Why Zimbabwean Businesses dont last beyond their founders
Why is it in Zimbabwe or Africa as a whole, we dont pass a family business from one generation to another.It’s often not the norm to find a Zimbabwean business that have survived beyond their founders.In our culture if the founder dies the family clan shared everything among themselves.So is it culture, greedness or just lack of business knowledge.
From our research down below we have got few reasons why most African businesses don’t last beyond a generation.
1) Poor Succession Planning
Africans typically don’t like to think or talk about death, grave misfortune or permanent disability. Nobody would wish for any of any these, but they’re some of life’s risks and realities. And we must always consider, and plan for them.
However, while human life is finite and vulnerable to death and misfortune, a business can ‘theoretically’ live forever.
The best time to find a successor with the right level of commitment, vision and zeal to lead a business beyond the lifetime of the founder isn’t when the founder retires or is on his/her deathbed.
Finding the right successor to takeover the business is a deliberate and calculated process that should not be left to chance, or emergency situations. Actually, the earlier the process of succession planning is started in the life of a business, the better.
Death, misfortune, and accidents never give advance warnings. There’s a high risk in every young business that it could cease to exist if the brain behind it suddenly disappears (probably due to death or illness) or is no longer available for some reason to nurture, drive and grow the business.
Actually, planning for succession doesn’t have to be tough and complicated, like most entrepreneurs think. The secret is to make the conscious decision, and start the process early.
Successors could come from anywhere. They could come from within the family (children, siblings etc.), or they could be business partners who share the risk and ownership of the business with you. Successors could also be your most promising employee(s).
Once you have identified the likely candidate(s), it’s important to get them more involved in the business and groom them for leadership. They need to understand the nuts and bolts of the business and share a strong interest and passion in growing it into a bigger and better organisation.
If you identify any skills or knowledge they may be missing, invest in their learning and training. Formal education, short courses, mentorship, coaching and exposure are critical to the nurture and grooming of successors.
Whenever I discuss succession with entrepreneurs, the most common kickback I get is: “what if these potential successors know too much and become dangerous to the business?”
That’s a valid concern, but to my mind, the risk of the business going extinct due to poor succession planning is far more dangerous than this concern.
2) Small thinking
There’s no crime in starting small. Most businesses start small. Often, the mistake is staying small and ignoring possibilities for growth.
Many Zimbabwean or African businesses remain small all through the lifetime of the founder. And I think one key reason for this is most founders think small. What stops that small corner shop from becoming a national or international franchise? Why can’t that popular neighborhood product or service that you provide become a global brand?
Did you know that Coca-Cola was initially developed as a patent medicine to cure morphine addiction and headaches? It was developed by a local drugstore owner in 1885, but now has become a hugely successful international brand enjoyed by millions
To my mind, small thinking undermines the possibilities and potential of many businesses in Africa. If only we knew how truly big some of our local products and services could truly become, most African founders would test the limits of their vision and challenge themselves more.
By thinking big, the possible lifespan of your business automatically increases. Growth and expansion is an objective that could take several generations to accomplish, and embracing this fact can eliminate shortsightedness and increase your horizon of possibilities.
The best part: thinking small – like thinking big – costs nothing. It’s absolutely free!
3) Lack of structure and business systems
One key trait of successful businesses, especially those that have existed through several generations, is the existence of a clear structure and business systems that help the business to operate effectively.
Structure is essential to every well-run business because it provides order, assigns responsibilities for key activities and improves accountability. Many Zimbabwean businesses cannot function independently of the founder.
For example, if they’re out of town for any reason, or unavailable to sign cheques, suppliers and employees may not get paid on time. If he/she doesn’t OK a deal, it’s likely to fall through. His/her involvement in the business is often so central and too personal that it gets in the way of everything.
Business systems are also very important. How many medium-sized businesses on the continent actually have policies and procedures that govern everything from recruitment, employee conduct, finance and accounting, among others?
How many businesses actually keep accurate and up-to-date records of their activities, including complete information about operations, finances, transactions, customers, suppliers, employees and everything else?
It’s not surprising then that the most critical information and records concerning most businesses are housed in the heads of their founders. They seem to be the only ones who know where everything should be and how the business should run.
With this kind of ‘chaos’, it’s almost impossible to carry on a business when the almighty founder is unavailable.
4) Blind to business trends and changes
Another strong feature of businesses that last beyond a generation is their ability to adapt. In a world of constantly changing markets, consumer trends, socio-political influences and outright disruption, adaptation is a key strength of businesses that will survive today and in the future. Adapt or die! Many businesses seem to think that they’ve found a formula for success that will remain effective for a thousand years. which is not true
Entrepreneurs are often too focused on running their businesses that they don’t take the time to look into the distance future, and start to strategise or identify current and future threats or risks that could significantly affect their business, or worse still, kick them out of business.
In today’s globalized and interconnected world, one disruptive idea or business in a faraway country can totally change the landscape of your industry or market so fast that you may never find the time to think or plan.
Looking into the future, changes and trends in both the local and international market place will be one of the biggest risks that African entrepreneurs and businesses are likely to face. With a growing number of foreign businesses and brands increasing their footprint in Africa, even small family-owned shops and neighborhood businesses may not be spared.
To survive in these times of rapid change, entrepreneurs need to be open-minded and must not take everything for granted. Unlike a few decades ago, no business is too big to fail these days.
Our advice: stay knowing about developments in your market and industry, both locally and globally. Seek out innovative ways and technologies to make your business run more efficiently; make your products and services more valuable; keep your employees committed and effective; and improve the satisfaction of your customers.
In today’s internet-obsessed world, it’s cheaper and easier to find the information you need. You just need to know where to look, and how to find it.
5) A dominant ‘lifestyle’ mentality
In this part of the world, the success of a business is often seen by many entrepreneurs as a mandate to show off their lifestyle.
Fancy cars and homes, globetrotting, expensive clothing, extravagant spending, and lavish displays of wealth are often common. Especially when it comes to showcasing your success to friends, family and associates.
In my opinion, a dominant lifestyle mentality does two dangerous things to the longevity of a business.
The first is distraction. The funds you’re using to show off your lifestyle can actually be dedicated to improving and expanding the business into a much bigger success. Those funds could also be used for strategic investments that diversify or consolidate the business, making it stronger and more resilient. So, using proceeds from the business to celebrate your ‘success’ is really a sign of small thinking.
The second is you’re sending the wrong signals to your employees and potential successors. People are watching. If you treat the business like an cash machine, it’s going to be really hard for anybody else to manage the business with diligence and prudence.
If we see a business as an asset that should be nurtured and expanded beyond our lifetime, we should not suck the life out of it, or just see it as a tool to serve our lifestyle interests.