Al Manar Group unlocks the secrets of a successful family business


Listen to the article

 

Of all models of business organizations, family businesses remain an emblematic example, insofar that their sustainability is unguaranteed. Business history is full of abundant epic stories of the rise and fall of many successful businesses that had been founded by family members. From internal conflicts, clash of egos, hidden agendas to centralized and/or hierarchal management model, lack of negotiation, and absence of barriers between family dynamics and business needs, family businesses can crash down from where they had started. Intriguingly, studies reported that only 3 percent of family businesses can last beyond the third generation. “93 percent of family businesses disappear after the third generation, because third generation and moving forward are cousins, having different backgrounds and education,” said Ahmed Nawara, CEO of Al Manar Group, a specialized company providing import and export, storage, manufacturing, and distribution services to the automotives industry at a webinar hosted by AUC School of Business on “the secret to being a successful multigenerational family business”.

This webinar is part of a full-year initiative focusing on family business culminating with the campaign #IMovedMyBusinessForward, in which family business leaders are encouraged to share their best practices on intergenerational leadership and succession and other family business challenges.

The mantra: transparency, open-mindedness, and clear policies

For Mohamed El Nasharty, export manager at Al Manar and Nawara’s nephew, sliding into the family business was smooth thanks to Nawara’s vision. “Working with my uncle has never been a challenge for me, since Ahmed is not only a manager but also a mentor, with open-mindedness and listening skills that make him supportive of fresh ideas that require embracing change,” he commented. El Nasharty also stressed how his educational background in France in business and luxury brand management has helped him in attracting new stakeholders notably from the Maghreb area. In addition, his travel experience for about 15 years stretched his flexibility to deal with different age groups from different nationalities and backgrounds which allowed him to easily integrate within Al Manar’s team members, where many staff members have been working since he was a kid, as he noted.
Reflecting on El Nasharty’s journey with Al Manar, Nawara assured that the presence of family members from the third generation, as El Nasharty himself, consolidates the company’s credibility as a sustainable family business. “Upon witnessing multigenerational family clan in the business, stakeholders would trust us more that we could sustain in the market and as such, they can foster long-term partnerships with us,” he pointed out.

“Upon witnessing multigenerational family clan in the business, stakeholders would trust us more that we could sustain in the market and as such, they can foster long-term partnerships with us,” says Mohamed El Nasharty, export manager at Al Manar Group.

Nawara’s induction into the company was quite different from El Nasharty’s. “When I joined back in 1997, Al Manar has been already there for 22 years,” he added. Owing his success to his dad’s trust, Nawara affirmed that the company has enlarged its activities ever since he stepped into, having currently about 200 members working in different branches within the automotive sector.

Un/healthy power dynamics in family businesses

As most business research suggest that family businesses could be prone to accelerating erosion within a certain time frame, Dr. Randa El Bedawy, associate professor of management at AUC School of Business and the webinar’s moderator, inquired on whether family businesses can be immune from unhealthy dynamics or not, when it comes to conflicting interests and undefined barriers between professional and personal rapports among family members. Nawara attributed Al-Manar’s success in overcoming such issues to clearly defined policies that rule the company in total transparency. “We designed a workshop where all family members were invited in order to set a formal hiring policy for those who would like to join the company from our family,” he contended. Believing in the potential of the third generation, Nawara highlighted that it was his son and his nephew who were in charge of setting and modifying recruitment-related policies, and they all complied with them, especially that “managing expectations is so important in families,” he implied.

Likewise, El Nasharty assured that such clear policies alleviate any delicacies when it comes to the entry of a new family member into the group. “Thanks to Ahmed’s vision, working at Al Manar has not become a walk in the park for any family member to join without having the right profile that could match available vacancies and/or TORs,” he confirmed. When it comes to setting barriers between family and business, El Nasharty shared that all the family has agreed that there would be weekly, non-professional gatherings where they would spend quality time as family, not as business partners.

Challenges and opportunities for family businesses

Reflecting on the common patterns for family businesses, El Nasharty believed that most first-generation founders are inclined to top-down management that comes at the expense of the longevity of the business. “In case of the CEO’s absence (e.g. death), the business would start shattering due to the lack of succession plans and clear policies regulating those matters,” he posited. From his side, Nawara agreed that having an unclear vision and ambiguous policies would give rise to endless conflicts upon considering succession.

Through his doctoral studies on the sustainability of family businesses, Nawara speculated on how family businesses with no policies can be consumed by egos. “As a CEO, I can wonder whether I should give the leadership to my son, the eldest member from the third generation, or the most competent yet the youngest of the family clan. If there are clear policies from the beginning, there would be no room for such envies,” he said.

On another note, Nawara gave credit to the independence of family businesses especially that, unlike multinational corporations, they can easily adapt to urgencies with “their maneuvering skills,” he asserted. Furthermore, such independence is capacious for more innovation and risk-taking.

Culture eats strategy for breakfast

Al Manar has become a regional company in 2017, developing a new managerial paradigm. The “corporate governance project,” as Nawara coined it, launched big investments which require specialized yet costly consultancies, internal auditing, with an active board of directors, half of whom are independently hired from outside. Above all, since “culture eats strategy for breakfast,” Nawara crafted horizontal management, such that the CEO would not be the sole person to have the upper hand when it comes to making decisions. To achieve full transparency, special managers were hired to monitor that the governance pillars are in place and updated.

When asked about his vision if he takes over the leadership of Al Manar, El Nasharty affirmed that he will pursue Nawara’s vision, seeking to expand the business, while keeping an eye on the latest updates in the industry. He also praised the three-year business plan of Al Manar Group which is constantly updated and through which the growth pillars are reevaluated, giving space for fostering new projects, partners, and customers.

“As a CEO, I can wonder whether I should give the leadership to my son, the eldest member from the third generation, or the most competent yet the youngest of the family clan. If there are clear policies from the beginning, there would be no room for such envies,” says Ahmed Nawara, CEO of Al Manar Group.

On this, Nawara stressed that since the governance project was implemented, decision-making was made better, thanks to a one-year project which was concluded with a consulting firm that is specialized in family businesses. Through it, an authority matrix was developed on three levels: the managers’ level, the general assembly level, and the top-management level.Nawara defined governance as the golden key to the success of family businesses, having nothing to do with whether the team is big or not. “As a small, multigenerational family/business partners of 22 individuals, we managed to accommodate for family governance matters, leaving financial and management commitments to specialized consultants,” he concluded.

    Knowledge Partners

    CONTACT US

    School of Business
    American University in Cairo
    AUC Avenue – P.O. Box 74
    New Cairo 11835
    Egypt
    Email: BusinessForward@aucegypt.edu

    Copyrights © 2017 The American University in Cairo School of Business • All Rights Reserved

    Copyrights © 2017 The American University in Cairo School of Business • All Rights Reserved. Designed by Indigo.

    Copyrights © 2022 The American University in Cairo School of Business • All Rights Reserved.  Designed by Indigo.