Family business: Blessing or curse?
Family business is always a very slippery topic, not many writers would touch it and those who do write about them tend to shy away from the pertinent issues involved. You don’t know what type of emotions you may evoke until you really do. I am writing this article not for any particular personal satisfaction but just as a series of observations made out of life experiences. Having said that, I have to say that I do have personal prejudices in relation to this topic but I promise to try as much as I can to keep my biases at bay.
So… Family businesses – Well, most family businesses never survive beyond their first generation (about 44%). We know of the late Nigerian business mogul Moshood Kashimawo Abiola, who at one point was believed to be one of the wealthiest men in Africa. He successfully built one of Nigeria’s biggest business empires consisting of an airline, a chain of newspapers, extensive real estate, fisheries and retail. After his death in 1998, his businesses crumbled. None of them exist today. (Forbes) But still, we also know of family businesses that have withstood the “family curse” and thrived for generations. Most of these businesses are in the Western world. In Africa… Not many.
Mfonobong Nsehe, in his article, published on Forbes “The 10 leading family businesses in Africa” lists the following as the top family businesses in Africa:
- Remgro – South Africa
- Pick n Pay – South Africa
- Dantata Org. – Nigeria
- Ibru org. – Nigeria
- M. E. T. L – Tanzania
- Bakhresa Group – Tanzania
- Bidco Oil – Kenya
- Madhvani Group – Uganda
- Ramco Group – Kenya
- Kenyatta Family Business– Kenya. Forbes 2014
So how does a family business like Remgo get to survive for generations while others never live to see their 5th birthday? The answer scales back to leadership, idea execution and results monitoring (not in any particular order)
1. Management (Execution) For a family business to work, the management has to be carefully selected. It’s very advisable for the management to come from outside the family circle. This will enable proper monitoring of the business operations. We all have a conspicuous bias towards family whenever put in compromising situations. Not many of us have the audacity to “tell off” family when the situation demands, but we are always fast at passing the blame onto someone else who is not a relative…Not a bad idea for the family bond. Afterall, what’s family for? When it comes to a complete stranger, we always tend to sober up and make sound decisions on management.
2. Monitoring (Results) When it comes to monitoring, I believe that it is always important to have one family member selected on merit to monitor the business. In as much as the management may be competent in what they do, we all need some checks and balances, and occasional correction on major issues we undertake. A family member is already fully vested in the business partially due to the capital input, and will obviously be on the lookout for the rest of the family. It’s always a good idea to select someone who is well versed with the business line in question and equip them with the right authority and resources meant to achieve that endeavor. Avoid duplication of responsibilities and avoid family overrides when it comes to decision making. Let the business take its own course.
3. Leadership (Idea generation) We are talking about a family business because the vision bearer and the capital inflow to the business comes from family, in one way or the other. Who else understands the business more than the vision bearer? He knows where the business has been, it is and where he envisions it to be. it’s very Paramount that the vision bearer gets highly involved in the business. If the business idea emanated from the whole family, then leadership has to originate from right there. We should have an all-inclusive board complete with company executives just to make sure that family wrangles don’t get into play-they always pop up everytime. Money has a way of corrupting the best of people. As the business starts to grow, money gets into our heads. Family wrangles always kick in leading to “irreconcilable” differences that obviously end up hindering the success of the business. Breakups ensue and the once thriving business is no more, all left is the never ending blame game. So… You still wanna know why family businesses never see their 5th birthday?
