Nike Anani did not plan on dedicating her life to the family business segment in Africa. Fate, it would seem, chose for her.
Nike is the founder and CEO of Nike Anani Practice, Ltd., in Lagos, Nigeria, where she helps second-generation family business members collaborate with the founding generation in an effort to build sustainable family enterprises in the region. No more than 2 per cent of African family businesses successfully transition power to the second generation, and Nike has made it her mission to facilitate this generational merge.
Family business has always been central in Nike’s daily life. Her parents were in their twenties when she was born and wanted to give their newborn a better life. They decided that launching a business was the best way to do so.
When she was nine, the family relocated from Nigeria to the UK, where Nike spent her formative years. After graduating university with a degree in Economics, she began working at Deloitte. While she loved her colleagues, she found the work itself dull. Her true destiny was beckoning, and she could not ignore the call any longer.
Nike returned home to Nigeria for what was meant to be a three-month break from work. More than a decade later, she is still there. After working in her family’s business for several years, she decided to follow her passion for helping other African next-gens, like herself, and thus created the Nike Anani Practice.
Women in Family Business sat down with Nike Anani to discuss the specific appeal of working with next-gens, the factors in Africa’s low succession rate and how the unique cultural landscape of Africa impacts family business development.
What drew you to work specifically with next-gens within the family business sphere?
When I first set up a family office, I felt quite alone because there was no family business association to which I could turn for support. I reached out to a number of international organisations and attended training sessions and conferences, but nothing was focussed on the area most relevant to my journey.
Over the course of my research on the family business space in Nigeria, it became abundantly clear that family businesses are more important to our economic development than many people realise. More than 90 per cent of our GDP comes from private sector businesses, most of which are family businesses.
I also discovered that only 2 per cent of family businesses will survive beyond the founding generation. This has created a passion within me to help other families build sustainable family enterprises so that we can create an impact on alleviating poverty through economic development. That passion, in turn, has led me to work with other next-gens like myself.
To what do you attribute this low survival rate from the first generation to the second?
From my experience, the signs point to a weak foundation. In Nigeria, the family business tends to be centred around the founder, and the business operates around his or her convenience. Not much thought tends to be put into turning the business into an institution and professionalising the operations.
Unfortunately, a lot of family businesses are still being run like a mom-and-pop shop, with a centralised structure and micro-managing. There is very little corporate governance, and HR ends up being more of an administrative function as opposed to a strategic one.
This creates a high level of “key-man” risk. There is little planning, so the very life of the business is dependent on the founder, and dependency is quite addictive.
There is a study that shows that 77 per cent of Nigerian family businesses want their businesses to outlive the founder. Yet, only 10 per cent of them have a succession plan in place.
Clearly, a lack of succession planning is a huge factor that is embedded in the absence of preparing the next generation for the role that they will eventually assume. That is why I’m passionate about helping next-gens gain a voice, take on more responsibility and make an impact.
Is there any movement by the Nigerian Government to offer regulatory help for family businesses?
Currently, it is not a topic that is being discussed. That is why we need to raise consciousness and awareness of the importance of family businesses. It is very important to have regulatory bodies push for conducive environments for family businesses to thrive.
The government stands to gain a lot from thriving family businesses, including tax revenues and increased employment. Businesses play a huge role in African communities and are key to economic development. Indian and Lebanese families in the same environment have managed to grow successful multigenerational businesses, and we need to emulate their best practices.
Do you see any cultural reasons why succession might be more of a challenge for Nigeria than it is for other countries?
It is first important to understand that Nigeria is very diverse, with 190 million people in 250 ethnic groups. The North is predominantly Muslim, while the South is a mixture of Muslim and Christian. So, the impact on individual families and cultures will vary throughout the country.
That said, most ethnic groups in Nigeria are still male-dominant. There is also a huge emphasis on age; older people are not to be questioned. Family business leaders are considered almost like demigods, which makes it difficult to create a collaborative environment.
When we look at a lot of business families, the first generation typically builds the business from scratch. They often come from poverty to create wealth within the family. The second generation probably grows up with a certain level of affluence, which gives them a completely different perspective than their parents.
In my case, I have a lot of Western influence. When I came back into the family business, a lot of my ideas were criticised as being too Western. They simply did not apply.
This can create huge challenges in collaboration between the generations due to diverging views. The second generation tends to want to implement more technology and professionalise the business, whereas the first generation tends to hold on to history and the way that things have always been done.
What about the often tricky relationship between non-family staff and the second generation? What can be done to address the possible problems directly?
I conduct weekly or monthly one-on-one coaching and mentoring with next-gens. We look critically at the current state of the business and work together to formulate a plan for where we want the business to go in the future.
Part of this work involves strategies for creating a culture of collaboration. Successful business leaders do not become accidental partners. That is why I am offering training sessions for associations. I will be running one later this year on how to create a resilient family and ensure a fool-proof future for the family enterprise.
These training sessions will often involve assessing different aspects of the business, including shareholder agreements and the wealth management structure. We may also need to devise sessions on creating a healthy and productive sibling partnership. Next-gen siblings are the future of the business, even if they are not necessarily going to be hands-on in the business.
This all speaks to the point of proactively preparing for the challenges that the next generation will face. One of those is, of course, working with non-family staff.
Looking ahead 10 to 20 years, what is your wish for the Nigerian family business community?
My greatest wish would be for next-gens to understand how much power they have. I believe that they are tools for social change on this continent, but not a lot of them realise that.
They have it in them to make a positive impact on the region. They can be vehicles to give a voice to social issues, such as gender equity, climate change and poverty alleviation. They can create this change through social enterprise, philanthropy or even corporate social responsibility within their family businesses.
I would love to see the rise of next-gens stepping out to the shadow and becoming legendary leaders, lifting up others as others lift them up. How great would it be to see them collaborating across the continent? The issues we face require deep collaboration to form a unified voice. They could lobby governments and push for social change if they work together, and I would love to see that become a reality.