‘Nigeria needs more mentors to shape upcoming startup founders’
Abiola Adediran is the founder and managing consultant of pan-African social impact organisation, Midridge International.
A member of the Forbes Coaches Council, she is recognised as one of Africa’s finest corporate finance and business strategy experts with over 15 years of work experience as a speaker, author, trainer and mentor.
A Fellow of the Institute of Chartered Accountants of Nigeria, she is a Certified Management Consultant and a PRINCE2-certified Project Manager from APMG International, UK.
She also holds an MBA from Edinburgh Business School, Heriot-Watt University, Scotland, majoring in Finance and Strategy. She tells TOBI AWODIPE how she is focused on helping entrepreneurs build businesses that can scale and outlive them through her organisation
Tell us a little about what you do.
I’m a top corporate finance and business strategy expert with over 15 years of experience in consulting and financial services, especially in investment management and more recently, family office management. I serve on the board of some growing startups, and I’m a mentor on several entrepreneurship platforms. Through my work as a coach and trainer, I help transform businesses by building suitable structures to make them sustainable legacies.
Forbes Business Council recently welcomed you into their council of experts, among other recent successes this year.
How did you get to where you are in your life and career today?
I will say it’s the desire to make an impact and make my life count for something. I’m self-motivated and disciplined. I take myself seriously and hold myself to high standards. How I see myself and the contribution I have made to the world defines my approach to life, work and faith. As a visionary leader and future-forward woman, I’m convinced about Africa’s future and the part I have to play in its transformation. That clarity of vision compels me to rise higher and not relent in my effort to become a better version of myself.
I started as a science student in secondary school and passed all my A-level exams with distinction in one sitting, a feat that no one in my family had achieved until then. I was determined to break the jinx, and I did. It was hard work under not too comfortable circumstances, but I persevered and was determined to achieve my desire. I got into the university to pursue a course in Project Management Technology, and while doing my bachelor’s degree, I also enrolled for ICAN and was doing it pari-passu. I became a Chartered Accountant as I graduated from the university, and by this time, I had done two other professional certifications in Project Management and Marketing.
From my first employment as an investment banker and my foray into consulting, I have always been motivated to stand out and distinguish myself by going the mile to do extraordinary work and achieve great results. That same drive is what I brought into entrepreneurship as I create solutions that help business founders to build lasting legacies and create wealth that can pass to the next generation.
On the flip side, what does failure mean to you? What is one major failure you have experienced, and what lessons did you learn from it?
In my opinion, the word “fail” is “first attempt in learning”. I have had my share of failures as I navigated my journey. I had to write two papers in ICAN twice, and it felt strange to fail because I hadn’t failed before. I questioned why I failed, but it didn’t stop me from moving forward. There were times that I set targets in my career that I didn’t meet. But, in all my experiences, it has developed my faith muscle, the belief in self that does not allow one to give up. You build strength when you fall down and pick yourself back up. Similarly, each time you fail and recover, you create the strength of character, commitment and work ethic. Failure spawns creativity, motivation and tenacity.
From your career in corporate finance, what would you recommend as the top three principles new businesses can imbibe for growth?
I worked for a significant part of my career as a strategic CFO, and in this capacity, I was not just a numbers person. I had to be a big-picture thinker and executor, and based on my experience, I’ll share my top three principles for business growth.
Timing is everything: The timing of your product or service must be right in the marketplace. If the market isn’t ready and you are way ahead of the market, you must have the drive and the willingness to sacrifice to make that product or service work. You will need to choose whether to wait for the market to catch up or to adjust your offering to something more palatable to the market’s current readiness.
While it’s true that we can’t predict the future, especially in this VUCA business environment where you sleep and wake up to the news that can render all your business assumptions almost useless, we need to be aware of happenings in the world and our industries. When studying trends, you can understand how market conditions and your customer’s preferences are also changing. There’s nothing worse than spending time, money and effort creating something that no one wants to buy or refusing to change and hoping that your business will still be relevant.
Business leaders should be flexible and adaptive: To continue growing, entrepreneurs, managers and business owners must become the leader the business needs for each growth stage. And since a company’s needs change at each stage, its leaders must keep evolving at the right pace. That requires introspection, self-awareness and a keen sense of strategy, both in the short and long term.
One of the challenges I have seen with many owner-managed businesses is that the founders are often very set in their ways and are often unwilling to change or give up control, which most times limits the growth of the business.
De-Stress for Success: Most small business owners consider managing the ongoing success of their business to be twice as stressful as maintaining a healthy relationship with a spouse or partner, nearly three times as stressful as raising children, and more than four times as stressful as managing their finances. Small business owners often forgo physical fitness and other personal priorities to meet business demands. The stressors can be relentless. But if you’re not happy, healthy and motivated, you can’t create a business model that provides a positive market experience. You also set the tone for everyone who works with you. Nobody wants to do business with a grumpy, bitter and exhausted owner. Therefore, investing time and effort to adequately take care of your physical and mental well-being will increase your chances for long-term success. Mental health is not just about going to the gym to let off steam. It’s about achieving a state of mental calmness to see you through the relentless challenges.
