The Eleganza Group and the crisis of succession

Let me say this very quickly: I am very interested in succession planning in our large businesses, and once organised a session on it where I flew in an international expert to lead a class.

The late Otunba Subomi Balogun sent in a brilliant speech.

Alhaji Okoya’s Eleganza Group did not attend nor send a representative, hence the impending succession implosion analysts have begun to envisage in the huge enterprise.

Alhaji Okoya has always been a person of interest to me.

From selling buttons inside Isale Eko, he was able to build a massive business that expanded into manufacturing, real estate, and other major sectors.

At its peak, Eleganza plastics and biros were a mainstay of the Nigerian economy.

This brought tremendous wealth and influence.

His foresight saw him building the huge sprawling fortress on Ikoyi Crescent at a time when other investors were not even looking at that zone.

Just when the market was catching up with him, he moved to the sprawling lot on the Lekki–Epe Expressway, also at a time when that entire stretch was virgin land.

Such was his acumen that he became a legend, an entrepreneur who studied in major international business schools despite his humble educational background.

The Okoya wealth is firmly rooted in the old economy of rent and manufacturing, with no real visible sign of leveraging technology to leapfrog into the quantum shifts of the modern economy.

As the huge conglomerate continues to choke under the ever-present challenges facing the brick-and-mortar economy — energy costs, dwindling markets, obsolete machinery, etc. — the patriarch now appears to worsen the situation.

He introduces a succession lacuna guaranteed to drive a life-threatening wedge into the already dwindling fortunes of the Eleganza Group.

He recently announced that his younger children would take over leadership upon his demise.

This statement landed with a thud, and it took all of his goodwill to prevent public turbulence.

It merely amplified what has already been clear in the market.

His lovely and obviously brilliant wife, Shade, is the Group Managing Director of the Eleganza Group.

The older children have not been seen anywhere near the sprawling businesses within the group, except perhaps one who was pulled out of a bank to serve as Group CFO, whose main task appears to be running a family-office-like structure involving logistics, payments, and collections on behalf of the patriarch, rather than focusing on the core business.

Now, whether Shade is running the group in a visionary or performance-driven manner remains to be seen, as analysts wonder how feasible that may be, judging by her hectic social calendar.

What the Eleganza Group appears to be lacking is next-level initiative at the level of the founder and management.

What happens after “Daddy’s vision”?

What we do not see is the deliberate vision pull of the Fajemirokuns, now in the third generation, leading one of the biggest insurance franchises in the country, or the deliberate infusion of structure by the Baloguns that has seen FCMB remain strong and credible.

Aliko Dangote, after equipping his daughters with superb education and subjecting them to rigorous grooming within the system, recently announced new positions for them.

Even then, he continues to guide them, surrounding them with structure and strong corporate governance that will ensure steady leadership and goal optimisation long after he is gone.

All of this appears missing in the Eleganza story.

Shade is not known to have undergone any serious institutional training or orientation in driving an operation of that magnitude and, to the best of my knowledge, may not fully grasp visioning, corporate governance, team building, collective responsibility, and delegation of authority, all the elements that institutionalise vision.

The enterprise may have been run largely by rule of thumb and the progenitor’s native intelligence.

The Indimi case, where the daughters recently won a landmark ruling forcing their father to cede over $40 million, is still fresh in our minds.

The FRA Williams saga is still brewing despite the fact that they are a family of lawyers.

All these may be child’s play compared to the Eleganza situation if care is not taken.

Succession planning is something every entrepreneur must take seriously while building platforms.

It is critical to the longevity of any enterprise.

It does not totally eschew biological succession but instead puts strong parameters in place to guide successor leadership while ensuring sustainability.

AIICO, Leadway, Dangote and a host of others are now public companies with Nigerians holding stakes in them — despite the families still retaining control.

There is no reason why the Eleganza conglomerate should not be a listed entity today, beyond emotional leadership that may not fully appreciate the benefits and would likely resist such a move.

Despite all this, compounding the issue by attempting to bring in younger generations who, to date, appear more predisposed to peacocking than level-headed entrepreneurial vision makes the observer raise his hands in resignation.

If I were to offer advice, I would suggest that Shade step aside, a HoldCo structure be created, the conglomerate be handed over to an independent board, and a professional management team be instituted.

They should grow the business along set parameters defined by the HoldCo, which would not have day-to-day operational obligations.

All biological members of the family would have a stake in the HoldCo such that, no matter the infighting, the business continues running smoothly and paying dividends.

This would ensure institutionalisation, greatly improve the chances of growth and expansion, and free up Shade and her hip-hop starlets to continue enjoying their lifestyle while the Eleganza Group undertakes the long and tedious task of rejuvenation.

Anything short of this may result in us singing a sad and painful dirge for one of Nigeria’s most beautiful business stories.

Sad.

Duke of Shomolu