Three Generations of Business and Beyond

How a family business in the Philippines is staying committed to growth in the midst of disruption.

RICARDO Lagdameo was born into success. 

From a small abaca plantation in the 1950's, his grandfather, Don Antonio Floirendo Sr, built the Anflo Management and Investment Corporation (ANFLOCOR) into a multi-faceted Philippines business conglomerate with interests spanning logistics, trucking and port operations through to agriculture, real estate and hospitality.

These diverse interests - and arguably the organisation's success - were built on a commitment to the region and people of Mindanao. This focus remains true until today.

By 2013, Lagdameo had spent 14 years working in investment banking, earning an MBA from Columbia University, and preparing to take his place as a leader in the family business.

Bringing fresh business perspectives, Lagdemeo knew all there was to know about the various Anflo operations but most importantly, he brought a keen self- awareness of just what he did not know.

Stepping into his new role as president of Damosa Land, a property development subsidiary of ANFLOCOR, was an exciting opportunity for Lagdameo to develop this relatively new company in his family's portfolio of companies while learning the inner workings of the real estate industry. Beyond that, it offered the chance to deliver new development opportunities to Mindanao, the second largest island in the Philippines, and its residents.

Lagdameo quickly made an impact, earning industry recognition and pushing real estate development into new territory. The 88 hectare mixed-use Agriya project is considered the first agritourism city in Asia and Damosa IT Park is Southern Mindanao’s first PEZA-registered IT facility. These ambitious projects have helped establish Lagdameo's expectations for the company's future with employees.

Like many family businesses that have led transformative changes in their community, Lagdameo acknowledges the amount of effort required to initiate the necessary changes in response to disruption, particularly during the pandemic. He recognised from the outset that getting employees to "buy in" and collaborate with change is critical to the long-term success of the organisation.

"We like to consider ourselves as accelerators for growth," Lagdameo says when talking about the various property projects under Damosa Land.

The third generation as progress

A common reference to family businesses is the 'third generation rule" - the idea that this generation - born into wealth and unaccustomed to business - would ultimately spend the business into bankruptcy.

Contrary to the image set by highly publicised squabbles between certain family members in various business empires - think the Murdochs and the daughter of Korean Airlines' chairman and the infamous "nuts" incident - family-owned businesses are usually far from fragile.

Some of the world's most well-known and successful corporations are family owned and operated and today around a quarter of the top 750 family businesses in the world were founded in Asia. Many of these enterprises like HCL Technologies and Wipro in India, Charoen Pokphand Group in Thailand, and Wilmar International Limited in Singapore are household names in the region.

Leaders of these organisations typically drive economic growth in their respective countries, demonstrating a level of stability and consistency through the generations that reinforces investor confidence.

In the current environment, José Maria Liberti, a clinical professor of Finance at Northwestern University's Kellogg School of Management, says that multi-generational family businesses are at an advantage because of their longevity and focus on "long-term horizons". The World Economic Forum even believes that this advantage predisposes them to being leaders in the post-pandemic recovery.

This is no coincidence, given the central role that these businesses play in society with long-standing corporate social responsibility commitments and community relationships such as Anflo's commitment to the island of Mindanao.

For Lagdameo - a member of the third generation - his entrée into the family business came with a mission and a hefty responsibility, more than any sense of entitlement. This extended to his style of leadership which was to demonstrate by example and get employees aligned to his vision for the future of Damonsa Land; imperative during the multi-faceted uncertainties of the pandemic.

"One thing that we had to do, and this meant me personally leading the charge, was get the buy-in because everyone was just so used to having a certain mindset. They were still getting paid, they still had a salary, so they didn't really feel the pain so much. So it was really a lot of trying to educate share best examples of what I was looking at from all over the world and saying, 'look, this new approach can work, we can do this'."

Shifting real estate

Prior to joining his family's organisation, Lagdameo worked in investment banking with small- and medium-sized enterprises. He brought this experience to the relatively young Damosa Land, leading its rapid expansion into developing sustainable, single and mixed-use buildings as well as industrial facilities in Davao City and other metropolitan areas.

"With real estate, you have this opportunity to shift. If one type of real estate is not working, you can always develop something else that's relevant. That's something that interests me, and really keeps us going every day. It's that ability to shift and to become relevant even during a pandemic," he said.

"We just had to shift the focus of who we were creating the spaces for, but there will definitely always be a market."

In the current environment, his team also faced a significant challenge to deliver the same quality of service which is always face-to-face in the world of real estate. The impact of the pandemic meant the team needed to migrate online and learn to explore and showcase real estate through a camera. Similar to other companies, Damosa Land was beginning to implement technology upgrades to make this possible - an important step in a traditional industry - and Covid-19 escalated the change.

"The different methods that we employed will give us an edge later. One, because everyone's using it and secondly because everyone wants things instantly nowadays. By using more technology, we have access to better data and that data is really going to help us to make decisions moving forward," Lagdameo said.

Learning and Re-learning

Lagdameo supported the introduction of this new technology with constant education, seminars on how to deploy new applications effectively and reinforce new processes. He viewed this education as vital for his employees and also for himself.

"I had to go back to school, and learn all of these new things" he shared, and for him that education included seeking guidance from other business leaders and executives who had lived through earlier crises and disruptions to their operations.

"I'm still relatively young so I'm not going to pretend I've seen everything. There are older people that have been through much worse, so I'm constantly talking to them, getting their wisdom and learning what they did during some of these disruptions," he said.

"The moment we realise that we don't have all the answers, then I think it makes us more vulnerable in a good way as we will know how to deal with our problems in the workplace and to deal with our team."

Flexibility for longevity

Perhaps because of the resilience of multi-generational family businesses, keeping an eye on the long-term plan for Damosa Land is a key part of how Lagdameo manages disruption.

He believes it is important to lean into change, but not make changes just for the sake of it. Essentially, he relies on having a plan for the long-term and through an adaptive leadership model, being ready for whatever scenario comes along.

"That's something that we also learned with the planning during this pandemic. In prior years, you set out and agree on a plan at the start of the year, and this is it, this is what we're going to do. Now, we have to have so many different scenarios, and the goal is to be ready for every eventuality" he said.

"Flexibility is going to be the key, definitely."

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