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Competent or confident politician?

Some time ago I wrote an article about Trump as a man whose I’m-OK-You’re-not-OK behaviour, one that required consistent win-lose interactions with others, masked a deeply insecure soul. Yet despite these insecurities, despite this lack of self-esteem, he built up extraordinary self-confidence, and through bullying, cheating and lying he achieved all that he did.

I refer to this as I recently read a provocative article in the London Times about Britain’s immediate former Prime Minister, Liz Truss. The headline said it all: “Truss proves talent-free bluster isn’t just for men”. And the opening paragraph tells us she broke one of the last glass ceilings. Not as the first female PM in her country, for she was not, but as “the first woman to reach the highest office propelled by gargantuan self-belief alone”.

Writer Janice Turner rightly reckons the kind of self-belief she displayed has not been associated with her gender. Indeed, she tells us, feminists have been known to pray “Lord, grant me the confidence of a mediocre man”.

We’ve been reading a lot about women holding back from higher office while younger and less experienced men lobby their way through. Here though, Ms Turner observed “a shameless, narcissistic, talent-free sense of entitlement”. Wow. Lots in common with Trump for sure, and indeed with so many politicians the world over.

I have also written about the competence-confidence matrix, with the competent one who lacks confidence often suffering from the “imposter syndrome”, while the confident one who lacks competence displays a cocky arrogance. The ideal position, as espoused by my heroes such as Ed Schein and Adam Grant, are those who behave with “confident humility”.

So where is Rishi Sunak, Liz Truss’s successor, in all of this? In a much better place. We have been reading about the values with which he was brought up and which it appears he has been able to largely hold on to despite entering the cut and thrust world of win-lose politics: family, honesty, education and hard work. Not a bad quartet.

His competence, certainly in matters financial, is indisputable. And his communication skills are definitely superior to hers. Well, that’s no big deal, as rarely have I come across such a wooden performer as Liz Truss in such a high office. Boy was she in need of coaching…but who knows, maybe her excess of self-esteem over self-awareness made her uncoachable.

How about our politicians here? For sure some are more competent than others, and some are better communicators than others. Many are at their best at high-octane campaign rallies whose objectives are mere entertainment, hype and goodies-distribution, while others know how to switch between such show-business performance and more serious and substantive output.

To be a politician, confidence is everything. As each one puts themselves forward for election, they are certain they will win, however justified or unjustified their optimism. So it was with Truss, so it was with Sunak; and so it was with all our political candidates in August, including those who lost.

Our responsibility as citizens is to study the competence-confidence mix of those who seek our votes, where competence includes adherence to good values and where mere confidence is woefully insufficient.

It was good to see the Mkenya Daima campaign focusing on this requirement for not only selecting good men and women, but then holding those who succeed at the ballot to account. It is why the Mkenya Daima tag line is Nitatenda Wajibu Wangu (I will do my responsibility).

It’s so dispiriting to me to see huge numbers of voters in the developed world casting their support for the Trumps and the Trusses of this world.

It shows the weakness in the civic education provided in so many countries that allows for populist promise-makers to get away with what they clearly should not… including Boris Johnson and his Brexit ones.

We’ve been through our elections just a few months ago. Have we selected enough of the humbly competent? Stay on the ball, fellow Kenyans, as President William Ruto has challenged us to do.

Rishi Sunak promised British citizens a government of “professionalism, integrity and accountability at all levels”. And President Ruto, when he confirmed his new cabinet, also called for integrity and accountability. We must indeed “do our responsibility”.

Remember our national values

It’s quite some time since I wrote about national issues in this column, allowing the extravagant 24/7 political campaigning and the media’s relentless focus on it to sweep over me. Reflecting on it all, plus on the election itself and the days since, I realised that throughout these months I can’t remember when any of our political contenders referred explicitly to our national values.

Yes, there was much talk about national unity and public participation; inclusiveness and protection of the marginalised; ethics and integrity; transparency, accountability and good governance; sustainable development — all which I am quoting from the national values as stated in our Constitution. But as far as I am aware no one directly related such matters to these stated values.

I’ve written before about how our leaders never refer to these values, and not least because they are just a list of 20 words and phrases – including the ones featured above – buried deep in that long, formal document that is our Constitution. I have suggested hauling this list out and reducing it to a small number of short punchy phrases, as countries like Singapore and Rwanda benefit from. Their leaders live the values as role models for them, and talk about them as part of their regular leadership language.

