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Succession Planning Importance – The Namibian

TIME REALLY FLIES. It is hard to believe, but Harold Pupkewitz, Namibia’s highly admired, widely respected, and fondly remembered iconic entrepreneur passed away a decade ago.

Since his passing, the diverse business empire that Pupkewitz built from a small trading enterprise started by his father, continues to thrive and grow.

Their building material and hardware, motor vehicle, and electrical divisions, have opened branches in towns where they previously had no presence, while divisions upgraded branches and expanded operations.

Many Namibian family-owned enterprises falter and go out of business after the founder’s demise, yet the Pupkewitz business empire goes from strength to strength.

Conducting business in the exemplary manner set by the late Pupkewitz and brand building has contributed to this, but his succession plan is surely the cardinal reason for the firm’s continued existence.

In the United States, family-owned firms employ two thirds of all people in jobs and contribute over half of the country’s gross domestic product (GDP).

It is no different in Germany, Europe’s most industrialised economy, where collectively, family-owned firms are the biggest job providers and contribute the lion’s share of the country’s GDP.

And it is no different in Namibia.

Just take a closer look at any town and you will see that family-owned businesses in the informal and formal sector are by far, collectively, the job providers and wealth creators in the local economy.

Family-owned businesses are important creators of wealth and jobs in any economy, so it is important for them to come, stay, and not go when the founder is no longer around.

As for family-owned enterprises in Namibia, most fail to outlive the founder, with only a smidgen surviving into the second, or beyond the third generation.

In our routine work with entrepreneurs, we see the firm’s owner is preoccupied with running and building the business, and that most tend to pay scant attention to succession planning.

Resultantly, when the second-generation owners, usually the founder’s offspring, assume ownership in the absence of a succession plan, things swiftly go wrong.

To safeguard the firm’s future a structured succession plan provides for the employment of competent management.

And guards against the enterprise becoming a sheltered haven for family members with little interest in the business other than drawing a monthly salary.

It is more complicated in the absence of a plan that guides on conflict resolution when family members of different generations are involved in the decision-making process, as the dynamics of the business and those of the family are often not aligned.

Rifts develop, then some family members want to sell their stake, but in the absence of guidance on how this should be handled, it inevitably hastens the demise of a family-owned enterprise.

A well-crafted succession plan will guide on managing sibling rivalry to avoid squabbles, and on how to deal with family wanting to exit the business.

Although not many, there are other Namibian family-owned firms, who like the Pupkewitz group, continue operating, with their existence important to the country’s economy.

Examples include Olthaver & List, Wecke & Voigts Group and Metje and Ziegler Limited. Also, the Rehoboth-based firm founded by the late oom Land Benade.

One hopes that soon these family-owned firms will generously share their much-needed business succession strategies.

* Danny Meyer is reachable at [email protected]

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