From Entrepreneurs to Stewards: Evolving Roles in Family Wealth

The Hunter’s Transition: When Founders Must Become Farmers

In many African traditions, great hunters eventually become village elders—shifting from chasing game to teaching survival skills and settling disputes. This mirrors the journey family business founders must make: from risk-taking entrepreneurs to wise stewards of multi-generational wealth.

Yet too many African family enterprises fail at this transition. Why? Because building wealth requires different skills than preserving it. The founder’s boldness that created prosperity can become the undisciplined risk-taking that destroys it.

The 5 Stages of Family Wealth Evolution

1. The Founder (0-25 years)

• Role: Visionary risk-taker

• African Example: The self-made trader who builds a retail empire

• Danger: "I built this alone" mentality

2. The Family Business (25-50 years)

• Role: Professionalizing operations

• Example: Hiring non-family CEOs while keeping strategy in-house

• Pitfall: Sibling rivalries over control

3. The Investment Portfolio (50-75 years)

• Role: Diversifying assets

• Case Study: Nigerian family moving from oil into tech and real estate

• Risk: Losing focus on core competencies

4. The Family Office (75-100 years)

• Role: Institutionalized wealth management

• Challenge: Balancing financial returns with family values

5. The Legacy (100+ years)

• Role: Stewardship as sacred duty

• African Wisdom: The Akan concept of "Abusua tumi" (family power)

Why Most Families Get Stuck Between Stages 2-3

The Statistics:

• 70% of family wealth disappears by the 2nd generation

• 90% by the 3rd generation

Root Causes:

1. Founder Syndrome – Inability to let go of control

2. Missing Governance – No systems for decision-making beyond the patriarch

3. Values Erosion – Next gens see wealth as entitlement rather than responsibility

The Stewardship Toolkit: 4 African-Inspired Practices

1. The "Stool and Skin" Leadership Model

Inspired by: Ashanti royal succession rituals

How It Works:

• Outgoing leader symbolically passes authority (the stool)

• But keeps advisory role (the leopard skin - respected but not ruling)

• Modern Application: Founder becomes Chair Emeritus with defined advisory boundaries

2. The Family Wealth Covenant

More Than a Legal Document: A sacred oath between generations

Key Elements:

• "We will grow this legacy" (not just spend it)

• "We will educate all heirs" (financial literacy requirements)

• "We will honor our roots" (percentage reinvested in communities of origin)

Example: A Kenyan tea family requires heirs to work 5 years outside the family business before joining

3. The "Three Fireplaces" Governance System

Inspired by: Traditional homestead design

1. Council of Elders (Strategy)

2. Working Generation (Operations)

3. Next Gen (Innovation)

Rule: Each "fireplace" has defined powers - none can override all others

4. Stewardship Training Camps

Beyond Boardrooms: Immersive experiences

Components:

• Financial literacy through real family asset management

• Conflict resolution simulations

• Visits to historical family business sites

Ghanaian Example: One family's "Gold to Tech" program teaches heirs both traditional gold trading and blockchain applications

The Ultimate Test of Stewardship

Ask your family:

1. Are we building wealth consumers or wealth guardians?

2. Do our governance structures constrain reckless behavior while encouraging innovation?

3. Would our ancestors proudly recognize what we're doing with their legacy?

From Inheritance to Heritage

The founder plants the tree. The steward ensures it bears fruit for centuries. As the Ethiopian proverb goes: "When spiders unite, they can tie down a lion."

Next Steps: Raising the Baobab provides complete frameworks for transitioning from entrepreneurship to stewardship. Get your copy here.

Tsitsi Mutendi is a trusted strategic governance risk advisor specializing in family businesses and family offices. Through her platform, Nhaka Legacy (http://www.nhakalegacy.com), she empowers families to implement effective governance practices. Tsitsi is also involved with African Family Firms (http://www.africanfamilyfirms.org) and shares insights on sustainability and transgenerational wealth in her podcast, Enterprising Families (https://anchor.fm/enterprisingfamilies). Her work focuses on fostering resilient family legacies and promoting sustainable practices within family enterprises.