What is the number one financial mistake individuals and organisations make?
Organisations and individuals make a major financial mistake of using short-term funds to finance long-term projects. Financing permanent investments in working capital with short-term loans are hazardous. Nine out of 10 times, it’s a disaster waiting to happen and often leads to a “maturity rat race” except the situation is salvaged.
The matching principle, a guide known to finance experts, argues that long-term needs ought to be funded with long-term capital and temporary requirements met by short-term loans. When a business violates the matching principle, you expose it to risks. Interest rates can easily be higher when it’s time for a loan renewal. Because most working capital usually involves a floating interest rate, you may find that your business cannot afford the risk. Ask yourself, for instance, what impact an increase in interest rate has on your company. Action is necessary if you do not like what you see when you run the numbers.
In today’s ever-changing world, how can one leverage the power of business to create a lasting legacy?
Entrepreneurs go into business for many reasons, to pursue a dream, find alternatives to an unfulfilling career or make more money. When you think about your career as leaving a legacy and not merely as a source of income, it takes on a far deeper meaning. You want a lasting impact when you are pouring your time, energy and passion into a business. You begin thinking, “What does legacy mean? How can I build one?” Your legacy is an inheritance, your gift of service to others. Learning how to leave a legacy is also a gift you give yourself since it paves the way for finding genuine fulfilment in your life. Leaving a legacy is about building a business that lives on after you are gone. It’s not about having a job to show up to every day; it’s about creating something that can exist without you, and that is why you need to put the right structure in place. When you understand how to leave a lasting legacy for investors, you are also able to build a business that attracts future investment.
With inflation and a predicted global recession, how can people protect themselves and their businesses from financial loss?
The best advice I can give is that business owners should stay calm and do their best. Rapid-fire news reports about inflation, high-interest rates or talk of a potential world war are unnerving. But don’t trade on the news. Building financial security over time requires a calm, steady hand. Don’t let your feelings about the economy or the markets sabotage your long-term growth. Stay invested; stay disciplined. History shows that what people or even experts think about the market is not always right. However, you can’t afford to make decisions that are not well thought out and well informed. Remember that making perfect choices is impossible since no one has perfect information. So, collect your facts, make the best decision based on those facts and seek expert advice.
From your experiences in consulting at Midridge International, what key markers have you observed as traits that limit businesses from accelerating?
One of the many things that stop businesses from growing and scaling is a lack of structure. Companies that will scale successfully must have institutionalised systems to run it and to make decisions around people, process, technology and sales. If a business is built around a person, it creates key-man risks that can jeopardise the long-term growth of the business, even if that person is the founder.
Also, when a business begins to grow, it faces different challenges depending on the stage of business growth and the financial management realities can also be different at different stages. It is, therefore, necessary for small businesses to understand these stages of growth in business to be able to position themselves for success.
A common sentiment is that there are no legacy companies in Nigeria. In your view, why is it so? And what makes businesses that scale and grow to become centuries old last as long as they do?
Legacy is a powerful word and aspiration. When entrepreneurs get started, they either want to build their company to have a successful exit and sell out or they imagine the generations that will come after them and contribute to the legacy of their business. This can be created for a family business precisely or just a long-term vision for the company that spans multiple generations and decades, whether pushed forth by employees or one’s own family. We don’t have many legacy businesses in Nigeria and Africa because of our subsistence approach to entrepreneurship, where the owners are merely concerned about their survival. A survival mindset keeps businesses small, where the owner does not see it beyond just providing a means of livelihood for himself and his family. As a result, there is no intentionality in planning the exit or clarifying the exit options that allow the principal to set up the right structures to hold the business as an asset and transfer it to the next generation.
Another major issue is the lack of preparation and/or unwillingness of the next generation to take over the mandate of running the family business where that is the chosen exit option. Many times, the business founders run the business with the assumption that their children will take over. In many cases, the children usually sell off the assets and the business can either disintegrate or collapse from lack of proper management. Businesses that last are usually very structured and place key emphasis on succession planning.
What role does business mentorship play in business success, especially for small business owners?
A business mentor can provide valuable insights that will directly impact you and your business. They can act as navigators for you during your business journey, providing an unbiased view of your business and a new perspective to solve problems. We need to have more mentors shaping the upcoming startup founders and helping them understand the challenging business terrain so they can make better decisions. That’s why I offer myself as a mentor on the entrepreneurship organisations and platforms that I support.
What is the best financial advice you have ever received?
Work to learn, do not work for money. Money is a tool. Use it or be used by it.
What is the number one savings and investment advisory you can give someone reading this?
Pay yourself first. Save part of your income as soon as you get it, rather than setting aside whatever is left over.
If you are asked to give your younger self a piece of financial advice, what would you say?
Diversify your income sources to grow your wealth. I have an excellent savings habit but I didn’t learn about multiple sources of income early enough, so I had little to save and invest when I started my investing journey in 2005. Now I know better and I’m teaching my children and other young adults to do better.