Family firms can professionalize operations by hiring outsiders

By Patricia B. Mirasol, Multimedia Producer

FAMILY-RUN enterprises should consider employing outsiders to professionalize their operations, according to siblings who own a local gift shop business.

Papemelroti has started hiring nonfamily experts for its business, according to Peggy Margaret A. Pilapil-Lasa, chief human resource officer and one of the five siblings who inherited the 57-year-old gift shop from their parents Bienvenido and Socorro Alejandro.

“We’ve recently hired an HR professional because compensation is under HR, and that was something we had no idea about how to decide on — even for our employees,” she told BusinessWorld.

“We would just think, ‘Who would we really feel bad about… because they’re hard to replace?’”

The family also started hiring middle management to help with decisions for them and the rest of their more than 100 employees.

Papemelroti, which has 21 branches mostly inside malls around the Philippine capital, opened in 1976 in Ali Mall, Quezon City, and it was the family’s second gift shop after KorBen Gifts, which opened in 1967.

The name comes from the first syllables of the Alejandro siblings’ names — Patsy, Peggy, Meldy, Robert and Tina — who each helped in the business during summer breaks from school.

When the gift shop, which sells postcards, greeting cards, planners, notebooks, letter holders, mugs and personalized gift items grew, Ms. Lasa realized that there had to be a way to evaluate staff.

“I was the one who started writing down ways that we could evaluate them, and so HR became mine even if I had absolutely no training in it,” she said.

Balancing interpersonal and business demands is one of the challenges of family businesses, according to a January 2020 Harvard Business Review article.

Other potential issues include succession, compensation and underperforming executives.

Outsiders can bring expertise not available in the family, according to an article by Fairleigh Dickinson University. Nonfamily managers can likewise run day-to-day operations if no one in the family wants the role.

The rules are not clear-cut in a family business, Ms. Lasa said.

“I’m HR head, but if you have an opinion about it, you can give it. It’s not as if I’m an expert,” she added.

Succession isn’t a straightforward matter either — this is why the family is grateful someone from the third generation chose to work for Papemelroti, Patricia A. Paterno, the company’s managing director, said.

“You pray about succession and how it will go on because it’s a family business,” the eldest of the five Alejandro siblings said.

“I distinctly remember when I prayed and God said to me, ‘Don’t worry, I have a plan,’ and then Elyse P. Juan, my niece, came in,” she said.

As creative director, it was Ms. Juan, Ms. Lasa’s daughter, who pivoted the business online during the coronavirus pandemic.

“We would love to have the other nephews and nieces come in, but they’re busy with their own careers,” Ms. Lasa said.

A family business should offer unique items and have a personality to be successful, Ms. Paterno told BusinessWorld.

“What’s good about our family — and I think maybe a lot of family businesses — is that we have the same mission and vision,” she said.

Back when they had a store in Ali Mall, someone suggested that the family sell products with green jokes to drive sales.

“No way. That’s not the way we wanted our store to be,” Ms. Paterno said. “If you see our products, they’re inspirational. They’re God-centered.”

The family’s vision and mission, she added, is “hands to work, hearts to God.”

“Don’t wait until everything’s perfect,” Ms. Paterno said, noting how her mother started the company more than half-a-century with no capital and no background in business. “What she did have was this passion for making things, and she passed this on to us.”

“Each one of us has God-given gifts. If we can nurture and use it, God will work with us and make our dreams come true. I believe our business is an example of that.”