ADDRESS BY HIS EXCELLENCY, SENATOR, DR IFEANYI OKOWA, GOVERNOR OF DELTA STATE, AT A SUCCESSION PLANNING WORKSHOP FOR NAOC CONTRACTORS, ON TUESDAY, NOVEMBER 01, 2016, AT ORCHID HOTEL, ASABA
Let me begin this address by commending the Board and Management of Nigerian Agip Oil Company for this novel initiative. This workshop is a unique approach to corporate social responsibility with the potential of revolutionising the SME landscape in Nigeria. The subject of succession planning is one that is at the very core of the growth and survival of small and medium scale enterprises.
- A cursory look at Nigeria’s Small and Medium Scale Enterprises clearly indicate that most of them rarely outlive their founders because of the absence of succession planning. Hence, I consider this workshop very critical and timely in addressing this peculiar challenge of SMEs in the country. It is a strong affirmation of AGIP’s passion and commitment to assist in developing the economy for the benefit of present and future generations of Nigerians. You have shown that your company is not just about the bottom line, and it is my hope that other multinationals will emulate this shining example.
- Succession planning, in general terms, refers to the process of identifying, selecting, training, equipping and preparing new leaders who will take over the running of the company when the owner/founder has quit the stage through retirement, incapacitation or death. The 2015 State of Succession Planning Report describes succession planning as, “any effort designed to ensure the continued effective performance of an organization, division, department, or work group by making provisions for the development, replacement and strategic application of key people over time.”
- Succession planning is part and parcel of running a business. Unfortunately, not many people see it that way in this part of the world. The subject is rarely discussed and, indeed, considered a taboo by most small business owners - just the same way Nigerians shy away from talking about or making a will.
- In the superstitious environment of our traditional setting, many business owners view such talk with fear and suspicion. They react to any suggestion on succession planning by consolidating their grip on the business since such talk is perceived as a diabolical plot to unseat them or plot their removal/demise. This is often followed with brutal repression and persecution of every perceived ‘enemy’ or likely successor in the company, whether staff or family member.
- The first thing every entrepreneur must realise is that succession planning helps to secure the future of a business. Without a succession plan, the business dies with the owner. The tendency is to ignore or defer succession planning, especially when things are very rosy. However, a succession plan must be incorporated into the daily management of the business, not next year or when you think, as an owner, that you are getting old and tired. When you make plans for a successor to take over your business, you are making sure that it continues to grow, prosper, and serve your family and other members of the society long after you are gone.
- Available statistics indicate that only one out of three family run businesses in the United States survive into the second generation of the family, and just one in ten make it to the third generation as a result of the lack of succession planning. In Nigeria, the scenario is far worse. Succession planning has been a major bane of sole proprietorships and small business owners in our country.
- Indeed it can be said that we have a succession crisis in Nigeria. In this country, we have had notable businesses or trading companies that were the toast of the nation several decades ago but, unfortunately, they are nowhere to be found today. Some of us here may remember such thriving business concerns as Jimoh Odutola Brothers, Adigun Brothers, Mai Deribe and Sons, Stationery Stores and companies of the late business mogul, Chief M.KO Abiola. In the transport sector, we had Ekene Dili Chwukwu, Chanchangi and Okada Airlines.
- These companies owed their success to the vision, rugged determination and business savvy of the strong personalities that founded them. But once the founders died or became incapacitated through retirement, old age or sickness, these companies gradually faded away from the scene. It is such a tragedy that the younger generation of Nigerians, especially those below the age of 30, have rarely heard about these companies that were the rave in the 70s through the early 80s.
- Another reason succession planning is important is that it helps to protect the company from infighting and disintegration in the case of any tragedy. None of us can predict what will happen tomorrow. However, we are better prepared to cope with the challenges of tomorrow when we have a succession plan in place. Without it, the company will more than likely be mired in all kinds of legal battles as family members and staff battle to take control of the business when the owner is gone. We have seen cases where the legacy of a once prosperous business was destroyed because of prolonged litigation among family members. So, as a matter of exigency, you need a succession plan to maintain peace in the company when you are no longer around.
- Succession planning has the potential to transform a small family business into a conglomerate or multinational. Some Fortune 500 companies have been in existence for as many as four generations or more. But they did not start that way. They started small and grew to be huge corporations largely because the founders had a vision for the business to outlive them. It would interest us to know that companies such as Guinness, Cadbury and PZ (Paterson Zochonis) started as family owned businesses. The Bible admonishes us not to despise the days of small beginnings. You can start small, but don’t stay small.
- A succession plan also guarantees you peaceful retirement. You will spend your latter years on earth with the sense of accomplishment and fulfilment that comes from the assurance that your company will continue to be in business and even surpass your achievements long after you are gone. Without that assurance, the prospect of the business that you laboured to build slide into oblivion can leave a man broken hearted.
- During the course of this workshop I expect that you will be taken through the nitty-gritty of succession planning. But suffice it to say here that it is incumbent on you as a business owner to identify employees with the potential to become future leaders, groom them to take over from you and set measurable goals that will guide the succession planning process.
- Every successful succession plan follows the template modelled by Jesus Christ. It is executed in three stages. The first stage is one of training through close association. Training includes teaching but it is more than teaching. It takes more than teaching to imbibe certain qualities or values; they are caught or imparted as the protégés spend time in close association with their mentors. During the early years of His earthly ministry, Jesus and His disciples ate, drank and slept together. He used their close association to pour Himself into them.
- Secondly, the disciples of Jesus walked with, and watched Him as He worked; giving them the opportunity to ask Him any question that came to their minds. Even the most seemingly stupid questions can elicit the most profound answers. You should create the atmosphere that would give your would-be successors the freedom to ask any question, no matter how dumb it may appear.
- Finally, it came to a point when Jesus stepped back and assigned His disciples to do the things they had seen Him do, while He watched them. That was to ascertain their preparedness, and also correct their mistakes. During the process of training and mentoring you must be willing - and ready - to delegate power and authority.
- I am confident that this workshop will be an enriching and rewarding experience. I urge all of you to take it very seriously and be ready to commence the process of succession planning immediately you return to your various locations.
- It is on this note that I now declare this workshop open.
- Thank you for your time and attention.
- God bless us all.
Office of the Governor