Now that the frantic politicking has calmed down it’s good to look back over the campaigning period. Fortunately, the National Cohesion and Integration Commission (NCIC) has analysed the main challenges Kenya faced in the build-up to the election, and here are its findings:

  • Lack of trust between communities, among leaders and in government institutions.
  • A sub-culture of violence, where politicians manipulate citizens into engaging in aggressive acts.
  • Divisive and selfish politics, where most leaders are more concerned about acquisition of power and wealth, their own self-interest and ambitions, than the wellbeing of the citizens.
  • Ethnic polarisation, simulated by hate speech and other forms of ethnic incitement.
  • Late, inadequate and insufficiently coordinated response to conflict.
  • Structural inequalities in the distribution of political and economic resources, historical and current.

We are rightly proud of the fact that the elections unfolded peacefully, but as we peruse these findings there is clearly much to work on as far as our values are concerned… and this in the context of our national vision, as NCIC’s report concludes: “Most leaders in Kenya seem to have abandoned the nationalist vision of equity and justice, and given primacy to the acquisition of power and wealth.”

Who should take the lead in bringing national values to the top of Kenya’s agenda, so future such NCIC reports can read differently? Realistically, it seems we can rely on only a small minority of our elected leaders to play that moral role. So how can we build a critical mass of influential individuals and institutions to take us to that much better place?

Yes, NCIC is there, and it has been doing well partnering with religious leaders, the private sector’s Mkenya Daima, civil society, youth, communities and government entities. And the CBC’s Values-Based Education is vital for nurturing future generations. Then, where are you and your organisations in all of this?

As we enter a new administration, it is a time of opportunity. Many of those who are the most influential and who should most act as role models for healthy values will remain the ones who least do so. So we must make it harder for impunity to reign.

Transparency and accountability must continue to be enhanced, with the support of technology and with the law and order entities working ever closer together to deter poor behaviour. And if only we could limit the time and cost of campaigning!

Along with being serious about penalising those displaying negative values, we must also recognise and celebrate the good guys, not least through the media. For there are plenty of Kenyans who live good values, however hard that is in our very challenging political, economic and social environment.

On October 20, we celebrated Mashujaa Day. By happy coincidence it coincided with World Values Day, an annual campaign to increase the awareness and practice of values around the world. So let’s bring our national heroes into our values-nudging campaign.

It is a major project, a long journey. One on which we must embark urgently and vigorously. Now.

Managing public service delivery

The roles of Prime Cabinet Secretary Musalia Mudavadi have been defined as follows:

Assist the President and the Deputy President in the coordination and supervision of government ministries and State departments.

In liaison with the ministry responsible for Interior and National Administration, oversee the implementation of national government policies, programmes and projects.

Chair and coordinate national government legislative agenda across all ministries and State departments in consultation with and for transmission to the party or coalition leaders in Parliament, facilitate inter-ministerial coordination of cross-functional initiatives and programmes.

And coordinate and supervise the technical monitoring and evaluation of government policies, programmes and projects.

Very good. Coordinating and facilitating, supervising and overseeing. With Mr Mudavadi’s extensive and varied experience, and as someone known to be “the adult in the room”, I don’t doubt that he will add value. The question I ask is what systems will he have available to support him to play his role effectively – and this without duplicating the not dissimilar functions of the Deputy President.

Different institutions and approaches have been introduced in succeeding administrations to carry out the kinds of functions described in the Prime Cabinet Secretary’s job description. I go back to the Kibaki days when the Public Service Reform and Development Secretariat (PSRDS) brought in such goodies as Results Based Management (RBM) and the Rapid Results Initiative (RRI). I was a member of the consultants for Kenya team that supported PSRDS with these excellent initiatives, which were beginning to make a real difference when it was disbanded.

What largely remained was the Performance Contracting Unit, which had been separate, and then as now it, unfortunately, has fallen far short of delivering on its significant potential.

As I have seen in so many government entities whose performance contracts I have studied over the years — at the national and also devolved levels — the performance indicators very rarely extend to assessing the ultimate desired impact of an initiative.

Instead, the participants play safe, with easy-to-measure mere output indicators, like in this common example. Objective: “Train 40 staff on the XYZ system.” Indicator: “40 staff trained.” That’s it. No consideration of what the staff learned or how they applied it and with what consequence.

