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Family Business: Insights from the First and Third Generation

  Oct 23, 2013

Strathmore Business School’s inaugural Family Business Program brought together various participants all working within family businesses where they garnered knowledge on the effective governance of a family business. The program culminated with a panel discussion with three executive guests; Mr. Titus Muya, Owner and Founder of Family bank; Mr. Palkesh Shah, Director of Spin Venture Group and Dr. Philip Mwabe, Owner and Founder of Environmental and Combustion Consultants Group. The three being the first generation, third generation and first generation of family businesses respectively shed a light with regards to their family businesses in the panel discussion that was co-ordinated by Paul Ouma.

Titus Muya, also known as TK in the office narrated on how he started family bank in the 70s. The dream to start family bank was nurtured as a result of having come across a magazine article. The sentence, which triggered his dream, read, ‘all big businesses are started by individuals’. He did not have the capital, vast knowledge of the banking industry nor networks then but his persistence to seek a license to realize his dream did prevail after dozens of visits to the treasury. He finally received his license on condition that he would initiate a building society, and as they say, the rest is history as he has managed to build a business empire with interests in real estate, farming and insurance. He attributes his success to the need for creating wealth for his family and country through creating employment and an urge to succeed in his initiatives and work ethic.

Palkesh Shah a member of the third generation in his family’s business, Spin Venture Group. The family business began in the 1920s when his grandfather came to Kenya as a result of three drought seasons in India. He came in a dhow and had only a pair of extra clothes at hand. He began working as a turn boy who was delivering potatoes and was promoted to a lorry driver. Despite not being educated, his drive to succeed, honesty and hard work enabled him to start a provision store that grew into an importing business then to a large textile manufacturing company.

Dr. Philip Mwabe’ s enterprise began in 1995 as a result of having identified an opportunity to start a toxic company due to the toxic wastes that lay in various parts of the country due to the locust outbreak in the 1990s. Having arrived in Kenya in 1993 as a PhD holder in chemical engineering and having not secured a job, he initiated the Environmental and Combustions Consultants Company that is still being run by the first generation with him still at the helm of the company. His journey into this great enterprise has not been as smooth for he had to do a lot of lobbying because laws governing the industry were non-existent then. He had to rely on the European law to enable his initial investor invest into his proposal to initiate the program. His lobbying finally paid off after years when the waste management law was passed in 2002 in parliament. This law promulgated NEEMA.

Participants were able to interact with the panel speakers through the Q and A session. The speakers were asked to define success with regards to family businesses. Mr. Muya explained that the profit and loss sheet defines modern day family businesses for it determines the profitability of the family business. Mr. Palkesh did put an interesting twist onto the question for he expounded on it with two focal points, one being the profit and loss sheet and family values. He explained that a key pillar of success in family businesses is dependent on the family sticking together throughout the and maintaining their values as most family businesses fall apart as a result of family values being infringed on and replaced by greed.

Participants raised the question on why the Asian community succeeds more in business as compared to the African communities. Mr Palkesh attributed this to the unity, values and competition that exist within the Asian communities with regards to business. All family divisions within the Asian community strive to succeed in business and compete against each other, all the while maintaining their values and unity. Mr. Muya attributed their success to the nature of the Asian Community when it comes to business. He stated that they are good at managing their finances and know how to save and invest their money for they are not affected by ‘EFFLUENZA’, the disease of spending money aimlessly which affects most African communities with regards to business. He also attributed their success to the operation of their businesses with a vision of the end goal and exercising patience, which rarely exists within African communities operating businesses.

About Family Business Program

“Familiness” is a resource that can create uniqueness and a critical source of competitive advantage to a business. Almost all companies start out as family businesses, but only those that master the challenges intrinsic to this form of ownership endure growth, maintain collegiality and harmony as a family and achieve success in the business. In the process they transition successfully across generations and proceed to prosper and diversify into multi- locational and multi-industry businesses.

For more information, click here.

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