has been described as ‘conservative.’ And it is this quality that has kept this oldest business empire alive and kicking through all its 172 years of existence.

Brothers Jaime Augusto and Fernando Zobel de Ayala, who just recently were named chairman and CEO and president and COO, respectively, believe that this conservative attitude and refusal to become overly aggressive has indeed kept the company going through all these years.

Conservatism can be viewed with the old ‘half full’ half empty‚ adage. While being conservative has prevented Ayala’s businesses from rising that much, they also don’t fall that hard. The brothers take seriously their responsibility to be ‘caretakers’ of the business for the next generation. After all, this is a marathon, not a sprint, JAZA tells this writer, and if you’re in the business for the long haul, its better to prepare the businesses for sharp downturns by being conservative and not taking unnecessary risks.

Take the case of Ayala subsidiary Globe Telecom. I bluntly asked JAZA how it is that Globe Telecom used to be the leading mobile operator in the country until Smart Communications has overtaken Globe in terms of subscriber numbers and profits. He smiled and explained to me that the reason is simple: Globe has been there longer and its part of the business cycle. The fact that Globe’s net income dipped nine percent last year compared to the previous year does not seem to bother them because they believe that looking solely at the bottomline is a simplistic way of viewing the value of the business.

Stability and predictability characterize the Ayala businesses and being conservative about the business is a key element to achieve these, they emphasize. JAZA and FZA say they tend to be conservative as a group, which means no surprises, every move is announced properly, in recognition of the criticality of the businesses they are in. After all, if they are not careful, how can they make sure that they pass on the company to the next generation in a stronger way?

Their titles are new but the brothers have worked together and divided the work between them for many years now. They say they just moved a notch higher.

Like other siblings, they have different points of view of things, which is normal. But like the gentlemen that they are, they talk these differences through and 99 percent of the time, they are immediately resolved, JAZA says. One reason why their offices are next to each other, he adds.

They view their assumption of bigger responsibilities in Ayala Corp. as a chance to reinvent the company, find new ways to add value, and take advantage of new opportunities. How to be progressive and move ahead and at the same time assume this "caretaker" role is definitely a tough task. Two heads though are better than one and Ayala Corp. is blessed to have two.

Sunny European sojourn

I got a postcard from a friend based in an Eastern European country yesterday and she gladly told me about a group of Filipino tourists she met in the city’s Old Town Square recently. The group was supposedly a huge one, surely more than a hundred, and they were visibly all enjoying the sights and sounds of the city known for its golden spires. A little probing she did revealed that the humongous group is part of an even bigger delegation of sales agents and senior officers of a major player in the Philippine financial services sector that is widely reported to be facing very sunny skies at present.

The group was in the city for a business convention they were supposed to hold amongst themselves, which could have easily been done in Manila. Business for the company is obviously brisk, however, that they easily managed to pack all the delegates in two separate flights to Europe and book them all together in a plush, brand new hotel. In between business sessions, the participants even managed to make the local stores very happy as they made a mad scramble for designer items (the genuine ones, mind you!) they can bring home either as "pasalubong" or for their personal use. My friend was amazed how the women even made the local Louis Vuitton shop make a quick SOS call to its sister outlets from other nearby European cities just to be able to serve all the orders of their Filipino customers. Aghast by the group members‚ strong shopping power, one local store owner even shouted out loud in the street, "Philippines (is) a very rich country!"

For the financial services company to have afforded to take all the conference participants to eastern Europe clearly says a lot about how well it is currently doing. The participants were supposed to be composed of its top performing sales agents, and when you do have hundreds of them performing outstandingly, that should very well reflect on the company’s sales numbers. Based on the latest published reports, there is no doubt that the company is well on its way to dislodging its principal industry rival from market leadership. In fact, it already did that in one of its business lines, which is pre-need plans.

With the trip ensuring that the morale of the sales force and the officer corps is kept high, there is no doubt that this highly-motivated lot will turn in an even stronger market assault in the coming days. It surely helps that the team is led by a dynamic and charming maverick who not only knows how to play his game but also constantly inspires all the members of his team. Many say he is exactly who the institution needs as it finally makes a move to be the market leader. He is also very fortunate to have the full support of an equally charismatic and motherly chairwoman who is highly respected and looked up to in the industry she has served for almost 25 years.

After enjoying cool European weather, the team is now back in Manila raring to go back to working at bringing their sunny company to the head of the industry pack. Will they turn out to be hot enough for this challenge? We’ll soon find out.

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