Could Access Group Kenya Have Inadvertently Charted The Path For Stock Exchange Bound SMEs?
By Mwangi Wanjumbi- Newtimes BS Chief Strategist, Trainer & Researcher
With electioneering behind us and a fully fledged entrepreneurship development docket (combined with industrialization), we had better embark on the process of wealth creation. But, first, does your business organization operate in the SME Sector? Before responding, remember that the sector applies to 99% of all private businesses in Kenya.
So, if your answer is in the affirmative, there is good reason to smile in 2013. Apparently, the focus on SMEs as the engine of global poverty eradication through employment, and wealth creation is becoming more intense than was the case, when it was first conceived in the 1990s.
Moreover, a recent boost to the same is a welcome move of approving the listing of the sector in the Nairobi stock exchange. That is so especially for growth oriented businesses, with a capital base of at least KES 10 Million as envisaged. They can now source equity capital from a designated sector of the stock market.
Somehow, this could contribute in curing the recurrent financial challenges that are uppermost in the minds of most entrepreneurs. Added to this is the opportunity to offload business risks to other investors. Of-course, working capital is foremost of the numerous factors affecting business growth,
Probably, nobody knows the growth inhibitions and listing benefits better than Mr. Kris Senanu, the Managing Director, Internet Division, Access Kenya Group. This is an internet service providing company, which grew from a family outfit to the present public company that was a few years ago, listed in the mainstream stock bourse.
After carefully listening to this CEO, during a recent management forum, I could not help but appreciate the meteoric rise of Access Kenya Group under his stewardship. In my view he has a good wealth of hands on experiences acquired during the 10 years or so that he has spent in the company. Alongside, the company has grown from a workforce of about 15 to the current team of close to 350 employees.
Interestingly, Mr. Senanu elaborated on the path his company traveled to become a publicly quoted. Apparently, this CEO feels that the concept of family businesses could be a misdemeanor. There should be no reference of family business anywhere or anytime. “Business is just business and that’s all,” says he.
Could the perceptions about ‘family business,’ then be an excuse to constrained business growth and development? May be yes or no, but that can only be clearer if we can first appreciate how businesses come into being. Naturally, any business anywhere starts with an idea.
Most often, it is the idea of one person or two. In fact, that is how all businesses anywhere have been formed. The only exceptions are creations of the government, churches and sometimes non governmental organizations. This is how entities such as Barclays Bank, General Motors, Coca Cola, East Africa Breweries and millions of other multinational corporations have come into being.
The idea is therefore the initial seed, before any other input is incorporated. When this idea comes from one person who invites other family members either to co-own or implement the ideas, the situation leads to a family business. Do they always succeed?
Obviously some grow into great heights, whereas others just stay afloat. Still others are overwhelmed and cease to exist. Proven research indicates that only 30% of start ups continue existing past the 3rd year. In fact, only 15% of them survive beyond the 5th year.
There are numerous challenges that contribute to this high failure rate, which can’t be exhausted in this discussion. Nevertheless, it may be appropriate to highlight some of the challenges that continue inhibiting desired growth.
In this regard, we need to recognize some insights volunteered during the discussion by Mr. Kris Senanu. In his view, some of the challenges encountered by a growth oriented business can lead to undesirable consequences if not properly handled. Leading them all is poor governance structures. Here, authority is not clearly defined, especially with respect to leadership. Inevitably, the need to consider the existence of a board and responsibilities of each of the members cannot be gainsaid.
Absence of clearly defined roles and responsibilities, leads to squabbles, which are unhealthy for smooth business continuity. Lack of or challenged governance structures also lead to professional inadequacies. Most often, family initiated businesses do not for their own reasons always engage professionals. Alongside, business decisions are emotionally oriented. This occasionally leads to embracing of unviable business options.
The same emotions sometimes lead to challenged succession planning. This is exhibited through excessive reliance on the business founders and their close family units. Under such circumstances, power struggles and personality crashes easily take shape, particularly where outsiders are involved in the management hierarchy. Continuation of these challenges, largely inhibit desirable business growth.
Invariably, the SME sector could now focus towards benefiting from equity funding that has now become a reality. Alongside, the various factors inhibiting growth need to be eliminated, whatever it takes. An ideal solution is to embrace strategic approaches in managing business, while at the same time recognizing the importance of governance structures. The same not only give clear business direction, but also facilitate setting in of the succession planning process. That could naturally lead to infinite growth.
Ostensibly, Kris Senanu must have overcome all the odds outlined and more, to drive Access Kenya Group, Internet Division to what it is today. More importantly, joining the big league of the 50 or so publicly quoted companies was just the climax of the success. No doubt, these are great achievements, worth being emulated. Any reasons that will negate a smooth climb to the top, after all this?
(Welcome for more specific and STRUCTURED learning on this area, in our 2 – 3 day Strategic Leadership and management workshops (For more guidance see training calendar attached))
The Writer Specializes in Business/Organizational Strategy & Change Management Solutions as well as Organizational Transformation largely inspired by high impact Capacity Building Training Solutions and our unique Business Leadership and Performance Management Training/Employee re-branding solutions. Through Newtimes Business Solutions, he also conducts high impact Strategy Workshops and Motivational Seminars. Further, he is a Veteran Company of the Year Award Consultant for KIM as well as a former Daily Newspaper and Business Magazine Columnist.
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