AUG. 11 is the birth centenary of Mr. John Gokongwei Jr. I had the privilege of working for him when I accepted Rafael Buenaventura’s offer and left working for American Express Bank in New York, and joined PCI Bank and PCI Capital from late 1989 to early 1993. I also led deals for the Gokongwei group while at Salomon Brothers and Merrill Lynch.
Often, people ask me how I became a very thorough and prepared banker, and I always reply, “reporting weekly to Mr. John.” Mr. John was the chairman of the executive committee of PCI Bank and PCI Capital when I was there, and he always came to meetings very prepared and would ask tough, practical and on point questions. As a 30-year aspiring investment banker who was given the big break few are given to be MD of PCI Capital, I was simultaneously humble and ambitious enough to be prepared and to seize the opportunity, and make the most of it. As an aside, it does not cease to disappoint me when people who are given rare opportunities blow it because they are insufficiently appreciative of the opportunity given and often view getting the position as the accomplishment, not what you do with it. Right away, I know the person lacks judgment and maturity regardless of age. Invariably, unless they are great internal politicians, there is a cap to their success. Mr. John was a demanding and difficult person but did not demand anything of others that he did not demand of himself or the standard he maintained. What are some of the traits I found unique to Mr. John worth emulating?
He was the most intellectually curious CEO and founder I dealt with. He would read a lot on various relevant topics and not just business, economics and finance. He would assimilate and integrate those lessons and insights into his decision-making. His desk calendar would include the dates like Federal Reserve meetings, release of economic data in the US, release of GDP data for the Philippines and so on. When trends in business or economic theory and policy would become popular, he knew about them ahead of time from his readings and would have a view on whether it made sense or not and its applicability to us. This was much harder to do in the pre-internet era.
He had a deep understanding of both detail and the whole picture. In one of my first major presentations to him in early 1990, PCI Capital was invited to co-lead a midsized initial public offering (IPO). Mr. John asked me something like “on page 56 of the prospectus it states the part of the income comes from this one-time gain,” and being ready, I said, “yes, Mr. John, but if you see on p. 87 it further explains where those funds are going to be redeployed, so if successful there will be continuing revenue rather than be used for a pre-IPO dividend.” He told my boss, Paeng Buenaventura — your stateside hire is masipag.
He thought big. Even in the 1990s, he had plans for Universal Robina Corp. to become a regional snack food company, which it did become. The Philippines was and remains a good market for branded consumer products, but he did not want to limit his companies to that.
He was very proud of being an industrialist. While he did eventually move, and successfully, to real estate, banking, retail and malls, he was proudest of being an industrialist. He did it and succeeded in businesses where he competed without subsidy or favors with other major players and multinationals. I wish the country was more appreciative of his efforts to find manufacturing opportunities, and if we had a more supportive and less naïve, and believing in the Washington Consensus economists and policymakers, we might have had dozens who emulated Mr. John in manufacturing and industrialized a lot more than our pitiful efforts which only have scale today in food processing, cement and a few others like some pharmaceuticals.
He was a self-made man who challenged and broke boundaries. He was born into a prosperous family in Cebu that fell on hard times, and his father died early. He had to literally as a teenager provide for his family and keep them together and did. All he achieved was on his own. He wasn’t gifted a company or inheritance, with many of his competitors doing their best to keep him down or disparage him. That made him very tough and suspicious, and it could be very hard to take if you were on the receiving end, but I understood why he was that way. Those older than me as I was only a teenager at the time were amazed at his audacity in trying to get on the board of San Miguel. A big corporate brouhaha ensued. He never joined the board, but the company had to reform and welcome some true independent directors and reflect proper stockholder representation as a result.
He was also unsentimental about starting, ending, buying or selling businesses as conditions demanded. He was also very frugal in declaring dividends preferring to reinvest and have more growth.
Lastly, he did all this without being a favorite of any administration (though he was not an enemy either) or having a monopoly or exclusive franchise. I asked him how he succeeded during the martial law era without his companies being “acquired,” and his answer was the very key to his success. He said he chose businesses where you had to really apply yourself and have competitors, high volume and low margins. URC had to compete against multinationals like Nestlé and Unilever. Those were tough businesses, so the acquisitive types left you alone. I remember one very profound comment he said to me after I came back from a business trip to Japan in 1991 and told him I was so impressed by what I saw at a car assembly plant even then. He relayed what a Japanese partner told him: “In Japan, we have small houses and big factories. In the Philippines, you have big houses and small factories.” Now we don’t even have those small factories, but we have big warehouses.
I apologize for all the hardheaded and independent thought I displayed while working for and representing you, Mr. John, and thank you for all the opportunities you gave me and for in many ways making me the investment banker I became and developing the exacting standards I have. I learned that from you. The continued success of your businesses is a legacy to your wife and you for raising a hardworking and accomplished family that has ensured continued success. It seems the third generation is on its way to keeping the legacy going, too.
The author is an independent director of the state-run Maharlika Investment Corp.