As I put it in the many workshops I facilitate on such subjects, those involved were too timid and unambitious to keep asking the “So what?” question, till that ultimate desired impact was defined and hence the extent of its achievement, could be assessed.

By the way, it’s why I’ve never been a fan of the term monitoring and evaluation or M&E as it is commonly known. For it too readily describes what happens. Yes, work is monitored, and yes, it is evaluated – both necessary, and yet unless there is a “So what?” of the monitoring and evaluation in terms of driving higher performance as a result of the M and the E, we have not reached the sufficient.

This is what RBM and RRI were all about. And through the World Bank others and I introduced PM4R – Performance Management for Results. Yes, for results.

So, Bwana Mudavadi, please review the performance contracting system, and ensure that the capacity to deliver what it should is developed and applied. Then, do not have fragmentation of the institutions supporting you and whom you will be supporting.

Take the Vision 2030 Delivery Secretariat seriously, as it drives its five-year medium-term plans and extends its horizon beyond 2030. And do not have other delivery units at the national level that overlap or compete. Also, consider the re-establishment of the National Economic and Social Council. It will help you, the DP and the President.

So much has been learned about what it takes to have high-performance teams deliver on their mandates with impact. We have seen such teams in action at both the national and county levels, and we know the critical success factors involved. In my work supporting the government over the years, I have helped leadership teams overcome non-technical obstacles to performance. Here the challenge of defining appropriate performance indicators requires even more deep thought, motivating and enabling the route to success.

Do not over-complicate the systems, Sir, and focus on the disproportionately significant. But above all nurture a focus on the aspirational future.

In negotiations, go eye-to-eye

How do you get to win-win? By exchanging offers and requests, and indulging in give and take – maybe upfront simultaneously, or maybe over time – now us, then you. Each side is prepared to be “generous” to the other, to make “sacrifices” for the greater longer-term mutual good.

Ethical, responsible vendors look beyond simply maximising short-term revenue. They equally expect to deliver on customer satisfaction, for it is this that leads to repeat business and referrals.

Just like purchasers who look to the future go beyond merely trying to slash the price at which they buy and to extend their credit terms. They know the suppliers too must cover their costs and make a living, so as to be there for them tomorrow.

In leading up to the negotiation the vendor should adopt the mindset of an adviser to the buyer, helping them make the business case for their solution. Yes, solution (not just the product and its features), with its cost-benefit analysis to show it makes sense.

This requires gaining a good understanding of the needs of the buyer – bearing in mind that what they think they want does not necessarily align with your perception of their need. Reaching alignment here in itself can become an important aspect of negotiation.

Are prospects too focused on short-term cost-minimisation? If so how do you move them to look at the broader context of value-for-money? This kind of negotiating is particularly important for suppliers who don’t expect to be the cheapest but to offer the best product/solution with a good return on having invested in it.

This requires preparing a document that goes way beyond a statement of product features and price (a “quotation”) to showing a full understanding of the need and how it is being met, maybe with alternatives and recommendations (a “proposal”).

With capital goods, where installation, maintenance and other ongoing services are provided, one of the biggest challenges is avoiding the blame game when problems arise, which all too often they do.

This requires investing time up front to agree on a code of conduct should such issues emerge. The objective is to keep calm and be solution-oriented, accepting that no one is perfect. That’s negotiating and building robust win-win relationships at the outset.

When I launched my early career as a key account manager of large IT clients, I was much younger than those with whom I was interacting on the customer side.

The challenge for me was to hold my own despite the great age difference, and I found that due to my understanding of the essence of the business case for our solutions I was confident enough to engage with such people as adult to adult, as equals. I respected them, and they respected me; we listened to one another and co-created the way ahead.

There are plenty of confident young people, and not least here in Kenya. Equally though, I have found many who feel intimidated by elders, not least in our society where the older you are the more respect you expect, and that your way will prevail.

(Now well into my third age I push back whenever I feel I am being offered excessive respect purely as a result of being a mzee… or, for that matter, a mzungu.)

So when it comes to negotiating, at whatever age – or whichever gender, it is vital to overcome feeling inhibited merely because of being younger or being a woman. No, enjoy interacting with prospects and clients eye-to-eye. Yes, enjoy.

