This archive report was first published on 16 October 2019.
Published on October 16, 2019, a survey by Deloitte East Africa revealed that over a third of family business owners in Kenya would be willing to sell a stake in their company for long-term financial success.
According to the survey, nearly half of family business owners in Kenya prioritize maintaining control to ensure legacy and preserve the family tree. However, only 26% have a concrete plan for the chief executive position, and even fewer have a stated plan for other C-suite positions.
Deloitte East Africa CEO Joe Eshun noted that family businesses tend to lean towards a long-term view rooted in shared values, vision, and culture, which can help them maintain family control over the years. However, he emphasized that family ownership alone does not guarantee a business' longevity.
“Family businesses need to translate their vision for the future into a solid action plan if they are to remain competitive,” Eshun said.
Interestingly, about 70 to 80% of businesses in Kenya and around the world are family-owned. These businesses are defined as having at least one representative of the family or kin formerly involved in the governance of the firm.
Despite their prevalence, many family businesses in Kenya face challenges in long-term success. A total of 791 executives from 58 countries were interviewed in the survey, which highlighted the importance of outside help in ensuring the future of family businesses.
For instance, a Family Business Survey for 2017 noted that family businesses are often averse to seeking outside help, such as public listing, due to concerns about whether their vision will be truly understood and honored.
Failure to enlist outside help has resulted in the demise of many family businesses. In Kenya, family businesses contribute about 60% of employment, making it essential for them to adapt to changing market conditions and seek outside help when needed.
