• Monday, December 04, 2023
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My Family My Business

[vc_row disable_element=”yes”][vc_column][vc_custom_heading text=”Cultivating a Culture of Collaboration across Generations” font_container=”tag:h2|font_size:2.5rem|text_align:center” el_class=”title-header”][vc_column_text]

October 4, 2022

[/vc_column_text][bs-social-share style=”outline-button-no-text” colored=”0″ sites=”facebook,twitter,whatsapp,pinterest,linkedin” title=”” show_title=”1″ icon=”” heading_color=”” heading_style=”default” title_link=”” bs-show-desktop=”1″ bs-show-tablet=”1″ bs-show-phone=”1″ bs-text-color-scheme=”” css=”” custom-css-class=”my-shared” custom-id=””][/vc_column][/vc_row][vc_row disable_element=”yes”][vc_column][vc_single_image image=”678979″ img_size=”full” add_caption=”yes” alignment=”center”][/vc_column][/vc_row][vc_row disable_element=”yes”][vc_column][vc_column_text el_class=”center-text”]There are approximately 145,000 high net worth individuals (“HNWIs”) in Africa, with combined wealth holdings of approximately $800billion[1]. This number is expected to grow by approximately 36% over the next decade[2]. Despite this large amount of wealth on the continent, most wealthy African families struggle to transfer their businesses and wealth across generations: only 2%[3] of Nigerian family businesses survive beyond generation one, compared to 33% globally.

As the poverty capital of the world, with over 422m people living in absolute poverty, Africa lacks a social safety net. Education no longer serves as a guarantee of financial security or earning power. Family businesses serve as our safety net: with over 90% of indigenous businesses as family businesses, they are the engine of our economy. Ensuring multi-generational success means that our next generation of rising Africans will be shielded from abject poverty, with access to food, shelter, housing and access to capital to start their businesses. Therefore, it is imperative that we create wealth that acts as a safety net for future generations to come.

The critical success factors of business families are the 3Cs: clarity, communication and collaboration. To successfully transition power to the second generation, we need to cultivate a culture of collaboration across the first and second generations. Unfortunately, this can be particularly challenging in Africa due to a commonly observed wide divergence in perspectives between generation 1 and generation 2 compared to other jurisdictions: Founders tend to be more interested in values, heritage and history, whereas NextGens tend to be more interested in changing the present, to shape the future.[/vc_column_text][/vc_column][/vc_row][vc_row disable_element=”yes”][vc_column][vc_single_image image=”679033″ img_size=”full” add_caption=”yes” alignment=”center”][/vc_column][/vc_row][vc_row disable_element=”yes”][vc_column][vc_column_text el_class=”center-text”]This wide divergence arises as the first generation typically builds the business from scratch. They often have transitioned from poverty to wealth. The second generation on the other hand grew up with a certain level of affluence, which gives them a completely different perspective to their parents: They may have schooled abroad, exposing them to a lot of Western influences, so their parents may criticise their Western-influenced ideas as not applicable to the family business. This can create huge challenges in collaboration between the generations.

Founders are likened to immigrants to wealth[4], they carry their home country inside them, as part of their heritage, including its values and attitudes. They believe it is key to their success, as it was in their home country that they learned key skills such as grit, tenacity and hard work. In contrast their children (“NextGens”) are like native-born citizens to wealth. As a result, founders may have some of the fears that immigrants typically face – a fear of “the dark side of wealth” (Willis 2003). They may be concerned about the children assimilating to a new culture: Will this wealth eliminate their motivation and absolve responsibility of the NextGen? Will this good fortune change them in a bad way? As a result, founders tend to resist change more than NextGens: NextGens tend to want to implement more technology and professionalise the business, whereas founders tend to hold on to history and the way that things have always been done.

Furthermore there are cultural influences that hinder collaborating across the generations. Whilst Africa is a very diverse continent, most ethnic groups are still male-dominant. In addition, there is a huge emphasis on age; older people are not to be questioned. Family business leaders are considered almost like demigods, which makes it difficult to create a collaborative environment.

Therefore the challenge of our day is African families learning how to collaborate effectively across generations: for the first time in history we are seeing up to 5 generations co-existing, due to rising life expectancies. The critical success factors of business families are the 3Cs: clarity, communication and collaboration. More than ever before, families will need to ensure that they have strong conflict management skills, communicate, compromise and demonstrate compassion at greater levels than ever before.

Furthermore demographic trends point to a rising incidence of millennials in the workforce: Most NextGens are Millennials, and they tend to have specific attitudes and expectations of their work. Family Business Founders that see their NextGens as critical human capital, and create work environments that are appealing to them, will have a competitive advantage.

Founders tend to expect deference to their authority, whereas NextGens believe authority figures must earn their respect. They desire to be listened to and desire collaborative environments not hierarchical ones. NextGens want to know that their work is tied to a higher purpose, making a positive impact on the world around them. So the onus is on founders to create purposeful work that NextGens find interesting, otherwise they may be tempted to leave the organisation: Founders tend to be more loyal to organisations, coming from a generation that typically worked for just one employer in their lifetime, whereas millenialls on the other hand are less loyal.

Creating a culture of collaboration does not equate to one of permissiveness. It is advisable that the family comes up with policies on entry criteria for the NextGens into the business such that the family business attracts talent, and is not a fall-back option for NextGens that have very few opportunities outside of the family business.

NextGens are the central turning wheel in the sustainability of the family enterprise, the future of the family business. Therefore founders need to ensure that the family business is an attractive option to the NextGens. Family Business Founders need to focus on attracting and retaining talent, both within and outside of the family. Talented NextGens are likened to prospective suitors – they are attracted by outer beauty, however they remain in the relationship because of inner beauty – culture, work opportunities and room to make an impact.
[/vc_column_text][/vc_column][/vc_row][vc_row disable_element=”yes”][vc_column][vc_single_image image=”679035″ img_size=”full” add_caption=”yes” alignment=”center”][/vc_column][/vc_row][vc_row disable_element=”yes”][vc_column][vc_column_text]What are your 5 go-to tips for running your business?

  1. Manage your mindset – it’s the most important asset you have. Seek to have an abundance mindset and a learner’s mindset. You will fail, but that does not make you a failure. Seek to see the positive in all situations.

  2. Be tenacious – being a business owner can be blood, sweat and tears and often requires consistency.

  3. Be clear on your strategy. Spend time seeking clarity on what your strategy should be before taking action. When driving a car and seeking to get to a destination, direction is more important than speed.

  4. When it comes to execution, be obsessive with measuring outcomes, so that you know what is working and what is not. In saying that there are many important things that cannot be measured: Activity is not the same as impact.

  5. Create accountability structures either through peers or a mentor to ensure you are on-track.

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What You Really Should Know About Creating Change

[/vc_column_text][/vc_column_inner][vc_column_inner width=”1/3″][vc_single_image image=”687180″ onclick=”custom_link” link=”http://mypodcast.com”][vc_column_text]listen[/vc_column_text][/vc_column_inner][/vc_row_inner][vc_row_inner el_class=”card-row”][vc_column_inner][vc_column_text]

by Nike Anani | Sep 17 ,2022

Change Creators make their mark confidently whilst empowering others. However, on their journey to change creation, they may encounter change killers: things that may sabotage their change initiatives and lead to a very frustrated change champion!…

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