When Teresita Sy-Coson was 5 years old her maternal grandfather, who owned a small shoe store in downtown Manila, would take her to the bank as part of his daily business routine. Recalling the air-conditioned Equitable Bank, she says, “It made me feel good just to be there, waiting for his transaction to be done.”
He would also take her to his store, where she spent hours watching people buy shoes. At age 8 Tessie, as she is still widely known, decided to sell shoes herself. She recalls, “I learned by example. … As a kid you think you are just the same as other adults.”
But that first job also came with a feeling she would never forget. She remembers, “I would, of course, choose the kids to put shoes on, and their parents would ask me how old I was, and they would laugh. I was so hurt.”
Five decades later the 61-year-old Sy-Coson can smile at the memory. She is now a vice chairman of SM Investment Corp., or SMIC, the Sy family holding company and a reigning Philippine family-owned conglomerate.
She has also headed up two of the units that contribute the most earnings to the holding company: For more than two decades she was in charge of SM’s retail operations, which include the most profitable and largest group of department stores in the Philippines, and since 2007 she has been chairman of SMIC’s majority-owned Banco de Oro Unibank, which bought Equitable, the bank she used to visit with her grandfather, in 2007. She is also an advisor to SM Prime, which develops malls.
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The SM group of companies was built by her father, Chinese-Filipino retail magnate Henry Sy. SMIC was created in 2005 when he sold 17.5% of the stock to the public in what was then the biggest offering ever on the Philippine market. The Sy family retains 61% of SMIC, which has a market cap of $9.3 billion, while most of the rest is publicly traded. For the first nine months of 2011 SMIC posted net profit of $335 million, up 14% from the previous year. Consolidated revenue surged 13% to $3.3 billion.
Sy is largely credited with spurring the “malling culture” in the Philippines; an average 3 million Filipinos visit his 42 malls nationwide daily. With a net worth estimated by FORBES at $8 billion, he is the richest man in the country. Now in his late 80s, he is chairman of SMIC but leaves day-to-day operations to his children: Son Harley is president of SMIC and works with the retail group; Henry Jr. is a vice chairman of SMIC and runs the property group; Elizabeth runs the hotels and conventions business; and sons Hans and Herbert are in charge of shopping centers and supermarkets, respectively.
As the eldest of his six children, Sy-Coson is often referred to in the media as her father’s heir apparent, but she sees things differently. She points out that she is not the only one running things, that all her siblings are involved as well. She views her role as more of a manager. “I was not meant to lead the group. Even now I am not leading—I maintain the core.”
But Lance Gokongwei—president of JG Summit Group, a competitor in retail and malls—and others in the business community see her as much more than that. “She’s very well regarded within the Philippines and outside the Philippines,” he says. “She’s proven over time that she’s a capable successor to her father.”
The outlines of Sy-Coson’s life were drawn at birth. She says she was never given a choice of career. “I was just born into a business family. It is really a destiny.” As is sometimes the custom in the Philippines, Sy-Coson lived with her grandparents during her early school years. They instilled in her a strict sense of responsibility, obedience and duty. “I was always told I had to be an example to my siblings. I was told to toe the line,” she says. “So I had to behave.”
Her childhood experiences gave her initiative, drive and dedication. “My father always told us if you want to do something, be the best,” she says, adding with a slightly sly smile, “So when you can’t resign, you make your job better.”
After graduating from Assumption College in Manila in 1970 with a degree in commerce, Sy-Coson hoped to get a master’s degree, but her father had other plans. “He said, ‘Come work with me; it’s the school of hard knocks.’”
At the time her father owned a shoe store in Manila called Shoemart, and Sy’s mother had just started a retail clothing line that was sold in the store. Focusing her efforts on merchandising, Sy quickly doubled their sales. She says, “I guess I just knew what people wanted to buy.” That instinct evolved from a skill the elder Sy was determined to teach his children. “My father always told us to observe a lot. Whether we are here or abroad, we use our eyes. We dissect it and look at what the opportunities are,” Sy-Coson says.
In 1972 Sy asked his then 22-year-old daughter to open his first department store in Manila. The 20,000-square-meter space was considered large at the time and introduced new merchandise as well as fresh concepts in store design and displays. “He asked if I could handle it, and I said yes,” she says, adding, “You don’t know how to be scared when young. You have all the confidence.”
But breaking new ground without clear guidelines and formal training was not easy. “I had a lot of problems with suppliers. We were so new—they wanted me to pay them to sell their items.” Recalling that she had to do a lot of things herself, she adds, “When I felt inadequate, I would read business books, go to [trade] fairs.”
In some ways that early success remains a mystery—even to Sy-Coson. Admitting that she did not know how to plan well, she says she just followed her instincts, worked very long hours and was lucky. “Now that I know how the science works and the numbers work, I don’t know how I did it at the time,” she says.
Being Henry Sy’s daughter gave her a head start, but it also meant she had to work harder and smarter, to battle the preconception that she had inherited the position. She explains, “You have to really prove yourself to get respect. It’s not a matter of sitting on a position and saying this is what we will do. You have to read a lot, understand what is going on and work as a team.”