Chat about other things; laugh together; commiserate. Treat them as partners, where both you and they will do well from the relationship and where you look forward to interacting. That’s how your first contract with such a customer will be far from your last.

The softer side of Kaizen

The Kenya Association of Manufacturers and the Kaizen Institute recently held their 17th Annual Congress, and I’m writing about it as I was one of the keynote speakers at the event. I have for long been an admirer of Kaizen, which is all about waste reduction and continuous improvement.

It was first largely applied in the manufacturing environment, but it soon spread to other sectors – for who doesn’t want to do away with waste, and shouldn’t we all be focused on continuous improvement?

The reason I was asked to contribute to the congress is because however necessary the technical aspects of Kaizen are, the waste reduction and improvement cannot be actualised unless the non-technical, or human, aspects are also taken care of. This is what takes an organisation from doing the necessary to thinking through to the sufficient.

These non-technical aspects require a significant investment of time and resources, but many technically-focused and task-focused people complain that this just takes away from efficiency, delaying the completion of tasks. Yet what they do not appreciate is the consequence of not investing time in aligning those involved in the tasks with each other.

It is this kind of neglect that sees people confined in their narrow functional or geographical silos; focused on short-term sub-optimisation at the expense of long-term sustainability; witnesses them indulging in conflicts that lead to stalemates and prevent timely or appropriate decision-making.

When attention is not paid to how well people communicate with one another, some will stay silent without contributing their thoughts, some will be too assertive, and poor listeners.

So my presentation urged the participants not be so “efficient” that it prevents them from being “effective”, suggesting they should invest time in building high-trust relationships, that then enable collaboration and consensus building.

They should also invest time in building a coaching mindset in their organisations, so their people develop and where personal goals align with organisational ones.

The return on this investment is that the staff will offer superior contributions, and good people will be attracted and retained, as they learn and they grow.

By taking time to develop both their technical and non-technical skills, and within a high-trust culture, leaders will feel comfortable empowering others and delegating to them, freeing them up for more strategic activity.

Another “inefficient” use of time is holding back from the default position of telling others what to do, but rather taking time to understand before seeking to be understood. For we must accept that we don’t know what we don’t know.

The speaker before me was the Kaizen Institute’s Joint Managing Director Jayanth Murthy, who proposed that we all pray for “Better, More, Faster”, for quality, growth and speed – which is what Kaizen delivers.

He reminded us that most strategies fail because of poor execution, and showed us a cartoon of a pair of exhausted fellows pushing a cart with square wheels… while within the cart are round ones!

He then gave examples of how this is manifested in real life, quoting Charles Darwin’s observation that “it is not the strongest of the species who survive, or the most intelligent, but those who are most adaptable to change”.

After me came another confident optimist, Jas Bedi, the Chairman of KEPROBA, the Kenya Export Promotion and Branding Authority, who talked about the huge potential in Kenya for import substitution and exports, and about the need to have a borderless EAC and for the continent as a whole. We must add value, and consolidate imports as a regional redistribution hub, he also insisted.

The room at Kempinski was filled with Kaizenologists from leading manufacturing companies around Kenya… all taking “inefficient” time away from their tasks back in their gemba (Kaizen terminology for the workplace), so as to learn and to share. Ah yes, the full spirit of Kaizen lived here: the best knowing they can still get better.

Taming the abuse of power

Readers of this column will have seen previous articles of mine in which I have written about Leaders Circles I have facilitated with my colleague Frank Kretzschmar. The last one was about sustainability, and the theme of our most recent one was “How we deal with power: from victim to perpetrator to victim”.

We’ve all heard that “information is power”, and as Frank and I looked up other suitable quotes before our story-telling gathering we came across some useful provocations, including “Power is always dangerous. Power attracts the worst and corrupts the best,” from doomsday merchant Edward Abbe; and, also pessimistically, William Gaddis shared that “Power doesn’t corrupt people, people corrupt power.”

More upliftingly, Lao Tzu told us that “Mastering others is strength. Mastering yourself is true power.” And Alice Walker reminded us that “the most common way people give up their power is by thinking they don’t have any.”

How power is wielded lies at the centre of whether things work or don’t work, we briefed our participants as we invited them to the event. Power itself is values-neutral. So at what point does it become good or bad? Where and how does abuse begin?

