Recently, a close friend of mine who has known my family for the past 17 years asked me if I am grooming my son to inherit the family business, in a tone that sounded like she already knew the answer.
In our local culture, it is assumed that if a father spends years building a business, a son should automatically inherit it. For this reason, my friend expected that I would respond to her question in the affirmative.
But my view of succession is different. I believe that for a business, its customers, its legacy and value to be protected, leaders should be selected based on their qualities and not their lineage or proximity to the founder. That view aligns with a PwC study, which shows that only about 30 percent of family businesses make it to the second generation, due to factors such as inadequate planning, family conflicts, emotional resistance, and poor preparation for the next generation of leadership.
As family businesses across East Africa continue to push for stronger governance to secure continuity and trust with stakeholders, the importance of having robust and formalised succession plans cannot be overstated.
You see, ownership and leadership are separate tasks. Families that plan to reduce tax risk, preserve control where needed and avoid rushed transfers.
The International Finance Corporation points to family constitutions as a practical anchor. A constitution records shared values, decision rights, and rules for entry, development and exit.
It clarifies the relationship between family, management and the board. It also lowers the temperature when difficult choices arise.
For a family business to go through succession smoothly, it must first draft a constitution that clearly defines roles. A one-page CEO scorecard sets outcomes, decision standards and non-negotiable behaviours.
Second, give two or three key stakeholders, such as customers, operations, or finance people, real ownership in the business, to review the performance of leaders against the constitution, each quarter.
Third, upgrade governance. Add independent directors, schedule annual succession drills, and keep a crisis handover file updated twice a year. These steps reduce noise, keep attention on execution and earn trust with key stakeholders, especially during the first 100 days of a transition.
The family dimension deserves clarity. It is okay to invite children to explore the enterprise, but do not promise roles. Encourage external internships and mastery elsewhere.
If they return, they return as professionals, ready to compete on the same scorecard as anyone else. If they choose another path, celebrate that path. The company still thrives because leadership is earned, not inherited by default.