It is unusual hearing business partners calling each other my “holy brother”. In a country with proverbs like “Ethiopians know to dine together but not work together,” It is also rare to see board decisions where votes are made through trust instead of majority rule. The half decade-old friends and business partners for 25 years celebrated their anniversary and handed over the company to the next generation as all of them now are more than 75 years old. Getamesay Degefu, Kumela Gragne, and Abate Baye sat down with Capital to share their experience.
Capital: How many of you were together in the business college and who joined when you began working?
Kumela: Three of us and Legesse Yirga met in the business college and the technical person Kinfemichael B. Selase joined us later.Kumela: Three of us and Legesse Yirga met in the business college and the technical person Kinfemichael B. Selase joined us later.
Capital: Do you think OMEDAD would have been actualized if the regime change didn’t happen?
Kumela: If the Derg regime didn’t fall we wouldn’t have been able to start this business. We can’t create an Island if the economy doesn’t allow us. However, we had a dream and we were always discussing it. In addition to the liberalization of the economy, some of our members lost their jobs and that meant we had to consider how to improve our economic situation. It was not easy to decide to enter into private business. We saw, during our time when successful businesses were ruined because of confiscation. It meant we had to make extra effort because we were undertaking a fresh start in the late days of our age.
Capital: How did your education contribute to your success?
Abate: The Education system teaches you how to serve somebody’s dream rather than finding your own. We were also victims of the curriculum. Of course, we had ambitions to wear suits and to be managers. They were no more than dreams we had at the moment, which is the way we were educated. But it was our career which convinced us we could do more. When we started the business we were at the age where people often consider retirement, all of us were over fifty years old. Education should be changed to help develop bright entrepreneurs.
Capital: Do you think it’s too late to reduce your role importing products in manufacturing?
Kumela: We started the business with only one million birr and there was only one commercial bank back then. We established Akal, a sister company, after five years and we also started possessing various prototypes on how to run our business. Even when we started building our hotel we doubted the timing of our decision, wondering if we were thinking of diversification too early. So we are growing at a reasonable rate I must say.
Getamesay: Also, we have a trading system where people become millionaires overnight. We started the company after we were adults and we took our life principles to our firm. We faced multiple challenges because we want to trade cleanly. I was arrested by the ERCA just because our manager asked why the Authority was asking for different types of customs duties for the same material we and other people imported. We also didn’t want to pass bad experiences to the next generation and business which is based on illicit practices. We are happy with the path we chose.
Abate: There is a saying in our country grab as much as you can eat. We worked respecting the laws and policies of our government. Also, as the nation was in a transition from a very different economic system the amount of loans that you could get was not large. After we became involved in the establishment of private commercial banks our growth became more reliable and healthy.
Getamesay: We were involved in the establishment of the first private commercial bank, Awash. Our contribution was not significant at the beginning, but we grew together. Also, we were the founding shareholders of the Hibret Bank. From the insurance industry, we were involved in the founding of one insurance company. After this banks entered the industry problems related to finance were solved.
Capital: From your 25 years of operation which was the most challenging?
Kumela: The shortage of accessing foreign exchange has been our all-time challenge as the trade imbalance is very huge. I can say we faced about four or five storms lately. But 2018 was different. We were about to break down or to face grave damage, but after the new Prime Minister came the change saved us. We didn’t cut any employees and the problem did not scar us, thank God. Now when we finish our factory in the Dukem area we might be able to export our products which will ease the forex shortage for us. As a principle, I don’t believe that every importer has to export and earn foreign exchange as the two are very different in nature. But as the crunch is getting hard that might be a way out.
Capital: As you were importing appliances for the past 25 years how do you see the logistic sector’s ability to carry the nation’s demand?
Getamesay: The liberalization of the logistics sector is a critical decision. Monopoly is the enemy of efficient service. That is a wise decision. With regards to local logistics, we created a strong distribution line before we had enough capital. But the challenge occurs until the products enter our stores. Globally efficiency is improved through competition, so the monopoly was quite a problem.
Kumela: Lack of facilitation in service I know in Ethiopia is getting ill and ill from time to time. Poor efficiency in customs, logistics or land management is costing the nation. We can take the issue of the hotel we are constructing on Africa Avenue. There is very little land which is adjacent to the land we are building the hotel. The land can’t be used for any other service as it is very small. We asked the City Administration seven years ago for permission to use it.
Capital: What kind of relationship do you have with your employees?
Getamesay: when we started the company, with all the limited resources, we drafted a payment structure using the scale of international organizations. Also, we tried to implement a fair approach to the company. We also pay special attention to capacity building. We have employees who have gone from being desk assistants to managers. We annually announce posts for our employees to apply and compete for promotions. We are very proud of providing a good working environment. We are not known for having a quarrel with our employees. Our experience in leading companies with thousands of employees helped us to lead this one efficiently and to create a peaceful environment. The company will be profitable if it has employees who work singing not crying.
Capital: Why did you transfer the company to the second generation? How was the transfer made, did you transfer the leadership to people you knew or your own staff?
Getamesay: We transferred the company’s top leadership three years ago to the next generation as every founding member is beyond the age of 75. We didn’t transfer the company to our children, because they had jobs as long as the other employees. Our loyal and competent employees are the second generation, some of those people include our relatives.
Abate: Anyone who has the capacity and trust and loyalty to our company is the next generation. We didn’t bring them as an appointment but they worked for the company for long and they proved value to us like the other regular staff did. Our principle on that matter is very clear, which encourages the employees in their effort to bare fruit just because of their commitment and loyalty in addition to good performance.
Kumela: We hired a company to conduct a three year research study to conduct the transition properly. This helped us develop a structure and criteria. Finally, we evaluated the employees, including our children, and those who fit were approved.
Capital: What will you do after you retire?
Abate: We are still working until the next generation is able to take over the Board. We spend nights not only in the daytime even after the second generation takes over the major stake. We are sure the transfer of the Board also will be realized soon. We have witnessed that young leadership has achieved a lot more than we did. As there are many new lines of work are and diversification we want to help them in bringing in the new era. So we want to swipe the path.
Capital: OMEDAD is known for quality appliances. Was achieving a reputable name in such regard an easy one?
Abate: Unfair competition and corruption in public procurement are what paralyzes the nation’s foreign exchange. Almost half of what is imported will be a piece of trash before finishing its life span. We many times lose bids because of unfair practices where cheap items are offered at a very low price. However, customers who choose quality and who witness the difference will always come back to us. Our stand with regards to quality will remain unchanged when we start manufacturing too. We care about our reputation but also we don’t want to waste the valuable foreign currency. We stick to quality!