Family-owned businesses can continue to drive economic success, create value for shareholders, and positively impact their communities worldwide by staying true to their core values and adopting strategic practices that prioritise long-term growth, efficiency, and resilience.
Halima Aliko-Dangote, Group Executive Director of Dangote Industries Limited, made the submission in Bangkok, Thailand.
She spoke during the Forbes Global Chief Executive Officers Conference.
Aliko-Dangote, who is also the Executive Director, Family Office, spoke at the panel session on: “Family Business: Looking at the Next Frontier,” opined that family-owned businesses have demonstrated exceptional resilience, navigating challenges and thriving over multiple decades.
Other speakers include Carolyn Choo, Managing Director and CEO of Worldwide Hotels; Rose Damen, Managing Director of Damen Yachting, third-generation family shareholder of Damen Shipyards Group; and Caroline Link, Co-Chairman of B.GRIMM Pharma, President of B. Grimm Joint Venture and Board Member of B. Grimm Power.
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Aliko-Dangote stated that success in family-owned businesses starts with shared values, goals, governance policies and alignment adding that reputation is part of Family Capital.
According to her, governance structure, adherence to core values, customer satisfaction, optimisation of shareholder value, meritocracy, integrity, leadership, brand equity, diversification/growth, philanthropy and preserving generational wealth play key roles to the success of our businesses.
She opined that Dangote Group’s governance policies do not allow board and management to operate in silos as each business unit have at least three independent directors that will give a holistic view.
Speaking on other factors of success for Dangote Group, she emphasised: “We family-owned businesses have to stick to our tradition of asset rich-cash moderate or as my father will correct me, asset rich-cash poor.
“We as Dangote perpetuate a profitable business with strong values and a strong governance structure.
“We make money while building our nation by contributing heavily to the global economy, creating massive jobs, thinking of our great grand kids and contributing excessively to humanity.”
Highlighting the significant contribution of FOBs to the global economy, Aliko-Dangote noted that studies by Mckinsey showed that they account for more than 70 percent of global Gross Domestic Product, generate annual turnovers of between $60 trillion and $70 trillion, and provide around 60 percent of global employment.
She stressed the crucial role these businesses play in creating jobs, sustaining communities, and driving development in sectors such as manufacturing, education, healthcare, and infrastructure across the world.
She added: Family-Owned Businesses have proven to be resilient, weathering challenges and thriving across multiple decades.
“Despite facing external pressures, many FOBs not only survive but also grow, contributing significantly to the global economy in ways that are often underestimated or overlooked.”
Aliko-Dangote also pointed out that FBOs often employ two key approaches in preparing the next generation for leadership roles: internal and external capacity building.
Regarding internal capacity building, she explained that many families create internship programmes for young family members interested in taking over the business or assuming leadership positions.
She said: “In Nigeria, we train the next generation so they can grow organically to leadership roles in family businesses.
“My dad’s approach is for you to start from the ground up, knowing you will get to a leadership role if you work hard and do your job right.
“These experiences make it easier for you to learn the ropes and be prepared for a leadership role in the future.”
On external capacity building, Aliko-Dangote discussed the practice of sending younger generations to work in non-family businesses.
This approach enables them to acquire new skills, learn better processes, and gain diverse perspectives that can benefit the family business in the long run, adding that she started her career as an Analyst at KPMG before joining Dangote Industries Limited.
The approach she explained, “removes the familiarity tag as the young generation got employed as other people and supervised to monitor their performance.
“This has been a common avenue business families have chosen to pursue for many years, having their next generation spend three to five years working outside the family business before eventually joining with a new set of skills and business knowledge.”
Addressing the challenges of succession planning, Aliko-Dangote emphasised the importance of involving the younger generation in the business early on.
She suggested that this creates a space for open communication, where the next generation can share their thoughts, ideas, and aspirations, while the senior generation provides critical information to help the next leaders make informed decisions.
She stressed the need for a balance between tradition and innovation in family-owned businesses.
While tradition provides continuity and stability, she noted that innovation is vital to staying relevant and competitive in the modern marketplace.
Aliko-Dangote added: “Successful family businesses recognise the need to adapt to changing consumer preferences, technological advancements, and market trends.
“Family businesses often have a wealth of experience and deep-rooted traditions.
“They can also benefit from external expertise and fresh perspectives.”
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