Older folk perusing the Business Section (Yellow Pages) of a 1970’s copy of a directory of the former Guyana Telecommunication Corpora-tion (GTC) would probably commence reminiscing about businesses of yore. Smiles might accompany their nostalgic recall of visiting entities which are no longer around, such as Sandbach, Parker & Co. Ltd, T. Geddes Grant Ltd., Tang’s Bakery, Graphic Bookstore, Harlequin Bakery, Kwang Hing’s Supermarket, Joe Chin’s Travel Service, Kirpalani’s White Shop, Piggott’s Pharmacy. The list of forgotten businesses is long and never ending; the flashing neon sign of Rendezvous Restaurant, Brown Betty, Nifty’s Soda Fountain, Ascot Racing Service, J E Duarte Hardware Store, Black Pussy Cat, Wig and Gown, and Lee Ting Laundry.
As one continues with the forensic audit of the GTC collectable item one is quite surprised to discover that several businesses of that period are still thriving. How come these businesses survived, while the previously mentioned organisations which appeared destined to be fixtures on our commercial landscape are no longer around? There are several reasons why these establishments are no longer functioning. The 1970’s was a rough decade for the business sector in Guyana; there was the worldwide oil crisis of 1973, the commencement of regular blackouts (mid-1977), mass migration to North America, foreign exchange shortage (despite which the Guyana dollar remained relatively stable), and restrictions on the importation of many items. Political ramifications – the declaration of a Socialist path by the then PNC government and the introduction of National Service and the accompanying rumour that it would be made mandatory- also had its effect on entrepreneurship. Changes in the law led to the direct closure of betting shops such as Ascot Racing Service.
It was a period of time during which Darwin’s Theory of Evolution was applied to businesses – survival of the fittest. In some quarters it will no doubt be suggested that some organisations survived because of political alignment or because they were considered essential businesses and as such were allowed access to scare foreign exchange. Yet several entities battled through those testing conditions and are still around today. Some changed course entirely, shifting from overseas supplied dependency to local input oriented businesses. Several of these organisations which are family owned not only weathered the storm of the 1970’s and the ensuing decades of the ever shrinking value in the Guyana dollar, but have managed the succession of the business from one generation to the next. In some instances, notably, the very carefully managed entities, they have even transitioned to the third generation.
Successful transfer of management and ownership of a family business is a much more complex matter when compared to say the appointment of managers within a multinational corporation, which operates within specific guidelines and structure. The subject has been the focus of many studies and dissertations, more so in the recent past with the Covid-19 pandemic and all the uncertainty it generated. Research by PricewaterhouseCoopers (PwC), the international services company has determined that 43 percent of family businesses don’t have a succession plan in place, and with only 12 percent making it to the third generation. Many patriarchs and matriarchs, who quite often have such a commanding presence in the business, are very reluctant to even discuss handing over the reins of power, much less to actually performing the act. Families tend to procrastinate on the issue since the discussions can be an emotional and stressful experience.
Circumventing the dialogue is a complete paradox to the way in which family businesses tend to be managed. Their planning is often long-term oriented, as the adage goes, families think in quarter centuries, as opposed to their counterparts who think in quarters. If the patriarch/matriarch wishes to function as the steward of future generations, succession planning has to be an ongoing process. It’s not a one-off event such as a swearing-in function, and it avoids waiting until the last moment or when a tragedy occurs and there is no other choice, which then puts the entire family business at risk.
Research has shown that the first transition is often the most difficult to complete as the firm transitions from a centralised form of control to a shared governance structure. This scenario often leads to the crucial question of how soon should the next generation be encouraged to get involved? Some management consultants are of the opinion that it is never too soon to get them involved, and failure to do so can create a lack of interest, or inadequate preparation on the founder’s part of his successor to face the challenge of leading the family firm. Of course, there is also the question of sibling rivalry as to whom is selected to be the crown prince, in the case of a large family.
Whilst this column has only glossed over the complexity of family business succession, it is important that we salute these family businesses that stuck it out through very difficult circumstances to provide us with goods and services, and continue to do so. At the same time, we can only regret that our country cannot enjoy similar long-term planning and execution like a well-run family business.
