What happens when the chairpersons of three corporate giants with a combined history of 396 years are interviewed together about the secrets of their longevity and success? The leaders of the century-old Filipino institutions, Insular Life, Ayala Corporation and Aboitiz Equity Ventures, widely recognized as 3 of the best-managed companies in the country, guested in a forum last week dubbed “Enduring Legacies: The Power of Purpose” hosted by David Celdran. The webinar was part of the series of high-powered activities sponsored by InLife, which is celebrating its 110th Founding Anniversary this year. The accomplished panelists not only demonstrated that they have learned from their historic past but they can also hold their own against the present crisis.
Admittedly, Covid-19 is the elephant in the room, which no company can ignore. No business has been spared from this scourge. Many enterprises have been shattered by the pandemic. Thus, Celdran believes that 2020 is perhaps the most challenging year for all business organizations. How did the coronavirus impact the three companies, which have confronted several challenges many times in the past?
Jaime Zobel de Ayala (JAZA), Chairman and Chief Executive Officer of the Ayala Corporation, remarked: “There are advantages and disadvantages to seeing things from the lens of a company with some longevity… There had been world wars, there had been shifts and changes in the Philippine political atmosphere. After the Second World War, Ayala Corporation had very little liquidity… to get itself back on its feet. So many have gone through in many ways, far worse, but I don’t think I’ve seen a situation where all revenues not only in the Philippines, but across the world, just ground to a halt as a massive pandemic hit globally. I think it’s unprecedented in history.” He added that a company that has undergone similar cycles before knows that there are ways of getting through it. A company should be imaginative enough to reinvent itself in the midst of a crisis. One should not dwell much on past successes but develop the capacity for reinvention of the organization. A pandemic is a crisis that needs to be managed more efficiently.
Erramon Aboitiz (Monchu), Chairman of Aboitiz Equity Ventures, agreed with JAZA that Covid-19 has been unprecedented, which has adversely affected the companies’ revenues. Monchu asked: “Will experience really help you here? One could lose hope, feel defeated and give up. With experience, you learned that things are never as bad as they look, never as bad as they are.” He further said that experience gives you the confidence that you can overcome the crisis. Monchu also cited the benefit of company diversification, which has allowed businesses that are doing well and more resilient to keep the entire organization going.
Nina Aguas (Nina), Chief Executive Officer and Executive Chairman of InLife, the oldest and largest Filipino life insurance company in the country, acknowledged that its long history and legacy transmitted by its forebears have served as inspiration to the current management. She recalled what the company had suffered during the last war when premiums were paid with Mickey Mouse money. InLife was reeling financially and was almost bankrupt after liberation if not for the survival skills of her predecessors. Nina credits the financial strength of the company as the major factor in successfully grappling with the current crisis. “What was very critical for us during this pandemic is the strength of our reserve position, as well as our capital.” With a total members’ equity of P1.5 billion, InLife is the highest capitalized Filipino insurance company and is in the best position to serve the public as a strong and dependable partner in planning their financial security.
Even Celdran, the unflappable host, was awed by the collective history of his subjects when he gushed: “It’s great to have that perspective of history. It’s difficult to take the helm of a company as large as Ayala or Aboitiz with over a century of history plus the heavy burden of carrying your family name on it. How does one handle that weight of responsibility?”
Building enterprises that are built to last for centuries is never a walk in the park. Several generations of Ayalas and Aboitizes have served their own company, which carry their illustrious names. InLife used to be a part of the Ayala conglomerate but it became mutualized in 1987, and it has become a continuing challenge to its professional managers to keep its leadership status in the insurance industry. JAZA declared that “it is important to have a sense of the future and the sense of making the company continuously relevant.” To be relevant, one has to address the climate-related issues, sustainability issues, and the social related issues that JAZA has described as “pain points.”
Monchu believes that diversification and reinventing the company are critical keys to long life. Aboitiz was earlier known as an abaca trading firm and later as an inter-island shipping company. JAZA exclaimed how Aboitiz transformed into a leading power company and a top player in many other business lines after abandoning the traditional fields that it previously led. Its resiliency is built on a strong foundation founded on trust, quality, fairness and integrity. Monchu stressed that as businessmen, the Aboitizes are just stewards of capital. This philosophy has been ingrained in them from one generation to the next. This is reflected in the group’s purpose —to drive change for a better world by advancing business and communities.
Nina shares this view by stating: “For us at InLife, the starting point is always our sense of purpose and stewardship. Generating profit is of course important… but our purpose does not end there. Quite the contrary, our focus is on the difference we make in the broader society.”
On longevity, Nina said: “Even before the pandemic struck, the average lifespan of US S&P companies has gone down from 67 to 15 years, with 76 percent of the top 100 companies disappearing in 30 years.” Nina admitted that the coronavirus has imposed new ways of doing things and they pose “daunting challenges to corporate longevity…. It is perhaps apocryphal to say that the days of centennial corporations are numbered” and as their stories have shown, centennial companies are better positioned to thrive for the next 100 years.
These industry champions are unanimous in saying that an organization needs a purpose, which should be clearly articulated to all stakeholders. Nina chimed in: “Without purpose, you lose the heart and the soul of the corporation.”
The intense and determined pursuit of purpose spells the difference. This separates the winners from the losers. And those who survive, leave a trail of legacy that enriches the lives of our people. Nina speaks for the group when she concluded: “As a centennial corporation, we care equally about legacy—leaving behind an organization, and a society, in a much better place.” Keeping that legacy alive is a daunting task. And Zobel de Ayala said it matter-of-factly: “The challenge with an institution that has longevity is to make sure that you are not the last on the line. It would be tragic if the company disappears during your watch.” I’m certain that the Aboitizes are nodding in full agreement having trained many generations of their clan to preserve their company’s heritage. With these assuring words from these respected thought leaders that have ably defended their turf against past upheavals, we can look forward to a sustainable resilient growth ahead.