Konnected Minds Podcast with Derrick Abaitey
Segment: African Wealth Rarely Survives Past the Third Generation
What if the biggest difference between families who build wealth that lasts for generations and those who watch fortunes disappear within a single lifetime isn't how much money they accumulate, but understanding that children who feel forced into family businesses will resent the obligation, that sending your kids abroad for education while shielding them from the discipline and hard work that built your success is the undoing of the next generation, and that at conferences bringing family businesses from around the world some representatives are in their ninth or sixteenth generation while only two Africans sit in a room of over a hundred people because we simply don't put systems behind our businesses to ensure they pass from generation to generation? In this powerful and deeply insightful episode of Konnected Minds, we sit down with Abiola, a family business advisor who has spent 10 years managing family offices across Africa, and she reveals the uncomfortable truth about the business at Kantamanto making over 200,000 cedis every day whose parents sent all the kids abroad but now none of the children are interested in taking over, why this story is very familiar and more like the stories she hears every day because of the type of work she does, why African wealth creators largely build from business and real estate but when the founder passes or something happens the next generation has not been brought up to speed and everything goes back to square one, and why we don't have businesses that pass from generation to generation because we don't put systems behind those businesses and there is no succession plan that ensures the next generation is already in queue ready to take on the battle. She breaks down why a family office is set up by ultra high net worth individuals or wealthy families who want their wealth to be institutionalized and want to build a system and an infrastructure around the wealth they've built so that it can perpetuate multiple generations, why the first generation builds the wealth the second generation enjoys it and the third generation destroys it or they don't even find anything and start all over, why at a 2019 conference in the US bringing family businesses from all around the world together they were only two Blacks two Africans out of a room of over a hundred people, and why she interacted with representatives of family businesses some of them in their ninth generation some in their sixteenth generation and it was so interesting to see that family businesses are succeeding generations in other parts of the world but it seems like something we're not even used to in Africa. But she also confronts the brutal reality about what we're missing. Why she came back from that conference and began to think why is this not possible on the African continent what are we missing what are we not doing very well, why she found that a lot of African business owners or African wealth creators majority did not come from wealth so they go into the hustle and bustle and eventually make it, why there's this regular saying that everything I didn't have growing up I want my children to have it and that is the undoing of the next generation, and why the discipline the hard work the rigor everything that helped you build that successful business are the things that we shield our children from. She reveals why we send our kids abroad to go get education which is not bad in itself because that exposure is also great but what we don't do is build the roots and the values and create a system that transfers the values that helped us build such successful business, why we must ensure that we engage this next generation from when they are very young so they understand that they're already part of the family business by mere fact that they were born into that family, why even though you may decide not to be an operator of the family business meaning working in the business you are groomed intentionally to be able to steward it govern it make sure it grows, and why the first generation must ensure they give education to the succeeding generation that allows them to govern the business and understand the meaning of responsible ownership and have the skill set and the competencies to be able to grow that business while other people are operating it. But she also shares the delicate dynamic between generations. Why for family business owners who have created something really successful the last thing you want is for that thing to go down the drain which is why some people may want to force their children but that's not the way to go about it, why if the second generation feels like this is an obligation as opposed to something they have a choice in and can bring their best skills to the way they approach it will be very different, why the conversation between the first and the second generation sometimes should be brokered by a neutral third party especially because the fathers are usually very stubborn,...