According to professor Edgardo Rodriguez, dean of business and entrepreneurship at Enderun Colleges, a hospitality and management college in Taguig City in the Philippines, crossing the gender divide, especially in the Chinese community, was another challenge. He says the issue “is seldom mentioned today … but I think it’s still there. Therefore the lady must be better than a male counterpart.” That, he says, “makes her significant in her own right.”
As Sy-Coson’s career evolved, so did the family empire. In 1985 she helped her father launch the group’s first shopping mall, SM North Edsa. In the decades that followed she mainly handled merchandising but would work in whatever areas of the business her father asked her to. “I learned from my mistakes and experiences,” she says. “It is different now, where everything has to be fast. It was slow, steady learning.”
In 1990 Sy-Coson became president of the SM Department Stores unit, now part of the SM Retail group. At the time it had fewer than 10 stores. By the time she stepped down in 2010 that number had more than quadrupled to 42.
In its early years SM Department Stores created marketing, packaging and store displays that were more high-end, but this changed after Sy-Coson visited the U.S. to study the department store boom of the 1980s. “I thought they were doing so well. And then after a while, one went down after another,” Sy-Coson says. Determined not to meet the same fate, she changed her strategy “to target more of below the middle market. We became partly a discount store but in the department store format. We became mass market because we had to survive.”
But with the new millennium Sy-Coson saw a need to change direction again. Technology opened the country to more information, and Filipinos increasingly sought global brands. The SM flagship store in Manila’s Makati business district underwent a complete renovation in 2002.
Today SM Retail consists of 144 stores—42 department stores and 102 stores in its food group—and had sales of $2.4 billion in the first nine months of 2011. But Sy-Coson declines to take any credit. “There is no such thing as free will if you have a family business—unless somebody wants to do your job,” she says, adding, “Retail is tough work and too detailed; it’s not that I was special but that no one else wanted to do what I am doing.”
In the 1990s Sy-Coson turned her attention to the family’s retail and savings bank, Banco de Oro, which at the time was 13th in the nation in terms of assets. Sy-Coson approached the business as she would a department store, making efficiency and the needs of the consumer central to her strategy. She studied other banks and decided to do things differently, adopting a mass-market strategy with the goal of serving more people. That included longer banking hours, opening on Saturdays, putting branches in malls, introducing new products and services, and targeting smaller businesses. Up to that point in the Philippines banks had largely targeted the elite.
According to Gokongwei, her ability to approach situations from different perspectives is a huge strength. He says, “I think she has high standards. She’s very detailed. … She has a very strategic viewpoint, but at the same time she’s very down to earth.”
By 1996 Sy-Coson had transformed BDO from a savings and retail bank into a universal bank, one that offers corporate and retail services as well as investment banking. By 2006 it was the fifth-largest bank in the country. But she wanted more: “Everything was smooth, but we were still small.”
In 2004, when prices were falling on the Philippine Stock Exchange, Sy-Coson suggested the family buy into Equitable, then the third-largest bank in the country. BDO acquired a 24% stake in 2005, but the move encountered strong resistance from some of Equitable’s shareholders. She had not anticipated that a smaller bank buying into a bigger bank would be perceived as suspicious.
Sy-Coson says it was the most challenging time in her career: “I was always criticized in the paper. There were lots of boardroom battles and intrigues.” She felt unable to back out of the investment without harming her family’s reputation, so she forged ahead. By 2006 BDO had built its stake to 35% and an agreement was negotiated, with BDO merging with Equitable in 2007 to form Banco de Oro Unibank, creating the number two bank in the country.
As chairman Sy-Coson has grown BDO Unibank’s operations aggressively. By 2008 it was the number one bank in the country, a position it continues to hold, with assets of $23.38 billion as of 2010. SMIC owns 58% of the bank, while most of the rest is publicly traded.
Cesar A. Mansibang, registrar of Ateneo Professional Schools in Manila and an M.B.A. professor, says one reason the bank has been so successful is, “There’s a natural flow of funds from the various SM [companies], which are big-ticket items, to BDO.”
Gokongwei puts the bank’s quick rise to the top in perspective: “Twenty years ago who ever heard of Banco de Oro? Now it’s the largest bank in the Philippines. That’s not easy to do in the banking sector.”
According to Lydia C. King, who worked with Sy-Coson at BDO as first vice president for technology, she was a “very dynamic but practical and a hands-on leader. She exhibits a democratic management style allowing officers to express themselves and participate in the decision-making process.”
That democratic approach can also be seen at home, where she plans to give her three children—ranging in age from their late teens to mid-20s—a choice she never had. “There are just two milestones: At 25 they have to start working. At 30 they have to make a choice for their future—whether to build their own career or join the company,” she says.
Sy-Coson, whose husband, Chinese lumber tycoon Louis Coson, died in 2003, says that if she had the luxury of both free time and choice she knows exactly what she would do: “I would like to retire and study architecture. I like to build buildings—and I want to build my own—and a tall one.”
But until that day she is likely to let the momentum of her life continue to direct her: “I don’t sit long enough to say how much I have accomplished, because for me that is not good,” she says. “I don’t dream that much. I just keep on rolling.”
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February 29, 2012
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