Beat­ing the odds in a tough en­vi­ron­ment

Broth­ers An­dreas and Alexan­der Pi­lak­outas re­luc­tantly in­her­ited an old-school fam­ily busi­ness rooted in eco­nom­i­cally tur­bu­lent Harare, Zim­babwe. They had to hit the ground run­ning in a rugged in­dus­try run by an old boys’ club to save their fam­ily’s liveli

Finweek English Edition - - ON THE MONEY - By Ru Har­ris

nick’sMo­tors, a cross-bor­der road trans­porta­tion com­pany, car­ries haz­ardous bulk liq­uids such as diesel, petrol, paraf­fin, min­ing sol­vent and JetA1 fuel for top clients in min­ing and other in­dus­tries through­out South­ern Africa. The com­pany has weath­ered many storms in its time, but the worst was when owner Nicholas (Nick) Pi­lak­outas died of lym­phoma six years ago with­out a suc­ces­sion plan.

It was up to his two young sons, An­dreas and Alexan­der (aged 26 and 21 re­spec­tively back then) to take the reins from their fa­ther.

They in­her­ited an in­ef­fi­cient com­pany with out­dated sys­tems and a man­age­ment struc­ture in des­per­ate need of re­form. Add to their woes an un­sta­ble mar­ket, high leas­ing li­a­bil­ity, cash-flow con­straints and hav­ing to con­duct busi­ness via their head­quar­ters in Harare, Zim­babwe, in the eye of a liq­uid­ity cri­sis.

But that wasn’t all. “We clearly don’t fit the as­sumed pro­file of trans­porters: older, rugged men who use old-school busi­ness meth­ods. As a re­sult the staff showed no faith in our abil­i­ties,” says Alex, now 27, who had to give up his stud­ies in BCom Eco­nom­ics to help res­cue the fam­ily busi­ness.

In ad­di­tion, sup­pli­ers, ser­vice providers (banks specif­i­cally) and clients were all scep­ti­cal of An­dreas and Alex’s abil­ity to re­build a sus­tain­able busi­ness struc­ture and pro­vide the strate­gic di­rec­tion needed to re­vamp Nick’s Mo­tors and pro­vide a re­li­able trans­porta­tion ser­vice. The sober­ing truth was that they re­ally had very lim­ited ex­pe­ri­ence shad­ow­ing their fa­ther in the busi­ness prior to his pass­ing. This was not enough if they were to bring the busi­ness back from the brink of death.

“A suc­ces­sion plan is of­ten so eas­ily over­looked,” says An­dreas, who holds a Bach­e­lor of Busi­ness de­gree, ma­jor­ing in Lo­gis­tics and Sup­ply Chain Man­age­ment. “So of­ten you hear, ‘Oh, my sons will take over and run it when I’m gone.’ But it’s not that easy! A busi­ness should be able to con­tinue to ex­ist with­out the founder, but it takes years of plan­ning, com­mu­ni­cat­ing and men­tor­ing.

“We were left with the enor­mous task of try­ing to over­see a fam­ily busi­ness in a coun­try that we no longer lived in, try­ing to un­ravel a com­pli­cated struc­ture whilst at the same time deal­ing with the re­al­ity of hav­ing to give up our own po­ten­tial life plans,” An­dreas con­tin­ues. He stud­ied in Aus­tralia, and was about to start a promis­ing ca­reer there when his fa­ther asked him to re­turn to Africa to as­sist him. He re­turned, but his fa­ther died be­fore there was time for him to get to know the busi­ness prop­erly. When they took over the busi­ness the broth­ers de­cided to fo­cus on its core com­pe­tency, which is tanker work. This move was met with a lot of re­sis­tance from em­ploy­ees and man­age­ment at the time, who were also reel­ing from the death of the man who had been at the helm of the com­pany for a quar­ter of a cen­tury.

“Peo­ple are al­ways the hard­est part to man­age, no one likes change and we had a lot of changes. We did our best to en­cour­age the work­force to em­brace the change and keep mov­ing for­ward,” says Alex.

The broth­ers adopted a strat­egy that fo­cused more on or­ganic growth in mar­kets and routes where they can re­ally make a dif­fer­ence. This meant load­ing from South Africa and Mozam­bique into Zim­babwe, Zam­bia, Botswana and the Demo­cratic Re­pub­lic of Congo. They con­tin­ued to build on the com­pany’s rep­u­ta­tion of de­liv­er­ing fuel swiftly, re­li­ably and at a fair price. The changes they im­ple­mented proved suc­cess­ful. They be­came the first trans­porter in South­ern Africa to be awarded the high­est pos­si­ble score by Puma En­ergy South Africa at the com­ple­tion of their ac­cred­i­ta­tion as­sess­ment.

“Over time we have put in place bet­ter sys­tems, es­tab­lished a stronger pres­ence on the route, em­ployed im­proved tech­nol­ogy and launched bet­ter pro­cesses,” Alex says as he ex­plains how they’ve gone about turn­ing the

re­la­tion­ships with other sup­pli­ers built on trust and un­der­stand­ing are the only rea­son we still get food for the can­teen and sta­tion­ary

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