Salman Dantata, founder & CEO, Stata Power Utility talks about family and business in a new weekly BusinessDay series.
The Dantata family has been in business since 1877 which is a really long time ago and I think the business started with selling groundnut and Kolanut. How has that been so far? Is that still the family line of business?
We are quite a big family and as you rightly pointed out my great-grandfather was a great entrepreneur and started the business empire. He was into trading of groundnut and kolanut in the early 1900s through the colonization period. Ever since, different members of the family have gone into all sorts of businesses in different sectors.
The most prominent entrepreneur and leader of the family is Aminu Dantata, who is into real estate and many other sectors. There are many other successful entrepreneurs within the family. So really, we do have a tradition of going into business and we are really an entrepreneurial family.
Tell us about your role in the family business. Did you ever get involved at any point? Was it something you always looked forward to joining?
Typically, we don’t join our family businesses so early into our career. So no, I’ve never joined my family business but that could happen in future. We typically go in later, once we’ve got a bit of experience. Right now, I enjoy what I am doing and hope to grow my own business.
In terms of working in other industries, are there pros and cons? Do you think there are any advantages of working outside before getting into the family business?
Everything in life is better with experience. Therefore, it’s always good to work under seasoned professionals in whatever industry you’re working in. Working outside the family business allows one to grow naturally, in an objective environment, where merit prevails.
You grew up with the family business around, do you feel any pressure or obligation to join the family business?
There’s no pressure at all. Those who choose to join the family business can do so but I just chose to go on my own, having gained some experience in the power sector in Nigeria for a bit.
You moved on from your family firm to set up your own business thereby continuing the tradition of entrepreneurship, can you tell us a bit about Stata power utility?
Actually, that’s my second company. I started my first company in 2015. I’ve always had a passion for entrepreneurship, growing up in the midst of so many entrepreneurs within the family; it’s easy to be inspired.
I have learned quite a lot about the power sector and started a company, which was into electricity meter supply and manufacturing. It was a reasonably successful venture. I later established my current company, called Stata power utility, which is a company that focuses on the distribution subsector of the power sector in Nigeria because I like challenges.
The power sector is the most challenging industry in this country, with the distribution subsector being the most underdeveloped. As you know, our power sector is going through so many challenges and we have one of the worst power deficits in the world largely because of the distribution sector issues. Although we have a lot of generation capacity, a lot of it is stranded. For the power we do actually generate, the distribution companies, essentially the downstream sector, lose a great share of their revenue to ATC&C losses.
Due to the challenges in the downstream sector, I decided to delve into the distribution subsector, as my desire is to be part of the solution to turn around the most critical part of the sector.
It’s true that one is expected to live up to the heights that previous generations have set but from a personal perspective, I rather look at my family’s achievements as an inspiration
So basically, what the company does is approach distribution companies to try and help them turn around portions of their distribution network. A concession model essentially. This is a concept that worked quite well in India, as you’re basically decentralizing the sector and also breaking it down by creating more value steps within the industry. The distribution company goes from being downstream to midstream and allows third party companies like mine, who can ring fence projects and raise funding and try to turn around these dilapidated structures.
I’m still early into these projects but it’s exciting and there’s a huge social aspect to it. There’s so much hanging on to the power sector from agriculture to education and so on.
I started a book recently by Kristin Keffeler which talks about the myth of the silver spoon and highlights the fact that children from affluent families or children in big family businesses tend to face anxieties and pressures because everyone expects them to succeed. Many of them have issues with the fear of falling short of family expectations. Do you feel this pressure and if you do, how do you cope?
It’s certainly true that you do feel pressure with the expectation. However, the truth is, with the kind of family I come from, we’re very content and very focused which makes it all easier to deal with such issues. It’s true that one is expected to live up to the heights that previous generations have set but from a personal perspective, I rather look at my family’s achievements as an inspiration.
There have been so many success stories from my family and I use these as motivation to fuel my ambition as opposed to allowing it to get in the way, but of course, it isn’t a myth that pressure does exist.
I saw some data recently that showed that on the fortune 500 list, about 175 of them are family businesses which says a lot about the importance of family businesses in an economy. So your family has been in business for a long time, are there unique characteristics that set your family apart from other business types? Is there a unique Dantata way of doing business?
One thing that really goes a long way is our goodwill. We’re really honest and hardworking people. Unfortunately, Nigeria is a country where dishonesty flourishes. I feel we’re really hard-working people, so we do have a lot of goodwill, we are very content and at the same time very ambitious.