Who determines that power was indeed abused? How is it even possible that power does get abused? Does it happen when moral concepts are excluded from the exercising of power? When corruption is used to distort rules of the game that had been based on a broad consensus? When individual powerful people lose all sense of self-awareness and proportion?

We are seeing that too many neurotics and egocentrics are key players in the power game. And as a result, we give up on essential issues out of comfort, thoughtlessness or anticipatory obedience. They then take advantage of the resulting vacuum. Are we not to blame for this?

So how do you tame the abuse of power? As leaders, you cannot do without power. How do you empower yourself and others? And how far may or must you go in order to gain (back) power and influence?

How do the exercise of power and ethical action coexist, for there are fewer and fewer fixed reference systems? Exercising power without stepping over the boundaries of individuals is not possible. But is it possible to exercise power while remaining innocent? It is undoubtedly a question of balance.

We were interested to hear where and how those who participated in our event have succeeded in keeping power in the good area, and this we certainly did. We learned about the challenge of leading volunteers, in business and professional organisations, and in service clubs like Rotary and Lions.

And we talked about the need to “decolonise” and spread decision-making from the over-influential Global North towards the Global South, including in how research funds are allocated.

We also heard stories of power abusers – from our own traffic police to Vladimir Putin – and of being the direct victims of more powerful and unconstrained players.

One spoke about the fragility of power, as evidenced in the Arab Spring (and more recently in Sri Lanka, and with Johnson in the UK); while another worried about the constraints faced by the UN Security Council in fulfilling its mission of holding the world together.

I reflected that rather than wanting to feel powerful, my expectation was and is that I can be of influence, and above all in bringing people together – as a mediator, an integrator, a connector.

I enjoy helping others to building their capacity so I can empower them, and hence delegate to them. I see the goodness of power-sharing, which requires openness and trust.

Here I am, deep into my third age, a time of life when most of us no longer expect to wield direct power (except, perhaps, in the political arena). One way in which I hope I am being of influence is through these columns.

A few weeks ago I published by 400th one, and this one marks fifteen years since by first contribution here. My sense has always been that I largely preach to the already converted, but my hope is that my readers will emerge reinforced in their views, and so promote them more boldly. I might even convert a few here and there, and who knows, perhaps enable them to become more powerful.

In closing, I urge you to exercise your power by voting next month for men and women who will wield power responsibly. Or else you will be their victims. But hey, I’m preaching to the converted.

Avoiding family wars that ruin businesses

These days I am being invited more frequently to help align family members within their businesses so they can lead the organisations they own more effectively.

I am encouraged by those who reach out to me for such assistance, as it speaks of being realistic about the importance of cohesiveness among them and of feeling optimistic that they can indeed do better.

In my capacity as an adviser — or, as I often label myself, coach — I first listen to each family member involved, getting a sense of their personalities and styles, and of the roles they play in their enterprise.

In a spirit of “appreciative inquiry” I like to start by having them tell me about the achievements they are proudest of and the strengths that explain them, and then asking them to share the challenges they face — including and not least with other family members.

For this to happen I don’t rush into these topics, but begin by building a relaxed, cheerful and trusting relationship with them, getting them to talk more generally about their lives, while revealing something about mine.

Business school

As I was preparing to write this article I caught sight of a book I’d bought some years ago at the London Business School bookshop but had never got round to reading.

Published in 2008, Family Wars is about some of the biggest family-run companies in the world, showing how in-fighting among family members threatened to bring about their downfall.

It covers families such as Ford, Gucci and the Watsons of IBM, using these as examples of different categories of wars, not least between fathers and sons, among siblings, and as a result of marriages between families.

It also provides advice for anyone involved in a family business, offering suggestions on how to avoid such problems.

The book’s authors are London Business School Prof Nigel Nicholson, whose research interests include the psychology of family business, and Grant Gordon, the director-general of the Institute for Family Business and a fifth-generation member and former senior executive of William Grant & Sons, the distillers of Glenfiddich whisky (my favourite).

Despite relating stories of specific family “wars” they are careful to point out that many with family ownership outperform other kinds of organisations, and that some of the world’s oldest companies are those that have remained owned by their founding families.

I related very closely to what I read about both the kinds of challenges that family businesses commonly face, and how to prevent them and handle them if and when they arise.

