In this outdoor space creatively transformed into an inspiring green harbor, the words “Lazy People Can’t Live In My House. Bring Me The Remote” are imprinted on a throw pillow that adds a pop of color to an L-shaped sofa. An outline of the continent of Africa is imprinted on another pillow while Wangari Mathai’s caricature takes pride of place on a third pillow with a well-tended lawn forming a backdrop against this peaceful setting. A fireplace takes pride of place next to the sofa and the blackened soot wall right above it provides evidence of its well-used status. Soft sounds, more like rich bell-like tones emanate from two wind chimes on the wood panel above adding a musical note to the rich tapestry of plants hanging off the wood panel.

The Inquisitor had the pleasure of interviewing James K. Mwangi, director at Enashipai Resort and Spa at his home in Nairobi. Enashipai is one of the few businesses the family owns and he spends much of his week in Naivasha as it is where the resort is located.  

With your frequent trips between Nairobi and Naivasha, have you ever been pulled over for a traffic offense like speeding perhaps because you were late for a meeting?

(Grins)

I have had other fines but not speeding, and the reason for that is firstly I am not an exceedingly fast driver and secondly the road is always quite congested. The opportunities to overspeed are non-existent.

You’ve mentioned that the road is usually congested, so how have you made that trip enjoyable for you?

 I decided to use that time to listen to podcasts or music and I never notice time passing by despite how crazy the road can get.

Do you have a favorite podcast?

 I have no favorites yet, but I am currently listening to David McQueen who speaks a lot on leadership. I have been on him for a while now.

Let us go back in time to when you were in school, did your parents want you to pursue a particular career?

No. My parents pushed me to do well in school. They were not too particular about the career. They felt that if I did good, then I would turn out well.

I wanted to do law after high school, but I unfortunately couldn’t get in because I missed the entry level points by a point. I ended up studying engineering.

How did you get into the family business?

 It was a bit by accident. Both of my parents were in formal employment when I started my career. They did not have a business then. The opportunity to start one came only after my Dad retired. He had interesting ideas and I was pulled in because he needed help in trying to execute the ideas he had. That is how I left formal employment and joined the family business.

What primary roles do you and your siblings play in the running of the family businesses?

 I have two brothers and a sister. The elder of the two brothers [they are both younger than me] leads a separate family business. My youngest brother is in sales and is now starting to learn how the businesses work. My sister has decided to focus broadly on real estate, marketing and communication for all of our family businesses.

Is their involvement at a management or a directorship level?

 It’s a little bit of both. In as much as my brother and I run separate businesses, we get to exercise oversight over the businesses that we are not operationally involved. For instance, my brother is the executive director at Fone Solutions Limited while I am the executive director at Enashipai Resort and Spa. As the executive director, I am responsible for answering any questions that the Enashipai Board may have regarding the business. So, on one hand, I am in management, but on the other, I represent the organization at the board level.

Who sits on your board?

 We have an Advisory Board consisting of three independent members as well as our mum, my siblings and I.

For how long have you had the board?

It’s been in place for close to a year and a half now. We only filled three of the intended five positions as a start as we are still slowly evolving as a business. There is a lot that we need to learn, and we are therefore trying to figure out the exact skills that we require on the board and how to go about filling them.

Before the passing of my father in late 2018, we had started the process of establishing a board and defining the roles we would each play in the business. Unfortunately, we did not close out on that process then. After his demise, we needed to define a new reality.

We needed ‘someone’ to oversight us, and we therefore opted to start with an advisory board. Our board chair has been quite instrumental in helping us lay this critical foundation of the board. Our next board meeting is going to be in November, which I think will be our fifth board meeting.

Talk to us about the positives you have observed in the efforts you have made to streamline your existing governance setup.

 I think the biggest benefit we have seen through this process is that we have gotten to a place of greater clarity. Because we are addressing a board, we are cognizant of the level of scrutiny that will go into the work we present to the board regarding the performance of the businesses. There is a clear difference in how we run the business now that we have a board.

With the feedback we receive from the independent directors, we find that we are refining the quality and type of information we consume for purposes of decision making. The board is clear on what it wants and how it is measuring our progress. It has been quite a demanding process but a beneficial one nonetheless. Everybody has benefitted including our staff.  I would encourage any other family business to establish a board if they do not already have one.

How do you maintain professional relations amongst yourselves as siblings? How do you run your meetings as a family?

 We purpose to catch up every month so that we can talk about the businesses. We had a performance review meeting today right before I joined you for this interview. We get to review information from management and do not have to wait for our board meetings to look at the information. We do this without management present. Usually, we set an agenda so that it is clear what we are going to do. We have a board secretary who is not part of the family who takes our minutes. She organizes the time and space and ensures everything works perfectly. In as much as our meetings might be informal, we try as much as we can to formalize them.  We hold ourselves accountable to what we agree to, “This is the date, this is the meeting, this is the agenda, let’s be here from this time to this time,”

We have started the process of implementing a family constitution and I hope that before the end of this year we will have signed off on it. A lot of steps have been made to ensure there is clarity in how we deal and relate amongst ourselves regarding the businesses.

What in your opinion is the “elephant in the room” when it comes to running a family business?

From experience, informality is a major issue in most family businesses. Because my roles and responsibilities were very fluid when I joined the business, there was no clarity on how the effort I put into the business was quantified. Also, in a family business, you do not come in through a typical interview process, neither do you have a documented job description. I came in and was paid what Dad thought I needed to be paid. I think the vision at the time was, “Let’s first grow value and see how things will turn out.” Compensation was therefore a silent issue that we struggled with. From a founder’s perspective, it is easier to quantify their effort because of the money they have invested in the business. It is not the same for those joining the business later. I think in African businesses, such discussions are not held, and that can lead to a lot of confusion and difficulties. When things are going fine and everything is okay, it’s not a problem, but if the patriarch dies, then you have so many unresolved issues that come up.

