Grit & Growth - All in the Family; Managing a family business for success and succession

All in the Family; Managing a family business for success and succession

05/18/21 • 43 min

Meet Naomi Kipkorir and Annette Kimitei, the mother-daughter team leading Senaca East Africa, and Peter Francis, lecturer at Stanford Graduate School of Business, and hear about finding success and navigating succession in a family run business.

Family dynamics can be challenging, not to mention, emotional. But when you add in a business, things can get even more complicated. Especially when the entire family is involved. That’s the story behind Senaca EA, a private security company headquartered in Nairobi, Kenya. Founded by Naomi’s husband, an ex-policeman, the business started in 2002 as a side hustle and now it’s a full-time, all-in-the-family-of five affair.

After a failed merger with a European company, the family literally came together to pull their company back from the brink. Thinking about family succession came next. And as Annette learned, “succession is not one event, it’s a process.” Formalizing corporate governance is key to that process, which for Senaca begins with introducing advisory board members that have skill sets the business is missing, and eventually independent directors.

Peter Francis fully supports that plan. And he knows from experience; his family run business has been going for six generations. Peter uses that firsthand knowledge to teach a class called The Yin and Yang of Family Business Transition at Stanford. Because issues that arise in a family business can often turn emotional, Peter advises seeking outside expertise, and relying on education, transparency, and communication to handle tough issues.

“If you're having a conversation about the business at home you might say, "you know what, we're home, we should be wearing our family hat, not our business hat". And then communication... I don't mean just communicating, but also learning how to communicate. That is a muscle that we can strengthen in the family.”

Listen to Naomi and Annette’s family story and Peter’s business insights to help think about your own company’s succession and governance plans.

Links:

Senaca East Africa: https://senacaworld.com

Annette Kimitei: https://www.linkedin.com/in/annette-kimitei-70594249/?originalSubdomain=ke

Peter Francis: https://www.gsb.stanford.edu/faculty-research/faculty/peter-t-francis

Stanford Seed: https://www.gsb.stanford.edu/seed

Resources:

Poza, E. & Daugherty, M. (2014). Family Business, 4th Edition. Mason, OH: South-Western Centage Learning,

Gersick, K., Davis, J., Hampton, M. & Lansberg, I. (1999). Succeeding Generations: Realizing the Dream of Families in Business, Boston, MA: Harvard Business School Press

Ward, J. L. (2004), Perpetuating the Family Business: 50 Lessons Learned from Long-Lasting Successful Families in Business, New York, NY: Palgrave Macmillan

Montemerlo, D. & Ward, J. (2011). The Family Constitution: Agreements to Secure and Perpetuate Your Family and Your Business. Family Business Leadership Series, No. 20, Marietta, GA: Family Enterprise Publishers

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Listen to Naomi and Annette’s family story and Peter’s business insights to help think about your own company’s succession and governance plans.

Links:

Senaca East Africa: https://senacaworld.com

Annette Kimitei: https://www.linkedin.com/in/annette-kimitei-70594249/?originalSubdomain=ke

Peter Francis: https://www.gsb.stanford.edu/faculty-research/faculty/peter-t-francis

Stanford Seed: https://www.gsb.stanford.edu/seed

Resources:

Poza, E. & Daugherty, M. (2014). Family Business, 4th Edition. Mason, OH: South-Western Centage Learning,

Gersick, K., Davis, J., Hampton, M. & Lansberg, I. (1999). Succeeding Generations: Realizing the Dream of Families in Business, Boston, MA: Harvard Business School Press

Ward, J. L. (2004), Perpetuating the Family Business: 50 Lessons Learned from Long-Lasting Successful Families in Business, New York, NY: Palgrave Macmillan

See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Previous Episode

Special Episode: Crisis in India - Managing a Healthcare Operation During COVID

Hear the story of Dr. Shuchin Bajaj, a doctor, and entrepreneur who set out to provide affordable, quality health care in rural India and found himself on the front lines of the pandemic through his network of 15 hospitals. From encountering multiple supply chain disruptions to motivating his team and building a 1,000-bed, no-cost, Covid treatment center in a matter of weeks, Dr. Bajaj has moved mountains to save lives. Leaders across India and in emerging markets globally will find his reflections valuable, both now, and when/if they find themselves at the center of a second or third wave.

Resources:

Volunteer for Project StepOne: https://projectstepone.org/join-us/

Donate to Project StepOne: https://projectstepone.org/donate/#

Stanford Center for Innovation in Global Health: https://globalhealth.stanford.edu/covid-19/resources-for-the-covid-19-crisis-in-india.html/

Stanford Seed: https://www.gsb.stanford.edu/seed

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Next Episode

Masterclass on Running a Family Business

Welcome to Grit & Growth’s masterclass on the complexities and opportunities of running a family business, featuring Peter Francis, Stanford Graduate School of Business lecturer. Peter provides practical strategies, tactics, and firsthand experiences of effective family business management.

Peter Francis’ expertise in family businesses goes far beyond the theoretical — he invests in them, teaches a class on them, and is also the former CEO of a sixth-generation family business. So he understands both the advantages and complexities that come with families working together and transitioning from one generation to the next.

Peter believes, and the statistics confirm, that family businesses have some significant advantages over their public counterparts, namely patient capital, speed of decision making, the ability to pursue unconventional strategies, and pride of ownership. But the complexities of family relationships and emotions can be challenging.

Creating a culture that encompasses both family and business is essential. “ It's not what you say with your mouth, it's what you do with your feet. And so early on family leadership needs to make it crystal clear that that's the way it's going to operate, and then they need to operate that way. And I will tell you, what you do will outweigh what you say.”

Top Six Masterclass Takeaways

Make sure to understand your ownership model, clearly defining who are your active vs. passive owners (you want more of the former.)
Education, transparency, and communication are the top three “universal” antidotes for handling many of the issues that show up in family businesses, especially during times of transition.
Separating business and family is essential — don’t bring business problems home and try to solve them in the “family room”.
Bringing in an outside voice/advisor can be a huge help in matters of transition, especially when things get emotional. Which they almost always do.
Getting independent directors is key to growth and success. Actually listening to what they have to say is even more important.
Thinking ahead, before you’re actually ready for a transition, will be a big help, especially in the event of an unintended consequence, such as the death of a founder.

Listen to Peter’s insights, advice, and strategies to help manage everything from success to succession in your family-run business.

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