By Inno Obiorah
Success in any human endeavour comes from learning, not necessarily from one’s mistakes but also from one’s successes. In most climes, successful people are known to review the process of their success so as to determine whether their success was an act of luck, knowledge, hard work, principles or a combination of factors.
It is this conscious effort to self-review that explains why, in some parts of the world, particularly Europe and America, you find businesses as old 200 years still thriving, passing from one generation to the other. Some of these businesses, like Guinness Brewery, founded in 1759 by Arthur Guinness, started off as a family business before transforming into transnational conglomerates.
This cannot be said of Igbo businesses, wherein there is no succession plan and the businesses die as soon as the founder dies. Prior to Independence in 1960, Sir Louis Ojukwu was reputedly the wealthiest man in Nigeria. He founded the Ojukwu Transport, Ojukwu Textiles and Ojukwu Stores. Sir Louis Ojukwu was the first president of the Nigerian Stock Exchange. But where is the ubiquitous Ojukwu conglomerate today?
Again, in recent memory, we had Ekene Dili Chukwu Motor Transport Ltd. After the Nigeria-Biafra war, Ekene Dili Chukwu Motor Transport Ltd dominated the road transport business and had offices in virtually all the major cities in Nigeria. But when Chief Ilodibe, the founder died, the business and the brand died with him. Many other Igbo businesses have gone the way of the Ojukwu Group and Ekene.
Granted, business is our forte and we are one of the most enterprising and successful tribes in Nigeria, but I dare say that something is wrong with our business model, if our businesses do not survive the founders. For instance, the Ekene Dili Chukwu brand, rather than go down, could have been rescued by either merger or acquisition, assuming the company was open beyond Ilodibe and sons.
Ever since I became an adult, the one dominant thought in my mind has been how we can advance our entrepreneurship and use our experience to recalibrate our economy. The reason I am writing this is to remind us as a people that we are not yet the economic colossus that we ought to be, and there are reasons for this.
The modern way of using companies to conduct business in Nigeria dates back to the colonial era. Interestingly, while all the indigenous colonial era companies have all disappeared, some of the British-owned companies are still around, such as UAC, John Holt and Leventist Lever Brothers, among others.
The foreign-owned companies survived for various reasons: adequate succession plans, good corporate governance, merger or acquisition and diversification of shareholding interest.
The UAC’s founder, William Heskett Lever, was a soap manufacturer who was involved in the West Africa trade to supply his company with palm oil. From the inception of the company in 1924 as Lever Brothers West Africa Ltd, the indigenous people conducted business with the company. The company, rather than liquidate or leave Nigeria entirely, sold shares to Nigerians, hence, today, Lever Brothers is still around making soaps and detergents, while UAC of Nigerian Plc is still running and thriving, having diversified into other endeavours like real estate.
It is my opinion that the individualistic nature of the Igbo is one obstacle holding Igbo successful businessmen from growing their vision to outlive them. The typical Igbo businessman wants to be the chairman, managing director and chief executive officer, accountant and auditor in his business. He wants 100 per cent control of his business, thereby limiting his ability to expand or reach more market. When he dies, the business dies with him.
Most Igbo businesses lack good corporate governance structure. When the founder dies intestate, his family of many wives end up in endless litigations over his assets while the business crumbles. I am not a legal expert, but my advice to people fighting over assets is to seek alternative dispute resolution method to settle their disputes, instead of going to court, which is not only costly but also time-consuming.
Some successful Igbo businesses that had partners also collapsed because of petty squabbles, which would have easily been resolved through mediation. The new business world requires good corporate governance management, where the directors are diversified in talent, knowledge, experience and skills. Such diversification boosts investors’ confidence to buy into the company’s shares, which helps the businesses to grow. But are the Igbo ready to embrace the new and emerging economy?
It is unfortunate that many Igbo businesspeople are still doing things the archaic way. One-man business has a short lifespan. If you want to establish a lasting business, you have to embrace change and still retain control of the company by holding controlling shares. Many other ethnic groups in Nigeria are going public with their companies, thus saving their business from collapse and minimizing their risks. Dangote and Adenuga readily come to mind.
Only a few Igbo have their businesses traded on the Nigerian Stock Exchange. The majority prefer to keep control of their business even though the advantages of a public limited company outweigh a one-man or family business system.
The advantages of a public limited company include raising capital through public issuance of shares, widening the shareholder base and spreading risk, increase finance opportunities, growth and expansion opportunities, prestigious profile and confidence and most importantly, longevity of the businesses. Even though it seems on the surface that Igbos have done well in various businesses, and they have cash base more than others, but without allowing embracing the modern ways of doing businesses the Igbos businesses will remain dwarfed.
I have asked myself many times why the Igbo do not see that they are putting themselves on disadvantage positions by not opening their companies to the public. One wonders why companies like Innoson Motors, Ibeto Group and Air Peace are not in the capital market whereas the Dangote Group is traded in the stock exchange?
Air Peace, Innoson and Ibeto have become strong brands in their own right. Many people would like to buy into their shares but will they allow other shareholder participations? The Federal government recently invested $2.5 billion in Dangote refinery which is the biggest single government investment in a private company in Africa. The Federal Government was able to make the investment not just because the refinery is of strategic importance but because Dangote opened his doors for investment.
I guess the time has come for us to stop personal aggrandizement about our successful businesses and look forward to more prosperous and lasting businesses that will survive us. This is why when an Igbo businessman has a problem with the government in power, he or she is usually alone like a tree. If you have a Public Limited Company, share holders will be fighting for you because they have vested interest to protect in the company. It is better to have a forest than to be a lonely tree.
• Obiorah write from New Jersey, USA. Email: [email protected].