Family values!

Dilmah is a family business founded on a very simple philosophy: integrity. That dictates our approach to quality, freshness, ethics, the family values in our business. It extends also to our communications for in most cases my father, Merrill J. Fernando, sometimes joined by my brother Malik and I, are shown in our television and print advertising, sharing our story simply and openly.

It’s really quite simple. What surprises us constantly is the number of people who think we are actors, paid to appear in commercials for some faceless company. In trying to think that through, I came to the realization that this is probably not due to anything we are doing wrong, but more to the reality that business has become so faceless, distant and unemotional, that seeing this family talking tea, visiting supermarkets, writing to customers, probably leads to the belief that this cannot be true. True it is though.

My father’s story is well captured by Shalaka Paradkar in her feature in the Gulf News (UAE), Friday Magazine this morning (2nd May, 2008) – http://archive.gulfnews.com/articles/08/05/01/10209908.html. And it is all true!

Family business is the future. If that sounds too optimistic or utopian, let me rephrase it – family business should, and must be the future. You do not need to read Prof. Joel Bakan’s book – The Corporation – to understand the evil that people practice in the name of commercial success, shareholder value and career development, within the faceless but dominant corporations that are today larger than most nations. Interestingly these ciorporations are trying desperately to mimick family companies, through subsidiaries that take on the appearance of startups, by operatying certain acquisitions at ‘arms length’. Ultimately it all boils down to the same thing. The concept of the corporation and the company where ownership and operation are divorced, is a recipe for what Prof. bakan rightly calls a ‘pathological pursuit of profit and power’.

For the sake of our childrens’ future, let’s hope that the cycle advances or the pendulum or whatever it is that determines business cycles, swings, bringing a change in the stranglehold that corporations have today.

1 Comment Family values!

  1. Louise July 23, 2013 at 11:51 am

    Reading your text about passion, wretitn with passion, was a pleasure. As was probably planned by you, text invites to discussion about founders, company owners, dedication, integrity, and all the other complicated matters that create present market reality and the future. I stress the word complicated, because being your loyal reader I pay much attention to all your presented opinions and sometimes feel that you paint the reality in white and black only, forgetting sometimes that life brings many shades of grey too.I agree that the corporate world is much different than the one of the family businesses. The first is based on profit maximization, lie, appearances, reputation management , while the other based on the easily recognizable person-owner who puts at stake his and his family’s reputation which requires integrity, focus on much longer perspective, treating the profit as remuneration for good work, and not the single and most important goal. OK, but reputed family business becomes successful with time. Usually temptation comes to achieve more. More requires funding. Funding is usually given by multiple small shareholders. Not even recognizing it, a family business becomes a corporation or the family loses its business. This happened not so long ago with a jewelry company Kruk in Poland. A family business for 150 years. New family generation developed the business nicely and needed funds for even faster growth. They went public and so much believed that there are no dangers to such a family business that they did not notice a very aggressive investor who was buying their shares. Eventually this investor ran for the enemy take-over and succeeded. As a result the family lost control of the company and ended with something like 3% shareholding.Look at this issue from the perspective of the Illy family. I loved their coffee once, it was delicious, and I agree that Dr Illy was probably the person fully dedicated to quality. But also in their case the temptation came and this family company agreed to a joint venture with one of global corporations Coca-Cola. Nobody knows how much such cooperation would affect the future quality, dedication, integrity of the family business. My conclusion is that the values of the family business are not guaranteed forever. One has to carefully weight his every step, every decision, every spoken and wretitn word. The moments will eventually come, probably many times to future generations of owners of every single family company, when question will have to be asked and answered: do we still want to be a family company standing on the pillars built by the founder, or we agree to become a corporation because we cannot say no to the development temptation?A couple of days ago I had a pleasure of attending a meeting organized by the Fairtrade brand. In spite of media announcements, six people attended, me and my wife included. A young gentleman gave a speech illustrated by a presentation intended to prove how unfair the trade is, and how good a remedy Fairtrade brand offers. Presentation was poor in facts, but gave a lot of demagogy. After presentation a lively discussion started, and all present agreed that developing countries must be given a chance and post-colonial exploitation by the corporations must be finished. All present however were doubtful that Fairtrade brand is the answer. The young gentleman, a nice and passionate person indeed, had no knowledge to answer our very simple questions related for example to the issue of the prices paid to the producers in developing countries. He only declared that the producer gets much more for his produce than would normally on the market, and that covering of costs is guaranteed. I asked if covering costs is enough to allow development, because usually profits are necessary for that, but got no reply. I asked also how it is in case of tea, which usually is traded at auctions. The answer was that he doesn’t know, but surely the Fairtrade branded estates must be selling their teas at auctions as well. He could not explain how in such case a higher price for their tea could be arranged. I do not blame this chap, he tried to do his job properly, but unfortunately had no knowledge. But my feeling after this presentation was that I was subject to manipulation and lie. Fairtrade thought that the presentation will be given to people who know even less than their speaker, would believe him, ask no questions and make decision to accept Fairtrade branded products in their shops, or would by such products for their own consumption. How many people believe in what they say. Their figures about growth and development are impressive! But how many people buying Fairtrade products ask questions, how many try to understand the reality?Who will thus win: integrity or lie? passion or cold profit calculation? quality or media budgets? Do you know the answers?

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