Refounding: returning to our beginnings

The Philippines is grappling with a deepening sense of uncertainty. Disclosures of massive corruption in government infrastructure projects, combined with cracks in national leadership, have triggered public frustration and shaken investor confidence. Global turbulence — geopolitical tensions, rising protectionism, and economic slowdown — adds to a bleak horizon. Companies face a dual challenge: surviving the external storm while preventing internal drift.

This is where the concept of refounding, developed by John Iwata of the Yale School of Management, becomes not just relevant but urgent. Refounding is the disciplined act of reconnecting an institution to the values, purpose, and strategic clarity of its early — and often most vibrant — years. It is a way of anchoring organizations so they do not lose their identity in the midst of chaos.

But refounding is more than introspection. It is a strategic response to turbulence.

Historically, periods of crisis have triggered great refoundings:

• IBM refounded itself in the 1990s, confronting existential collapse after years of drift.

• Starbucks refounded during the 2008 financial crisis, returning to coffee quality and founder-led culture before expanding globally.

• Ford refounded in 2006, sharpening its mission and avoiding the government bailouts that hit other automakers during the recession.

In each case, geopolitical and economic shocks did not push these companies to retreat. Instead, leaders returned to their founding essence to chart a forward-looking path.

When institutions around you fail in integrity, the strongest counter-strategy is to strengthen your own. When governance collapses in politics, the best defense is governance excellence within your firm.

Refounding answers these challenges by clarifying:

• what you stand for;

• why you exist;

• what values you refuse to compromise; and

• what capabilities uniquely define you.

In a weak-governance environment, companies that operate with clarity and purpose gain trust — especially when public institutions lose it.

Many executives respond to turbulent times with the familiar call to “go back to basics.” While useful, this is largely operational — tightening execution, cutting costs, improving service.

Refounding is far deeper. It asks: what truth must we remember so that we can move forward with confidence — even when the world around us is unstable?

When corruption scandals shake the foundations of national governance, when unpredictability becomes the norm, companies must find stability elsewhere. That stability will not come from the outside. It must come from an internal re-anchoring — a renewed sense of identity and mission.

THE SAN MIGUEL EXAMPLE
San Miguel Corp. (SMC) illustrates how refounding can help companies rise above national dysfunction. While SMC started as a brewery in 1890, its remarkable transformation into a conglomerate spanning food, power, energy, tollways, and airports seems almost incongruent with “returning to origins.”

But SMC’s true origin was never beer alone. Its foundational strengths were: a) scale, b) nationwide logistics mastery, c) brand trust, and d) a philosophy of community engagement.

These principles allowed SMC to move into essential systems such as power grids, tollways, and infrastructure — areas ironically plagued by government inefficiency and corruption. SMC’s expansions filled gaps in national development, partly because the company refounded itself on the belief that private institutions can play a decisive role in public progress when state capacity weakens.

Thus, SMC’s diversification is itself an act of refounding. Its ventures remain consistent with its original impulse: to build systems that move the country forward, especially in times when public institutions falter.

REFOUNDING AS AN ANTIDOTE TO DISTRUST
A bleak economic scenario marked by corruption and leadership vacuums creates major risks for companies. These include erosion of public trust, unpredictable policy environments, and moral decay within organizations.

All three can be mitigated by refounding.

Refounding forces companies to reassert their ethical core — not as PR, but as a survival strategy. When trust in the public sector declines, society looks for integrity somewhere else. Institutions that embody transparency, governance rigor, and authentic purpose become magnets for talent, investors, and customers.

In a country struggling with government accountability, a company with a strong identity and clear values becomes a rare source of credibility.

When national leadership becomes erratic or compromised, organizational leadership must become steadier. Refounding strengthens leadership in two ways. It clarifies decision-making, because leaders operate from core principles rather than reacting to politics. It grounds leaders morally, reminding them that integrity is not situational — even if the nation’s leaders appear to waver.

The challenge for Philippine institutions is not merely to keep operating — it is to keep believing in their purpose amid a climate of cynicism.

This is the paradox that refounding solves. It restores optimism without ignoring reality. It rekindles ambition without abandoning prudence. It empowers companies to evolve without losing themselves.

In a period when corruption scandals undermine public trust, and when governance questions cast long shadows on the economy, the companies that will endure are those that look inward not to retreat but to regenerate.

Ultimately, a company’s founding idea is not a relic of the past — it is the anchor that steadies it when the nation around it is shaking.

And in these turbulent times, institutions that are deeply rooted can grow even stronger — not despite the chaos, but because they know exactly who they are.

The views expressed herein are his own and do not necessarily reflect the opinion of his office as well as FINEX.

Benel Dela Paz Lagua was previously EVP and chief development officer at the Development Bank of the Philippines.  He is an active FINEX member and an advocate of risk-based lending for SMEs. Today, he is independent director in progressive banks and in some NGOs.