Not least about the wisdom of “appointing skilled non-family professionals to fill business leadership roles”; “appointing a neutral ‘ombudsman’ as co-mentor of a sibling team”; and “instituting appraisals and regular feedback on work output and mentoring for family members”.

Not surprisingly, Grant and Nicholson refer to the lack of trust as “the real killer”, where one person sees another as unreliable, inconsistent, devious or duplicitous. And – as I do – they advocate for a spirit of forgiving and seeking forgiveness.

To avoid undue conflict, a culture of equity and fairness must prevail, with no cheating and taking of shortcuts. Worst of all is the hiring of lawyers to sue one another, never mind if the dirty linen starts getting washed in public.

Just as insufficient cohesiveness leads family members to either waste energy in fruitless attempts to win battles at the expense of a relative, or to disengage and scatter, so excessive cohesion, where families retreat into their own exclusive world, are also unhealthy.

Consensus builder

The challenge is to nurture an atmosphere where differences can be aired and consensus built, in a spirit of give and take.

Yes, we want the leadership team in family businesses to be diverse — including these days by including the women. We want representation of a spectrum from elders to millennials, and it’s good for members to have varied exposure to education and to other cultures and countries.

Some will have a greater appetite for risk than others. Some will be more focused on longer-term sustainability and on being fair to all key stakeholders and some will be keener than others on professionalising.

The question is how such diversity can be brought together without generating wars, and by whom.

Who in the family is the consensus builder, the mediator? Or does the business, as so many do, require external help to keep the peace and allow each family member to contribute and thrive in their own way?

How firms can handle integrity lapses by staff

In PwC’s 2020 global economic crime and fraud survey, Fighting Fraud – A never-ending battle, fraud was identified among the top concerns. So the ability to identify fraud perpetrated from either within or outside the organisation and then to deal with it swiftly and fairly is critical.

In one large local company on whose board I serve, I chair the Board Audit, Risk and Compliance Committee, where the issue of identifying and handling fraud and other integrity issues features prominently. So let me share the lessons we have been learning in dealing with such matters.

A major challenge organisations face is just gathering information on fraud being perpetrated by employees or others, which is why many have invested in ways of making it as easy as possible to communicate information about integrity lapses.

These include ethics hotlines, compliance web portals, and email contacts to which to send such information – often outside of the organisation, and typically to an audit firm.

Not surprisingly perhaps, utilisation of these platforms is relatively low when compared to informal reporting, or finding out about cases through the grapevine.

Organisations, therefore, need to build cultures and systems that enable whistleblowers to feel it is the right thing to do and to feel secure about doing so. Some even provide monetary incentives, although this may encourage false whistleblowing – a not unusual occurrence anyway.

The speed with which reported issues are investigated, action is taken, and communication is fed back to the whistleblower, has a direct impact on confidence in the process. So there must be adequate investigating capacity, with staff possessing the relevant forensic experience.

Matters reported must be handled with utmost confidentiality, for whistleblowers need to remain anonymous, thus minimising the chances of retaliatory actions being taken by those involved in the integrity matter.

Then, staff in departments that are likely to access information on matters being reported – such as ICT, investigations and internal audit – should sign Non-Disclosure Agreements.

Some decide to sue staff for damages resulting from integrity issues, pursuing criminal and/or civil litigation. But the evidence threshold for successful litigation is extremely high, so one must ensure that documentation and other sources of evidence are impeccable – no mean feat.

For criminal proceedings, the investigating officers and prosecutors need to be properly appraised of the matter to ensure they fully understand the issues, prepare robust witness statements, and hence prosecute successfully.

In addition to the evidence, witnesses must come forward and corroborate that evidence, so organisations need to publish guidelines on witness protection, together with incentives to encourage witnesses to be present in what are likely to be lengthy court processes.

When obtaining evidence from private investigators, one must ensure that it is obtained through legal means, so that it can stand scrutiny in court.

Organisations also need to be alive to the fact that fraud can be perpetrated by anyone – even those responsible for ensuring internal compliance and investigating abuses.

Serious background checks and vetting therefore should be carried out before onboarding such staff, and an internal mechanism must be put in place to ensure that fraud perpetrated by staff in these offices can be detected.

In staff induction programmes the value of integrity and the importance attached to compliance should be included for all staff, and there should be continuous emphasis by all levels of management on these subjects in staff meetings.

Alongside this, those who uphold the value should be recognised, while those who do not should be penalised.

