Family Succession Planning: Part 1 of 3 Part Series

Mzee Andrea, His Son Peter And John Their Manager

Mzee Andrea is your quintessential businessman. Whatever he touches turns to gold. He has a good mix of people-management and negotiation skills and often uses his high sense of humour to defuse tense moments.

To immortalize both his late wife and late mother, Andrea found cheer in combining the earlier letters of their names, Fiona Mbotela and Tamara Muki, to give his business a fitting name. This logic, however, is not public knowledge.

Fimbo Tamu Supermarkets LLC is the name of the business. Every time Andrea is asked about the choice of name, he often quips: "I leave it to your imagination." But he is always quick to add: "I don't know why people ask, but they all agree that besides it being an easy name on anyone's tongue and memory, it seems to improve the quality of conversations in homes and social places." The use of the name has left some referring to it as FTS but the majority says it as it is in its full sense.

Mzee Andrea's son, Peter has just returned from his ten years sojourn overseas where he completed his university studies and also had a rich working experience serving in numerous organisations. Dad keeps mocking him with the phrases and questions: “Miaka kumi kule Umarikani na huna mzungu wala hata MKenya aliesoma nawe kule? Ninge penda sana kutazama wajukuu wangu hapa wakicheza.” And Peter often responds: “mimi ni kama mzungu kwa mbinu zangu sote. Wakati itafika. Kwa sasa tuimarishe Fimbo Tamu.” And Mzee asks sarcastically:”Fimbo kipi tena isio nipa wajukuu?”

Peter worked his way into management at his last job and received accolades for his innovative exploits that translated into huge profits for his employer. His strengths were around systems development and, or enhancements. He also has an eye for financial detail.

John is Mzee Andrea's 'faithful' servant. He has worked for him for 20 years and has been the permanent feature with a towering presence in the business since its inception 15 years ago. He gels quite well with Andrea and theirs is a special relationship that confounds Andrea's friends and foes alike. There seems to be no line separating leader and servant but everything works so smoothly. Many refer to John as Andrea's walking vault that safely keeps both the good and the dark secrets.

Peter now finds a business with 5 outlets and as the trio adjusts to one another's presence, he begins to uncover one fault after another. The man introduced to him as a faithful servant is actually quite the opposite. John's bills from his frequent shopping sprees around the outlets never ever get settled, they pass more as privileges than debts to the business. Peter sees this as a red flag.

Andrea and John, have all along run a semi tax-evading business and one that also causes critical invoices from major suppliers to vanish in exchange for a cut from the savings made, for the managers at the other end. The dilemma at hand is a real threat on an otherwise healthy Father and Son relationship.

The dark secrets thus far, cannot be freely shared with Peter, and John's place in the business must not be threatened whatsoever. Andrea must be clinical about things and act fast or else open up himself to an unknown and an unpredictable space. At his age, losing control on crucial matters is quite discomforting.

Peter has analyzed information relating to the past six months and noticed a trend of abnormal gains and profit margins better than the accepted industry average. He looked out for unique management practices that he could attribute to the rosy margins, but on the contrary, he picked out several inefficiencies that should otherwise have translated into huge losses.

Mzee Andrea is becoming very unsettled by his son's sleuthing activities and he has neither any ready explanations nor a plan to logically resolve the quagmire. He just knows that he has to do something very soon as both his pulse and blood pressure readings are now constantly racing in the red zone.

In the midst of the confusion and excitement, Peter wrote to his university professor and explained his observations on email. A stunned professor was candid in his brief reply: “You are running a dishonest business.” The good professor advised Peter to audit all the processes for therein lay all the answers. For Peter, success and accolades had come from working in a well-run and honest business enterprise. This new experience was neither taught to him in school nor had he ever come across it anywhere else.

When Peter made his intentions known for a far-reaching audit, Mzee Andrea looked delighted at the perfect timing. But that was just on the outside. Deep inside him, was a terrifying feeling but just then, an ember of hope lit up in his wicked mind and he quickly fanned it to a dazzling flame, albeit having broken an uncharacteristic sweat.

He informed his son of a ‘promise’ that he had made to John while Peter was still away studying and earning himself some useful work experience. Andrea claimed that he had promised to hive off a fully stocked outlet as John's retirement benefit. All along, he had assured John of a fitting gift, but to let him walk away with the biggest of the outlets was never discussed at all.

The shop on the cards is the best performing outlet. In fact, this store generates 35% of total revenues and the gesture extended to John is quite a sacrifice but whose logic when questioned by young Peter, is dismissed as: “ Wacha mambo ya wazee”, and let the fulfillment of a Peter- walk-in-John-walk-out arrangement get executed. Andrea insisted that he would personally mid-wife the arrangement. A teary-eyed Peter watched the unfolding events from a safe distance as John took over the anchor branch.

The accountants were called in to separate the books and John took over the outfit as a new entity. The books of accounts were reworked such that all the bad practices were tucked away in the books that John took with him. Andrea then agreed to serve as chairman of what was left behind and let Peter run things as the CEO. He was on call for advice over the next six months and thereafter, Peter was to chat his own path.

The Grapevine was rife with a 'keeping the vault shut' narrative as it made little sense to bequeath rather than reasonably pay off an employee in the manner before their eyes.

Andrea then went over to John's store and sought assurances that in exchange for the biggest of the outlets, a code of secrecy was to be strictly observed including a lid on John's randy escapades with several women and still counting, and Andrea's darkest sins. The two elders had good reasons to keep their mouths shut and as he walked away, Andrea joked: “or you call yours Fimbo Fisi Supermarket?”

This elicited a prolonged bout of laughter from John and also served as the lasting screen-saver image that ignited in Andrea's mind every time he thought about John thereafter.

A year down the road, John had literally run down his store because his work style needed constant guidance from his former boss now nowhere nearby and conveniently retired to farming activities.

Eventually, the once gigantic store shut down as John could not keep up with rent and an expensive social life. The landlord at John's store approached Peter to take over the entire space, and gladly, the store was once again renamed Fimbo Tamu Supermarkets and Peter worked hard and eventually restored it's lost glory.

Meanwhile, a broke John, teased and mocked by customers, friends and the town's riff-raff for wasting a golden opportunity, fled from the town and henceforth led a reclusive village life and eventually took all the secrets with him to his grave three years later.

The handover was now complete. But in a conversation with a close friend, Mzee Andrea, promised to one day confess to his son about what really happened to warrant the price he had to pay. He regretted that things would not have gone that far were Fiona alive as John would not have become dangerously close.

Andrea had in the past used John to do his dirty work and was genuinely afraid for his son's life had John felt both threatened and exposed by Peter's presence. Equally, Peter told his old college professor that he would one day reveal to his father that he had pieced together the whole story and had in the process settled all outstanding taxes after putting in place working systems.

At the time that the outlet was surrendered to John, Peter had contemplated returning to the USA for good as he had felt betrayed and cheated, but he allowed reason to prevail, besides, walking away would amount to abandoning his mother's memory. Some people would easily lose their children to such an instance.

There are no perfect situations even when dealing with parents who may have taken twists and turns, be they legal or not, to give their kids a decent education and a fitting inheritance.

Questions from Mzee Andrea's story.

1. At the time that he faced that moment of truth, did Mzee Andrea know that John would leave his life and business peacefully or was it by luck? (10 marks)

2. What can be done to restore Peter's faith in his dad? (10 marks)

3. Was Peter right in reaching out to his university professor? Why do you think so?(10 marks)

4. Would you say that the succession was well handled given the circumstances? (10 marks)

5. What in your view would have happened had Mzee Andrea died while John was still in the business?(10 marks)