Big Fish In a Small Pond

Homeware store Abdul Rahims has benefited from being a big fish in a small pond. In the last decade they also deepened the pond by growing as a wholesaler. In its fifth generation of family leadership, the firm now needs to make another leap

Abdul Rahims, one of the oldest family run businesses today is one that started as a small trading outlet in household products inside the Galle Fort nearly one and a half centuries ago. The legacy of the Founder and his values has always carried each generation through periods of crisis and changing business dynamics but now the winds of change are blowing through the family controlled and managed Abdul Rahims. The need to explore succession as a continuous rather than a reactive process has emerged, as the company tries to keep the fifth generation committed to the business.

Chairman Rusly Hussain is laying the groundwork for succession by building a pipeline of talent for roles below the Chief Executive.

The firm has a business heritage and a brand recognized by many generations that goes back to 1872. M C Abdul Rahim & Bros has been around 143 years making it one of the oldest family owned and run businesses in Sri Lanka.

For Rusly, the family business was his entire life. Having grown up within the Galle Fort during a more carefree period, he carries his heritage with pride. He has a deep understanding of the country and local industries

Siblings Naqeeb and Farhard Rahim carry the weight of heritage passed down from founder, I L M Mohamed Cassim and wryly admit that sometimes it is a challenge to be relevant both to the heritage and the present. The generational transition of traditional entrepreneur values, skills and management style set in place the brothers need to cross gradually and patiently into a changing landscape of globalization, smart technology and digitalization.

The choice to join the family business was made at a much later stage in both Naqeeb and Farhard’s careers. Unlike their father, the present Chairman and a fourth generation member who joined the business at age 17 soon after school and has held a dominant role in the business for 46 years, both Naqeeb and Farhard pursued their own dreams and ambitions initially. There was never any expectation from Rusly for his sons to join the business.

Savvy, accomplished and extremely intelligent, the brothers represent the Gen Next young urban tablet carrying professionals who have created their own success stories through start-ups of their own.

After completing his secondary education Naqeeb wanted to pursue his dream of becoming an aeronautical engineer but instead got a degree in Information Technology in USA, in 2000. He lived and worked in the US for seven years; three years in Florida as a commodity broker and a foreign exchange trader. He returned to Sri Lanka in 2003 and joined DFCC Stock Brokers as an Investment Analyst. Within a year he wasn’t challenged with work as a stock broker in Colombo and joined the family business.

Aug-7-610x282The reason for coming back was personal says Naqeeb. “We lost our mother unexpectedly and Dad was alone. At that time it was,” he recalls “a tough decision. I am happy I came back when I did. It would have been much harder to make that move later on.” Naqeeb joined Abdul Rahims in 2004 and is a Director on the Board. He is also the Head of Human Resources at the firm.

It was close family confidante and cousin Bary Jaleel – who has an operational leadership role in the family business and along with Rusly sets the strategy – who suggested that Naqeeb start and head a new product line in cleaning solutions for the corporate sector.

Naqeeb was placed in charge of the distributorship for Ecolab Inc. a USA based global company involved in the development, manufacture and marketing of cleaning chemicals and related services. An associate company Cleansol was formed. The success of Cleansol saw Naqeeb becoming a Certified ISO 22000 Food Safety Auditor, and his expertise is sought as an instructor trainer for the laundry, housekeeping and kitchen operations of the hospitality industry and hospitals.

The soft-spoken Farhard Hussain has added many feathers to his cap. An accomplished IT professional, running companies and managing people he says is in his blood. “I have been an investor in business enterprises since my youth having been involved in a number of start-ups from IT to retail since the age of 22.”

Like Naqeeb he graduated from Clarion University in the US and worked there for over Eight years. For the past 12 years he has been Head of Marketing at Abdul Rahims having joined, like Naqeeb, in 2004.

Coming back home made him realize “that there is no place like home.” The quality of life is much better here. The decision to join the family business was based on a sense of pride, for what Farhard calls, a highly respected brand that evokes a sense of trust and confidence.

Farhard however dabbles in more than just the family business.

Farhard started Cenmetrix in 2005 to meet the rising demand for biometric technology, developing windows based applications ranging from time and attendance, payroll and web based leave management to canteen management systems. Cenmetrix now has over 400 clients in Sri Lanka and have done over 3,500 hardware and software installations island wide. In early 2014 he floated a subsidiary company Cemex Software to develop Human Resources Management software.

Handing over the business to his sons will never be a “sticky baton syndrome” for him, he assures. “I have never groomed them for succession, only influenced them with the right values. Business should not be based on emotions.”

For Rusly the family business was his entire life. Having grown up within the Galle Fort during a more carefree period he carries his heritage with pride. He has a deep understanding of the country and local industries. He says value is derived from years of personal relationships with stakeholders crucial to his business.

Handing over the business to his sons will never be a “sticky baton syndrome” for him he assures. “I have never groomed them for succession, only influenced them with the right values. Business should not be based on emotions. Their role in the family business is more about helping to create a professionally managed company and enhancing the brand value of Abdul Rahims as it was becoming thin at the top.”

Between the three of them they hold one sixth of company shares as significant minority shareholders of the business. Only few family-owned companies understand the need to separate ownership from management especially when they have achieved some scale.

Rusly states ‘it’s better to be a big fish in a small pond than to be a small fish in a big pond’. Both Naqeeb and Farhard believe that a change towares more professionalism and a corporate culture is vital to remain competitive. Naqeeb stressed that even a family business has to adapt itself to the future and maintains that not all owners are professional managers. “The way my grandfather ran the business may not be applicable to how it should be run now.” The company, they feel, has reached a plateau and expansion is tied to getting more capital investments and bringing in outside expertise.

Abdul Rahims’ plans include to eventually list on the Colombo Stock Exchange.

Strategic partnerships are being formed and the current product line reflects the glory of the 1920s and 1930s when the company used to import wellknown brands then like Wedgewood, Prestige and Johnson Brothers. The stores used to stock Petromax Lanterns from Germany and Aladdin Lamps from England.

Today, Abdul Rahims stores stock a diverse complement of international houseware, kitchen and dining products, ranging from cutlery, crockery, glassware, and pans to everyday household stuff and gift items. There are plans to create a uniform look to all the stores soon. The focus has shifted from standalone retail stores to wholesale and cross trading with established white goods retail chains like Singer Mega becoming partners.

The company is also a supplier to a diverse range of clientele consisting of hotels, restaurants, clubs, beverage establishments, airlines, cruise operations offshore supply bases, educational and medical institutions, food courts, cafeterias and general consumers and is concentrating on the high-growth wholesale side of the business more than retail.

Both Naqeeb and Farhard are married and Farhard became a father recently. Family ties bind the brothers closely to their father so that they all live in close proximity to each other in the same Colombo 3 apartment complex.