A major fraud risk results from conflicts of corporate and individual interests. It is therefore important for staff to be given an opportunity to declare such potential or actual conflicts so as to remain relaxed in their roles.

The process of making declarations should be continuous, so that staff are given an opportunity to declare interest conflicts upfront.

What happens when there is proof of culpability, and the organisation wishes to recover its losses from the employee?

With the slow pace of court litigation, it takes forever, diminishing the value of any recoveries. And that’s if the verdict is favourable, in itself of relatively low probability. But at least with the introduction of the Small Claims Courts such matters will be concluded much more quickly.

The more I have been involved in these integrity and compliance issues, the more I have realised how complex and challenging it is to deal with them, and how one must keep constant focus on them and keep applying the lessons learned.

Why it’s a good idea for family businesses to form boards

Much of my talk with owners of family businesses is about whether the time is right for them to create a formal board with independent directors.

Very few do, even where their companies have reached a significant scale. So I was pleased that on a recent webinar hosted by Sirdar, the South African-based organisation that helps build better boards around the continent, this was the topic of discussion.

There was easy unanimity among the contributors that appointing independent directors is a good idea. So why are most family business owners reluctant to bring in such independent voices? What do they fear? Why do they hold back from what is commonly labelled as “professionalising”?

Well, they’ve never done it, and doing so has never been on their horizon. As one owner-director-manager put it to me, “My brother and I just talk about things like strategy as we drive to and from our office,” and another does so with his father at their family Sunday lunches. That’s worked well enough, they reckon.

But as younger generations have been emerging into senior leadership, and as “sustainability” is entering the mindset of SME owners, more family businesses are bringing external minds into their worlds.

Not to hand over control to them, and perhaps not – at least initially – to have them be full directors with fiduciary responsibilities, but to be “advisory” board members. This way they can test the waters, seeing how much value they add and how well the chemistry works between them.

A common concern is loss of control, having been used to always acting as the sole decision-makers. Yet disagreements among family members are all too normal, and a common role of independent directors is to act as mediators and consensus builders.

More so if they are offered the position of chair – in itself recognised as displaying good governance. This implies seeking individuals with high emotional intelligence, able to bring together different perspectives.

The challenge is often between generations, where younger, more exposed directors may feel constrained by their elders – who remain convinced that the way they’ve always been handling the business should remain untouched. “If it ain’t broke, why fix it?” they pose.

A major benefit of bringing non-family members into a board is the formalisation of strategy development and implementation, along with more effective performance management.

Professionalising also implies having a Board Charter; circulating board papers in advance; and agreeing a calendar of board meetings (and perhaps board committee meetings, assuming the appetite exists), at least quarterly and each with their purpose and agenda. In these ways the business becomes more focused on the longer term – and is therefore more sustainable.

How do owners go about identifying the benefits they can enjoy as a result of appointing independent directors? It’s not hard.

The family decision-makers are typically the father and two or three from the next generation, maybe brothers, maybe cousins, and now including the occasional female member. They should list the areas where they are strong and ones where they are less so, and seek external contributors to fill the gaps.

Likely candidates will have their own functional, geographic and other experiences; they will come with complementary educational backgrounds and networks; and their personalities and styles will be compatible with those of the family.

It may be good to offer them initial engagements that don’t even include directorships. To offer a personal example, in a couple of family businesses where I was invited to be a director, it was after carrying out some consulting activity with the company. They were happy with my contribution and my style, and I felt comfortable with them.

Even once appointed, there may be benefits in having the independent directors carry out activities beyond merely attending board and board committee meetings. They can guide strategy retreats, meet stakeholders and offer other areas within their expertise.

At the conclusion of the Sirdar webinar, one of the panelists’ closing comments was to urge families to bring in external directors, as his family business had done to great effect. And for my conclusion here I turn to Manu Chandaria, whom I interviewed recently on a Nairobi Business Forum webinar.

In commenting on how it was that he and his family managed to grow their business to the scale they have achieved, one of his explanations was the bringing in of professionals as both board members and executives at an unusually early stage of their development. So if you are running a family business, try it!

Dr Manu Chandaria Wisdom Session with Irene Gathiaka & Mike Eldon

(Dr. Chandaria wasn’t able to join us for a while, so I filled in by offering some background on him and on our efforts that led to the launch of KEPSA.)