The Dean of the Lagos Business School, Professor Chris Ogbechie, has stated that only 30 per cent of family businesses survive beyond their first generation.
He stated this during his welcome address at the Lagos Business School Family Business Conference, which was held in Lagos on Friday.
According to Ogbechie, family businesses all over the world are faced with unique challenges. This, he said, inspired the LBS to come up with an initiative to foster conversations surrounding the peculiar challenges faced by family-owned enterprises.
He remarked, “Despite their contributions, statistics show that only about 30 per cent of Nigerian family businesses survive past the first generation [research by the Nigerian Stock Exchange on family businesses]. This highlights the critical need for tailored support to ensure their longevity and continued success.
“These statistics underscore the resilience and enduring legacy of family businesses in our society. However, they also highlight the need for continuous learning and adaptation to ensure sustained success in an ever-changing business landscape.”
On his part, the Director of the Family Business Initiative, Dr Okey Nwuke, declared that many family businesses had gone out of business owing to a vast array of issues.
He noted that about 24 million family businesses in Nigeria contributed up to $200bn to the national economy.
In her keynote address, the founder of the Chair Centre Group, Ibukun Awosika, highlighted the need for a family business to clearly articulate its vision.
She noted that the survival of family businesses across generations primarily depends on structures built to enable the business to outlive the founding fathers.
She also advised that family businesses should allow successors to run with their ideas without necessarily being bugged by pre-existing templates of their predecessors.
She said, “What is the vision in the mind of the person who started the business and what is the vision as the business undergoes the process of transition? A lot of times, we do not have clarity on why we started the business in the first place.
“Is it just to make money? Is it to provide for our family? Is it to keep our family name in the public eye? Or is it to build an institution that will create value across time? Because your actions will depend on your vision.”
Awosika stated that for family businesses to stand the test of time, they must embrace the right values.
She also cautioned that families must critically examine their individual talents to determine how these talents would be deployed in various aspects of their businesses.
For family businesses run by spouses, Awosika pointed out that it was important for one person to make the needed sacrifices to strike a balance between running the business and running the home.
She added, “If we are building institutions, we need to ask ourselves—did I build for my children? Personally, I don’t believe in that because this is my vision, not my children’s vision. My father did not force me into his own vision.
“We sometimes force our children into our unfulfilled dreams. We forget that they also have their dreams and visions. They can serve the company in different ways. They can bring their talent to serve on the board of your company at the appropriate time and add immeasurable value.”
SOURCE: PUNCHNG
