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Philippine Business Magazine: Volume 8
No.1 - Visions
Built To Last
Time-tested values guide the company's
existence beyond mere bottomlines
By Oscar Lopez
When Oscar Lopez delivered his
acceptance speech as Management Man of the Year 2000 given by the
Management Association of the Philippines on 29 January 2001, he
shared the award with all the Lopez entrepreneurs and professional
managers. Apart from them, he said much of the credit for the tremendous
growth of the Lopez Group goes to his late brother, Geny, who provided
the leadership to make the group grow in size and scope way beyond
where it was before martial law. Going beyond a recollection of
how the 70-year old family business survived the valleys - during
World War II and martial law - Oscar Lopez dwelt on basic values
and principles that guide the group's existence beyond mere bottomline
results. Excerpts of his speech:
The test of true and effective management of a company
that is built to last starts when the questions "what do we
stand for" and "why do we exist" are asked. I would
like to take this occasion to reaffirm our commitment to the core
values that have sustained us through many difficult times in the
past.
First and foremost is our commitment to family and
corporate unity. In essence this means that the family must, relative
to its businesses, move as one and with one voice. We also maintain
certain rituals aimed at continually communicating and building
consensus within the family. Corporate unity is nurtured in much
the same fashion as we nurture family unity. Hence there are rituals
to be observed, geared towards promoting consensus-building across
the Group. In both Benpres and First Holdings, I hold bi-weekly
meetings of chief executives and operating officers. At least once
a year, usually during budget time, we hold a more formal forum
for all CEOs and operating officers of all the Lopez companies and
affiliates, to inform each other of how we did the previous year
and what we expect to do the coming year.
Our second most important core value is our commitment
to our employees. My father said it well in a speech to Meralco
employees: "Human values are above and far superior to material
values… our success should be measured not by the wealth we
can accumulate, but by the amount of happiness we can spread to
our employees." But his most quotable quote was the following:
"In case of doubt in a controversy arising between labor and
management, the doubt must always be resolved in favor of labor."
By living up to this principle, he never had any strikes in any
of his companies. And our companies continue to live and abide by
this principle.
Our third core value is public service. A passion
for public service in effect is the core ideology that drives the
Lopez Group. My late brother Geny articulated public service as
business philosophy in a speech he prepared but which I delivered
here at the MAP meeting in August of 1997. He said: "Our reason
for being in business is to render public service. Public service
- doing well by doing good. Profits are not the only reason we go
to work each day. There is the fulfillment of being able to give
back value to others who deserve the best for their money."
Our fourth core value which my father constantly stressed
is education and the concept of continuous learning and improvement
in our companies. My father firmly believed that young talent must
be nurtured by the best education possible, perhaps because as a
young man, he went to the best schools here and abroad (Ateneo,
U.P. School of Law, and Harvard). He also saw to it that Geny and
I went to Ateneo and Harvard. Later on, he sought to provide other
young Filipinos the opportunity for a Harvard-quality business education
by donating the edifice of the Asian Institute of Management here
in Manila.
We, his children, have decided to institutionalize
this learning process within our Group of Companies by establishing
the Eugenio Lopez Development Center in the hills of Antipolo in
1997 in what was originally to be my father's retirement mansion.
This Center is dedicated to the continuing professionalization of
our management staff.
At this point I would like to digress briefly from
my topic to talk about current events, because we businessmen do
not operate in a vacuum. Today, the biggest challenge is what happens
after EDSA 2.
The lesson of EDSA 2 is that people, especially the
young, are sick and tired of corruption and moral turpitude in government.
The impeachment hearing confirmed their worst fears about shenanigans
in high places and impelled them to take a direct hand in effecting
change. The trial enabled us to see more clearly that morality in
government is directly related to our country's economic health.
As the Dean of the U.P. School of Economics, Prof.
Raul Fabella, observed in a recent paper, "without the rule
of law and the institution of morality, there is no decent and civilized
life, let alone a market economy."
The Swedish economist, Gunnar Myrdal, long ago talked
about the "soft state" - a description that fits many
developing countries like ours - where there is rampant buying and
selling of rules and enforcement. In a soft state, the principal
source of wealth is not created value but extracted value based
on power over rules and enforcement, the usual results being bad
infrastructure, poor revenue collection, higher cost of doing business,
poor investment allocation, and slow economic growth.
Clearly, we have to change if we are to prosper, and
it is significant that our new President, Gloria Macapagal-Arroyo,
has recognized EDSA 2 as primarily a moral revolution. If so, then
we have to follow through the logic of that moral revolution.
It has been pointed out, and rightfully so, that if EDSA 2 happened,
it is because EDSA 1 failed to achieve its main purpose. And EDSA
1 failed because the main culprits were allowed to leave the country
and go unpunished, and that no new moral order ensued from EDSA
1.
Will all this happen again in EDSA 2? We hope not
but President Arroyo must realize that she was put in power by the
people, not to conduct government and business as usual, such as
the distribution of spoils of office to political allies, but to
create the conditions to make the moral revolution possible, which
includes first and foremost throwing all the rascals in jail, and
then recasting the bureaucracy to reflect a system based on merit
rather than political patronage and creating a much more efficient
tax collection system that will at the same time go after the big
tax evaders.
Unless all these things and more are done, EDSA 3 may not be too
far behind EDSA 2.
Oscar M. Lopez is chairman and CEO of Benpres
Holdings Corporation
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