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Welcome to Innovate Africa With Dotun Adeoye

Infinite, sustainable growth ideas and examples for strategic thinking executives every Sunday

THE BLOG

Innovate Africa With Dotun Adeoye Every Sunday

Infinite, sustainable growth ideas and examples for strategic thinking executives every Sunday

Standing The Test of Time

STANDING THE TEST OF TIME

What happens to the business when its founder dies or is incapacitated?

It usually results in a leadership vacuum in the businesses, a power tussle, and survival and continuity become highly threatened which may lead to the liquidation of the business.

The survival rate of most businesses beyond the founder’s generation is extremely low. It has been found that globally 33% of family businesses have survived past the first generation (the founder) onto subsequent generations. However, in Africa, only 2% of family businesses last past the first generation.

I am using three case studies from Nigeria, Kenya and Zimbabwe here. The late Nigerian business mogul Moshood Kashimawo Abiola, who at one point was believed to be one of the wealthiest men in Africa, 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 exists today. One can only imagine what it would be worth today if it was still running.

Tuskys Supermarket Chain, once a giant retailer, crumbled two decades after the death of founder Joram Kamau. The Kenyan supermarket chain was one of the largest in the Great Lakes region and would have easily competed with Shoprite today. In 2016, Tusky’s Supermarket chief executive was ejected from his office unceremoniously by the heirs to Tusky’s empire.

Some of the reasons that contributed to the collapse of the multi-billion supermarket, which had several branches, include sibling rivalry, internal fraud, aggressive debt-fuelled expansion, and fierce competition.

Another example is Shoeshine Buses of Zimbabwe, which was owned and founded by P Hall. When he died in 1988, the company had 62 buses. After two years, the number had gone down to 55, and in 2009, no buses or companies existed.

You may be wondering how this applies to you and your business. If you are a business owner, then you should be very concerned when you hear of such statistics. It means you may fall under the 98% of failed family businesses that are currently on the continent. Your company might be thriving at this moment, but if you have no succession plan, it is 98% guaranteed that your business will no longer exist once you exit that business, either by incapacitation, illness, retirement or death.

All businesses should have a succession plan, not only to ensure an orderly transition but one that can be implemented following any unforeseen calamities. At the very least these must include essential components such as digital legacies including login details, passwords, access to email correspondence and cloud storage as well as financial essentials such as access to bank accounts and up-to-date information on assets, liabilities, debtors, creditors, payment schedules and more.

Founders and leaders who have developed successful businesses over time want to know that their businesses will thrive after they’re gone—that the legacy they’ve created will neither be eroded nor lost.

So why not talk to me so that my team at Innovate Africa with the experience and expertise of helping businesses to ensure the safety and continuity of business?

Let us have a chat to talk more about this

#strategicbusinessgrowth #5pillarsofbusinessgrowth #successionplanning #businesscontinuity

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Innovate Africa

With Dotun Adeoye

Every Sunday

DAWS 5

 Teaching business leaders how to grow their businesses & leave their legacy.