In mid-January, I visited Taiwan, and in the months preceding that trip, I had been there multiple times—not for leisure, but for business observation. What I encountered was neither alarm nor overt military displays, but something far more revealing: a quiet, methodical approach to corporate readiness.
The Quiet Preparation in Taiwanese Boardrooms
Across boardrooms, executives were actively discussing potential disruptions to supply chains and logistical bottlenecks. Chief financial officers were rigorously stress-testing liquidity under various scenarios, including 30-, 60-, and 90-day disruption periods. Meanwhile, business families were meticulously reviewing succession plans, decision-making protocols, and frameworks for operational continuity.
This preparation was not driven by a belief that conflict was unavoidable, but rather by a recognition that uncertainty itself is a constant threat. This experience vividly reminded me of a leadership case I handled in another Asian country, which I will anonymize to protect confidentiality, but whose lessons are timeless and especially pertinent for next-generation chief executive officers (CEOs) ascending to senior roles.
A Family Business Case Study: The Ivy League Successor
The company in question was a family-owned trading enterprise, heavily reliant on imported goods and operating on tight shipment schedules. Margins were razor-thin, inventory turnover was unforgiving, and missing a narrow delivery window could wipe out an entire year's performance.
Operations were led by the founder's son—a next-generation CEO with an Ivy League education. He was intelligent, articulate, confident, and decisive. On paper, he seemed fully prepared, having mastered the business's numbers and carrying the prestige of an elite academic background.
The Growing Gap in Next-Generation Leadership
However, this case highlights a widening chasm among many next-generation CEOs today. While credentials are plentiful, a deep, lived understanding of history and adversity is frequently missing. Many successors have never faced scarcity, prolonged crises, or existential threats, inheriting instead systems that function smoothly, stable markets, and well-established organizations.
This is where founders must play a critical role. Beyond transferring shares or titles, they need to instill in their successors the discipline of comprehending the past—how the business survived its toughest moments, how close it came to collapse, and what uncertainty truly feels like when margins vanish and options dwindle.
Leaders who fail to internalize history are likely to repeat it, often under new guises and circumstances.
The Cost of Overconfidence in Geopolitical Risks
As geopolitical risks intensified along a major global shipping route, logistics partners and external advisors issued clear warnings. Insurance premiums were climbing, freight reliability was worsening, and alternative routes were suggested. Contingency plans were laid out explicitly.
The CEO dismissed them all. His reasoning was calm and assured: "Major powers will secure the route. The ships will pass. There is no need to overreact." This was not a reckless decision; it was a confident one, and that was precisely the issue.
Swift and Painful Consequences
The disruptions did not subside. Shipping slowed, delays compounded, and goods arrived weeks late—well after the peak demand period had ended. Inventory sat idle, customers moved on, and the market did not wait. The fallout was rapid and severe: revenues dropped by approximately 30 percent in a single cycle, supplier and distributor confidence eroded, banking discussions became tense, and the board had to intervene. Within months, the next-generation CEO was replaced by an experienced professional executive.
This was not a failure of intelligence or education. It was a failure of situational humility—the ability to acknowledge, "I may be wrong, and the cost of being wrong is too high not to prepare."
Redefining the CEO Role in Uncertain Times
Whether one graduated from an Ivy League institution or not is irrelevant. Once in a senior leadership position, the true requirement is a sharp ability to anticipate risk without succumbing to alarmism.
This case reveals a deeper misconception about the CEO's role. A CEO's responsibility is not to project certainty or defend assumptions, but to look ahead, reflect on the past, and mobilize people to execute effectively amid uncertainty.
History demonstrates that markets do not wait for certainty, and crises rarely announce themselves neatly. Leaders who insist on clarity before acting often find that clarity arrives too late.
The Ivy League-educated successor did not fail due to a lack of confidence. He failed because his confidence overshadowed preparation.
The lesson is unequivocal: Uncertainty does not destroy businesses; unprepared leaders do.
Professor Enrique M. Soriano will delve deeper into these leadership and governance themes in his Governance Masterclass at Vivere Hotel in Alabang, scheduled for 9:30 a.m. on March 28, 2026. For reservations, interested parties can contact Christine at +63 9173247216.
