U
nemployment has always been
the bane of development, the free
market allocation of resources
always seems to educate and train far more
people than the market can absorb hence
the ever present yoke of unemployment.
As such those that have business acumen
and can start their own ventures and
hence not only employ themselves but
create employment for others are admired
for having the necessary courage and
perception to take the required risks to
launch businesses that are vital to national
development.
Whether you call them business people,
entrepreneurs or in the Kenyan context
hustlers they all are founders of their
enterprises and since we deem them
important for the development of the
entrepreneurial class we set out to
document their achievements.
What we found on the ground was very
sobering and disheartening as the majority
of the businesses that should have been
the flagship of local entrepreneurial talent
were stagnant if not regressing. Many
were in internal turmoil due to what
became apparent as being caused by the
founders’ errors.
We struggled to find successful African
businesses in the hands of the second
generation while this was quite common
among the Asians and we wondered what
business dynamics were in play that made
success illusive for the African founders.
To try and understand what caused the
local business difficulties we collated
and sampled a few business anecdotes
highlighting particular types of challenges
that we came across that we hope will
throw some light as to why indigenous
businesses struggle.
The Mystery Business
The call came in at about three thirty
in the morning from a frantic mother
who was informing her son, currently
schooling in England that he had to make
arrangements to urgently get back home
as his father had had a massive stroke and
was in ICU at Nairobi Hospital.
She asked him to let his sister who was
studying in Australia know what had
transpired and they would keep her
informed on events at home but to try
and not alarm her as she was about to sit
for her exams and there was no need to
interfere with that. the managing directors of the various units
to familiarize himself with the companies.
The young man arrived in Nairobi three
days later but unfortunately the father had
passed on the very morning he arrived and
soon the family friends of the well to do
businessman were at hand to take over the
preparations for the final rites. At the end of the attachment period that
would take a year the young man would
assume the position of the Group CEO
and the managing directors of the various
units would report to him at the group
level and he would have oversight role on
all the units.
The man was laid to rest a week later since
they had to delay for a bit to allow the
daughter to return from school but all the
arrangements were taken care of and the
man had a send-off befitting his stature as
the saying goes in Kenya.
After a week of finalizing other legal
requirements including the will being read
in which he had stipulated how his estate
would be shared out up and including
making a future projected provision for
even his grandchildren who were yet to be
born, reality sunk in.
The family suddenly faced an unforeseen
predicament, none of them had any idea
what the father’s business was as the wife
was a homemaker and the children had
never gone to the office where he worked
from and all they knew is that he had a lot
of business associates.
‘Leaders Sire Leaders’
Syndrome
The scheduled board meeting was about
to finish when a young stranger knocked
on the board room door and entered. The
board chair, who was also the majority
shareholder of the holding company, then
introduced the young man as his son.
He then proceeded to inform the board
that the young man was joining the
board as a Group Executive Director and
directed that the young man would be
attached for a period of two months with
The young man had just completed his
degree course in international business
in the US, a course that had taken him
six years to complete, it normally takes
less than three years to complete but he
was supposedly getting valuable working
experience in the first world.
That valuable working experience turned
out to be touring as many hot spots in
the US as he could fit in without getting
thrown out of the country for not attending
classes while on a student visa and he had
actually managed to attend four colleges
to attain one degree.
The Success Trap
When their father passed away the
four brothers had agreed that the third
born was the person best qualified to
continue running the two medium sized
supermarkets that their father had set up
in the busy Eastland area after working
for an Indian supermarket chain for two
decades.
This was a natural choice since he was
the only one who had ever worked with
the father as all the others had their own
careers and there was no need for their
input nor were they really interested in
becoming shopkeepers.
In a span of twelve years the enterprising
brother had grown the business into a
chain of twenty three outlets in six major
towns in Kenya and so successful was the
The other unfortunate occurrence was
that the enterprise was so wrapped up in
the founder’s ego to the extent that any
attempt to point out that the firm was
on a perilous trend tended to end up as a
personal affront hence the emergence of
the non-fallible founder.