The younger generation aspires to and even outdo what the older ones have done. We are not the kind of family, where the younger generation lives on the success of the previous generation. It is instilled in us to make it on our own, although privilege exists. I think that’s part of the reason why there are so many success stories from our family and our businesses keep going from generation to generation. That’s wealth.
You’re from a large family, with several siblings and cousins, how do you make it work without family feuds?
In every big organisation, whether it be family or company there is a clash of culture or personal values and so on but like I said, we’re a family that has a lot of togetherness. We see ourselves as a team and a clan and are always looking to help each other just as it should be.
If only the whole country acted in a similar manner, whereby we help each other and celebrate the success of one another.
Do you think that the idea of people or families who started a business, staying in the business is a source of competitive advantage versus hiring a professional business manager?
There are pros and cons to both situations, being an owner, it means more to you. An employee will never care about the business as much as an owner. So really, from that perspective, in terms of giving one’s all for a company, I don’t think an outsider will ever put as much into a company as the owner.
However, an outsider might bring perspectives different from someone that started the company and might be a bit more objective, seeing as they don’t have any sentiments and biases towards the company.
I don’t think there’s a wrong one as we’ve seen all over the world and not just Nigeria that both work. As I said earlier, with regard to our family, we try to have the younger generation go out and learn the ropes before coming back to take over the family business.
Privately held wealth has great potential to benefit society but only if held by people who are willing to do good with it. How does the Dantata family do good with their wealth?
We are philanthropists. My grandfather does a lot in Kano and all over the north. We empower people through education and employment and in some circumstances we feed people.
The principle of empowerment in this context is to enable one to be independent and fend for themselves. As my father always tells me, it’s always better to teach a person to fish as opposed to giving them fish. So, we empower people in different ways whether through work or education and we do that within and outside the family.
What is your philosophy about being a better leader and how do you carry others along given that you have launched two businesses already?
You have to be empathetic to people. You have to build an environment and structure for growth within your company, and that is not just financially but you would want your staff to essentially grow professionally as individuals within your company. That way, there’s a sense of ownership for those people that come into your company as well. Otherwise, if that doesn’t exist then you’ll never have motivation from people to give their best.
How do you define wealth?
Wealth has so many definitions, but I suppose in this context, I presume you’re referring to financial wealth. For me, it is the abundance and availability of financial resources and the ability to maintain or grow that level of resource for a long period of time. Sustainability is key.
What is the best financial decision that you have ever made?
The best financial decision I’ve made really as a young person, early into my career was to use all my funds to build myself and my career. So really, I’ve had that focus to keep funding my business and myself as opposed to buying a house, or a car.
I have always had that focus and ambition and inspiration from my family and beyond, to just really grow something that one day I can look back and say I did this. So I put my money in my future basically.
Did the funds come from pocket money, savings or grants?
I worked for a bit. I worked in Nigerian Bulk Electricity Trading and of course coming back from the university in the UK, I saved up a bit of my pocket money and really any money I got, I put towards my business.
I did really well with my first company and made a bit of money and thankfully, I’ve been able to set up this company and although we’re not there yet, things are going well.
So what’s the most important lesson you’ve learned about money?
Money is important. However, in business, when trying to make money, it’s always good not to be too profit-oriented. One has to focus rather, on the value that they’re creating, as that value in time will definitely turn into money.
So I’ve learned not to be too focused on the money, but more focused on the value creation.
What does a typical day look like for you?
With the “new normal” forcefully brought about by COVID, most of my work is remote, involving a lot of conference calls with my team. I’ve got team members all over.
We are in the project development stage at the moment, so we have a lot of back and forth but in the near future, once we have progressed with our project, I’ll need to do more on-the-groundwork – going to the project sites and stuff but at the moment It’s mainly back and forth with the team members, and discussing with our financiers, technical partners, and of course, the distribution companies and other stakeholders in the sector.
Do you read books?
I read books, but I prefer to watch – especially documentaries.
Do you have any favourite quotes that you’d like to share?
A quote that I like is “Do unto others as you would have them do unto you”, which is referred to as the “Golden Rule” and a great moral principle found in every civilization and common to every religion. It’s always great to treat each other without discrimination or ulterior motives, especially coming from the kind of country where we have people from different backgrounds.
Do you have any advice for young people who are into family business?
If one is not starting from other companies to learn the ropes and you’re starting from your family business, I would say the best thing is to start from the bottom regardless.
Learn the ropes, be down to earth and learn from people that know better than you before eventually leading.
So what you’re saying in essence is that one of the ways that a next-generation family can create legitimacy around their positions in the family business is for them to start from the ground up so that they’re not being viewed as the boss’s child?
Exactly.
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