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This is the second and last part of an article by Katazo C Mbetu, Executive Dean at the Midlands State University on whether Zimbabwean black family businesses plan for their future once the owner or founder is dead.
SEVENTY percent of the respondents indicated that the business owner had not planned for the retirement and future of the business and self.
Only 40% scouted for a successor in or outside the family while 60% indicated that they preferred their own family member to inherit the business irrespective of having interest or not.
Sixty percent of the successors were hand-picked by the owner and given on the job training while 40% had gone through a period of formal and apprenticeship training in business succession. Stewardship was considered the most essential quality of a good successor.
A majority of the respondents stated that they assumed an advisory role on retirement.
It took them between three and five years to adjust to a pending retirement, let go of the business and fully develop external interests. Seventy percent of the respondents kept advisor reports and documents for future reference.
While monthly progress reports were given sometimes, a quarter of the respondents said that they saw no need of getting monthly reports once advice had been given. Almost half of the respondents held a Board of Directors meeting while over half consulted family members only when there was need.
The black family business in Zimbabwe especially in the young generation category is making great effort at succession planning. Failure to plan succession is a recipe of failure to business continuity.
There is a possibility the owner might fail to retire when he/she is due.
The owner owes it to the family to create a realistic and workable succession plan. Strengths and weaknesses of the successor must be identified. Provision and development of skills is necessary.
Ownership and management transfers are conscious acts of intentions. A tough and pragmatic decision as to which family member if any, can continue to run the business successfully has to be made.
The successful continuation of a business requires objective decision-making by all family members and a commitment to develop personal goals within the family business structure.
Old generation business persons fear to disclose information about the business operations, but the majority of the young and first generation entrepreneurs have spurned the cultural belief that once you disclose information about your riches then you are dead.
Lack of past experience in business management and ownership is fast being overcome.
Black family business owners are making a conscious effort to ensure that they plan for succession in their businesses.
In order for family-owned businesses to be successful members must communicate rationally and objectively. The characteristics of each family or potential successor must be identified.
The qualities should include commitment to the business.
There should be constant dialogue between the advisor and the business.
Follow up strategies to obtain buy-in for family objectives must be made.
Accountability goals and task timeliness for all parties in the succession process must be developed.
Failure to utilise family council may lead to delayed decision of who takes over.
That is devastating to the business-especially in the event of death, where the business can end up in limbo due to probate.
The founder should meet and discuss with the family to determine who has the desire, skills and vision warranting taking over the business. Ways to share wealth and ensure ramification of extended family such as spouses should be examined. — The African Executive.
* Katazo C Mbetu is Executive Dean, Midlands State University, Gweru, Zimbabwe.
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