The Jewish community is known worldwide for their propensity to build wealth and not just any wealth, but generational wealth. Respected in the world as a business savvy race, the Jews have mastered the art of building generational businesses, and along with it, wealth. Businesses that survive centuries, passed down from father to son, not only remaining intact, but thriving. That commendable culture is not key among the majority of Zimbabweans who manage to build businesses.
A crippled economy
Perhaps the most prominent factor disabling Zimbabweans from building businesses that are passed down generations, is not entirely their fault. Harsh economic conditions hinder the growth or survival of a company. The country has been on the steady decline since the early 2000s, with the economy hitting rock bottom in 2008. Account balances were wiped out overnight, and businesses suffered massive losses. The number of operating industries in the country shrank, and smaller enterprises without the capital reserve large organizations have, crumbled. Foreign currency was in short supply, the Zimbabwean dollar had collapsed, hyperinflation was the new norm, and political upheaval rocked the nation before, during and after the election. Zimbabweans fled the country in droves and the industry suffered an impressive brain drain, losing valuable human capital. The economy was officially dead in the water.
In the face of these untenable economic conditions, it would be a remarkable feat to sustain a business in the present, let alone grow it for future generations. With businesses collapsing at an alarming race, perhaps building generational empires is not the foremost priority. Judging Zimbabweans on their flair for business is a difficult undertaking because the economic and political upheavals within the nation bias the view.
Inferior company policies, weak structures and unethical practices
That said, a large portion of Zimbabweans who do manage to build businesses that seem to thrive, do not put in place structures and policies that safeguards the business and keeps it intact for the next generation. Indigenous companies are notorious for their poor hiring practices and callous treatment of employees. Real talent is neither hunted nor searched for, and is often rejected in favour of nepotism. In my opinion choosing to hire family members is good and fair practice where family businesses are concerned. Hiring and training qualified family members is key here. Indigenous companies in Zimbabwe however, do not take into account the capabilities or lack thereof, in the hired relatives. This automatically creates a problem. When you do not hire the best people for the job, you are unlikely to get the best results. Without the proper structures and policies in place to ensure the company hires real/potential talent, and nurtures it diligently, the company can only perform at the level of its employees.
Brand management and relationship building is not a common tenet of most indigenous, with company founders hell-bent on making a quick profit. Providing real quality value is not a top priority hence these companies cannot build a solid, trustworthy image. Perhaps Zimbabwean business owners fail to understand the power of consumer references, i.e. word of mouth. A good reputation is built on recommendations of past or current clients to potential clients. Your market will sell your brand name to one another based on the service they receive. Unethical practices, failure to keep promises, and shoddy service or poor quality products will result in the eventual failure of the business.
Poor succession plans
A key feature of generational businesses inherited from parent to child, is that children are taught and trained in preparation for taking over the business. The heirs assume the responsibility of learning everything about the business from early age and are instilled with a sense of pride, responsibility and appreciation for the business. They are raised and educated with the expectation that they will one day participate in the running and operation of the business. Zimbabweans business owners do not apply the same methods. Their children are sent to elite schools, but are not instilled with a sense of responsibility for the business. Instead some of them grow up feeling entitled and with very little respect for the hard work that is poured into running and maintaining the business. They are spoiled, coddled and sheltered from the brutal side of business. Without the essential grooming, how can these children inherit businesses and manage not to sink each and every single one? To worsen matters, indigenous business founders often prefer to retain ultimate power and are unwilling to train anyone to take their place. This often means in their absence; the business cannot operate.
It’s not all bad news
Interestingly there are sections of the Zimbabwean society with people quietly building and growing businesses that will surpass their lifetimes. Both black and white Zimbabweans with businesses, as well as Indian Zimbabweans, Moslem Zimbabweans and most notably rural Zimbabweans, have managed to do this for themselves and their children. This of course only includes those with businesses that survived 2008 and those that will survive 2018/2019. Rural Zimbabweans with businesses often leave them to their children who either run the businesses themselves, or appoint a manager and simply oversee. This proves that not all hope is lost for the ability of Zimbabwean business owners to build generational businesses.