Episode 3

How Businesses Can Survive Through Generations

About the guest

Nike Anani is an entrepreneur, consultant, and a top-rated family business expert, with a Family Business and Wealth advisor qualification from Family Firm Institute. With over a decade of family business expertise in Nigeria, Nike helps owners lead their family organizations to long-term impact and legacy. Her inside experience as a second generation family business owner birthed a passion to help other families in building legacy enterprises that would outlive them. Nike is the co-founder of African Family Firms, a pan-African association of family businesses, and the host of “The Connected Generation” podcast.

 

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In the ever-changing world of today, it can be tough to make our businesses last. But there is a way to make them stand the test of time. 

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We’ve all heard these kinds of slogans before: ‘Join our company, we’re one big family!’ It has pretty much become a marketing platitude. However, there might be something behind that concept of the business family. Nike Anani, entrepreneur, consultant and co-founder of African Family Firms tells us about a very specific style of leadership. And about a quote that changed her life: “It was a quote by Stephen Covey – ‘Seek first to understand then to be understood.’

Nike goes on to say that “in the past there was a lot of what we term as positional leadership, where the source of a leader’s power was derived from the title, so: ‚Do as I say because I am more senior‘. It harkens back to a very firm kind of military style culture.”

This traditional form of top-down leadership that Nike describes is still persistent today. But why? To answer that question, it is worth looking at an economy that’s been developing rapidly… with family businesses at its center.

 

Family Business in Nigeria

Nigeria is the biggest economy in Africa. Like the rest of the continent, the country still faces an uphill battle. Traces of colonial oppression are still deeply felt. Continued economic exploitation, not only by Western countries, is ubiquitous and poverty remains rampant. One major roadblock to lasting, independent prosperity is that many family businesses in the country can’t seem to stay alive.

Nike explains that “a lot of family businesses in Africa, in Nigeria specifically, actually constitute the engine of the economy, like in Germany and in most countries globally. But unfortunately we haven’t seen as much multi-generational sustainability. 98% of family businesses will fail to survive once the founder passes away. So it’s just 2% that survive. For the longest time, I thought it was the high risk environment, the economic environment, the political environment that led to the collapse of these businesses. But I’ve come to realize that that’s not the true reason. A lot of the time, it is really due to the lack of a coming together of a family.

A lot of family companies in Nigeria are built around the founder. The head of operations who holds all the information and all the power – exercising positional leadership.

And what’s more, there’s no real succession planning, meaning once the founder isn’t able to run the company anymore the business becomes like a car without an engine. “There’s a lot of key man risk or key woman risk,” Nike says. “Decisions are not made in absence of the founder. And the worst happened to a friend of mine: Her father was in his fifties and he died within three months. He had a terminal disease and he died and everything collapsed like a pack of cards because no one really knew or understood what the business was.”

There are many reasons for this. One of them is that older generations can be reluctant to let go of companies they’ve spent their entire lives building.

Often when new blood enters a company, two factions form. Young people with big ideas and ambitions and seasoned professionals who’ve been there for years, know how everything works and feel steamrolled by the new generation. This can lead to enormous amounts of tension.

 

Clash of the Generations

Nike tells us “I’m a mom, I’ve got two young boys. My oldest son is six. Sometimes he says things and I’m like ‘How do you know that? Aren’t you, like, two?’ In my mind he’s stuck as my little baby. And I always underestimate his abilities or his competence, his potential. What happens with founders is that they really underestimate the capacity of the next generation. Equally, on the next generation side, there are a lot more experts. They were born into wealth, but were schooled in a different country, they might even be immigrants to their own native culture and that can create gulfs and difficulties in communication and collaboration. It can make it difficult for them to be able to communicate their ideas in a way that they’ll be heard.”

It becomes a case of ‘Unstoppable Force meets Immovable Object.’ And it’s not exclusive to Africa, of course. But shouldn’t we always jump at the chance to learn and grow?

Newer generations have a huge opportunity here. An opportunity to soak up knowledge from lifetimes of experience. Lifetimes of resilience, grit and perseverance. Only by listening to the people that came before us can we create trust. And in turn, older generations will become much more receptive, much more inclined to chart new paths with us. To see things from our globalized perspective. Like Steve Covey said, “Seek first to understand then to be understood.”

This is where Nike introduces the three success factors for business families, the three Cs: Families that collaborate, families that communicate and families that have clarity – clarity of vision, clarity of mission, clarity of values and clarity of purpose.”

Of course there will be an adaptation period. A substantial shift like this, where we change the way we interact with each other, is never easy. But when we actually employ the three Cs, the potential is immeasurable. We create a new culture entirely, as Nike makes clear.

It’s about forming a kinship culture, even with employees. That’s when we make decisions, we’re not just thinking about a quarter, we’re thinking about a generation and we’re not just thinking about financial returns. We’re thinking about how our decisions impact the wider community.”

 

Authenticity in Leadership

As a leader, this finally means a shift away from positional leadership to persuasive leadership. Adopting the approach to family businesses that Nike lays out, employing the three Cs, we can transform our company culture into an active, vibrant organism and the benefits are immeasurable. Not only will it ease the transition from one generation to the next. It could also strengthen the bond within the company itself. It can create a business that’s equipped to deal with the complexities of our world. Because let’s be honest: it’s complex enough.

“Today’s leaders are navigating many tensions,” Nike says. “One is being globally relevant, yet locally relevant. There is also a rise of conscious capitalism and awareness of the wider ecosystem – thinking about the communities that you serve, thinking about employees, thinking about suppliers and regulators and so on. And then on top of that, the 21st century business and social challenges.” It can feel overwhelming, no matter how strong your company family is. As always, preparing yourself for these challenges, being resilient to them, starts with yourself.

As Nike puts it, “It’s not an easy journey as a next gen. It’s one of developing lots of courage, lots of conviction, spending lots of time with yourself, having those conversations on your own to really reflect on who are you as a person. Not who you are expected to be, but who you actually are and getting very comfortable with that. Discovering your authentic leadership and, as we at The Argonauts would say, discovering your authentic self. This is the most important thing.”

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