Over time however, things have gotten better and we now see the importance of having a family constitution to guide us on how to make these decisions. The next generation coming in or any other family member joining the business is unlikely to face the hurdles that we faced. While starting, informality may be good for the business as you are able to make quick decisions, but I think people need to anticipate or learn that informality could grow to become a deterrent and should be addressed at the very beginning.

How about succession?

 We are currently dealing with succession in terms of transitioning from the first generation to the second generation. Our focus is on setting up the appropriate structures for this transition. We have invested in improving all levels of management within the company through training and exposure. We have also instituted governance structures such as the Advisory Board and we are actively working towards a family constitution. With these efforts, I believe that with time, we will have line of sight of what succession will look like as we evolve. We will be able to determine whether we have the best people running the businesses. If they happen to be family members, we will have a process for their assessment. If it becomes evident that we are lacking in capacity, then we will have mechanisms to resolve that. These are the issues that I believe we will start dealing with soon, but I would say we are on good ground because we have the processes in play.  Fortunately, there are many resources that we also use to make our process easier (internet searches, books, podcasts, other families and their experiences, institutions such as Strathmore University.)

Do you personally have a “manual” that you refer to when faced with a difficult decision relating to the business?

 (Laughs)

The occasions have been rare but when they have come up, we try to address them at the management level. First, can we as management deal with it? If yes, then the decision is made and if not, then the decision is escalated to the board level. But before it goes to the board, we sit down as a family and have a go at it. Do we understand why we are not able to solve it? What are the options available to us? Do we pass it on as an agenda for our next board meeting? Or if it is something that cannot wait, do we call the board for an extraordinary meeting? We always try to find a consensus as a family. The ‘manual’ I would say is a participative process whether it be with management, the family, the board or with a professional.

As the owners of the business, do you take the advice given to you by the Advisory Board without question, or are you selective with their advice?

Firstly, the process that we used to recruit the Advisory Board members was thorough. We have three competent independent directors who give sound business counsel. What we do is we use their input to improve our thinking and then find a consensus on how to proceed.

Why do you think many businesses take so long to institute critical governance tools such as an advisory board?

 The biggest challenge is getting the founder to separate themselves from the business in a formal way. Secondly, because the process is long term, it is difficult to get the buy-in because of the aspect of time. Thirdly, lack of resources, not just financial but time as well, is another challenge.

In our case, we have stuck with the process despite the difficulties wrought by COVID-19. We have identified the structures that we need to set up and have remained focused on seeing them implemented.

I understand the competing priorities that most entrepreneurs deal with. Sometimes you also don’t get complete buy-in to institute these structures. Again, with us, after Dad’s passing, we all signed up for the Family Business Program at Strathmore University. They introduce you to governance and take you through case studies. With this, we had a frame of mind of where we were and how we needed to appropriately structure ourselves. As I previously mentioned, it is not an easy process. You need somebody to communicate the importance of a family constitution to the extended family consisting of the elderly and the younger ones. Navigating through all this requires a great deal of resources and commitment.

With more family members joining the business, do you anticipate any issues going forward?

 No, I don’t. We had our first board meeting in August 2020. This year in 2021 we held our first Annual General Meeting (AGM) where we invited our spouses to attend. We also made the conscious decision that children who were 16 and above could attend future AGMs so that even though they’re not actively involved in the business they can begin to understand how things work. I think being more transparent, involving the extended family in the affairs of the business and seeking their input on what needs to happen and giving them an idea of what needs to happen quite early is important for any family business.

Being primarily in the hospitality industry, how have you had to pivot and innovate as a business due to the Covid-19 pandemic?

 A good number of the family businesses are in Naivasha. Here in Nairobi, we had two wings of a floor in a commercial building in Westlands. My brother’s business occupied one wing while the business that my sister and I run was on the other wing. However with COVID, the realities were such that we needed to reduce our costs and had to give up one wing and fit all businesses into the other wing.

But you have to survive as a business and so you have to find ways to maintain your revenue in as much as you are cutting your costs. We became innovative and converted some of our Enashipai hotel rooms into meeting rooms which was convenient for those who needed to continue working while simultaneously vacationing. We also converted some of the Enashipai cottages and villa rooms into self-catering units which was convenient for those traveling as a family or as a group.

We became flexible on cancellation policies because of the uncertainty and the lockdowns. We however encouraged our clients not to cancel and requested that they postpone their stay at the hotel. We were fortunate because those who agreed to postpone were more than those who canceled.

People went cashless and went online to make their purchases and hotel bookings. We had clients check in by sending all their information beforehand and paying online and when they came, they only had to sign a form and we handed them a key. One-on-one interactions were very minimal. I believe some of the innovations will continue working in the industry long past COVID, because they made people more efficient.

It has been a difficult period for James by virtue of the vagaries of the hospitality industry he plays in. But despite all this, there was a sense of optimism of better days ahead as evidenced by his family’s commitment to establishing proper governance structures.  Having experienced the inefficiencies of informality, James and his siblings have gone out of their way to set the business on the right trajectory for purposes of sustaining the family’s business legacy.  He mentioned that they continue to learn and evolve with each interaction with their Advisory Board which they hope to expand in both membership and mandate.

 Here is the Inquisitor’s take:  Governance is an expensive process no doubt. It is a long-term investment that helps the organization navigate its existence as the marriage vow “through good and bad times” portends. James concluded that despite the difficulties brought about by COVID-19, the family has committed to streamlining their family businesses for the benefit of the generations to come. Their efforts can be summarized with the adage, “Great people plant trees that they will never sit under.”

The Inquisitor.