(This story is an adaptation from a conversation Petua Kateeba and Joseline Kateeba had with Akaego Okoye, for her African Business Stories Podcast)
At least 70% of all small businesses that start in Uganda are said to fail in the next 3 to 5 years. There is therefore no prize for guessing that there are not many businesses or playbooks to read from when it comes to managing intergenerational succession in family-owned businesses.
As such for Petua Kateeba, the matriarchal head of Crest Foam Limited, a family-owned manufacturer of mattresses in Uganda, there was no rule book to read from on how to hand over power to her daughter- although she badly wanted to.
For Joseline Kateeba, the heiress apparent, it was no different. She knew she wanted to contribute to building the next generation Crest Foam, but not even her University of Cambridge MPhil in Management Studies; her Harvard Business School MBA or her management consulting experience for some of the world’s best consulting behemoths, had prepared her enough on how to smoothly earn power from her mother and run a smooth succession.
It had to take sheer guts, courage and faith; learning and unlearning, as well as the fall-back knowledge that her mother trusted her, to rise to the occasion, even if at the start it meant having to stage a bloodless boardroom coup against her very own mother.
That was all back in 2014-2015. The company has since gone through what eventually has become a smooth power transfer, and now the mother-and-daughter team are running a tight ship and shaping Crest Foam into one of Uganda’s largest ‘sleep’ companies. Much as they are in the business of selling comfort- the story hasn’t been as comfortable.
But in the words, of Joseline, they are driven by “a lot of hope that tomorrow will look a lot brighter than today.”
But let’s first go back in time.
The story of Crest Foam Limited started with entrepreneur Joseph Kateeba and his lovely young wife, Petua Kateeba. In 1984, the couple decided to start a mattress manufacturing factory- initially in Kasese, Western Uganda but failed to get suitable land. They ended up buying land in what is today, Ntinda Industrial Area, in Kampala.
This explains why the company was first registered as Kasese Foam Limited, but later it would change to Crest Foam Limited. After constructing the first factory buildings, the business run out of money but eventually, with funding from the African East Development Bank (EADB), the Kateebas were able to purchase production machines and raw materials.
On 09th October 1987, Crest Foam had its first successful production run and had by 1990, grown to become Uganda’s second-largest manufacturer of mattresses.
Unfortunately, the late Joseph Kateeba passed away on 29th May 1992 leaving behind a young company and a young family. Petua was only 41 years and Joseline was only 15 years.
In the footsteps of her husband
In the sixties and 70s, much fewer girls got the chance to go to school. Petua was among those few girls to go to school. Priority was always given to the boys. Most girls were prepared to become housewives. The lucky few went on to study teaching and nursing.
Petua’s auntie was a nurse, and because she was always smart, Petua was motivated to join nursing school and train as a midwife.
After finishing her nursing course, in 1970, she worked for one year. She then met, Joseph, the love of her life and they were married in 1972.
Fast forward. The young couple then launched out to work together in business which resulted in the birth of Crest Foam in 1984. When Crest Foam started production, in 1987, Joseph took the driving seat and Petua, set up the first mattress distribution outlet in Kampala.
Upon Mr Kateeba’s passing in 1992, Petua had to decide between closing the company, selling it or continuing to run it. She decided to step in.
In June 1992, Petua became the Managing Director of Crest Foam Uganda Limited.
“I was afraid but my conscience told me God is there,” she recalls, in an interview with Akaego Okoye, for her African Business Stories Podcast.
The company was still in its infancy. It was only starting to pick up. At the time, the company had a loan from the East African Development Bank (EADB) as well as was indebted to foreign suppliers of raw materials. Yet, Petua needed to engage both the bank and the suppliers, and win their confidence, if she had to carry on. Looks like her God was on her side, the bank agreed to restructure the loan and the suppliers agreed to carry on. This gave a young Petua the courage to move on.
For close to two decades, Mrs Kateeba single-handedly saw to the growth—more than tenfold, of Crest Foam. The company was by 2014, one of the biggest three local foam manufacturers!
Meanwhile, the young Joseline bloomed into an intelligent young and high-flying woman. She went on to the University of Warwick, one of the leading UK Universities, where she studied mathematics and statistics (1995-1999). She then joined the University of Cambridge where she undertook a Master of Philosophy (MPhil), Business, Management, Marketing, and Related Support Services. Between 2005 and 2007, she completed an MBA from the prestigious Harvard Business School.
She then plunged into a flourishing career that saw her take up various jobs with Bain and Company a global management consulting behemoth (between 2000 and 2009) as well as with Cummins Inc, an American multinational that designs, manufactures, and distributes engines, filtration, and power generation products. These great jobs saw her rub shoulders with the who is who across the continent’s corporate world.
Much as life was good, according to Joseline, she didn’t feel complete.
“Sitting in those board rooms, I realised I could continue being an employee for the rest of my life and pursue a real good career at Cummins,” she narrated to Akaego, “But I also felt that I would never feel complete if I did not give back to the family and actually bring everything that I had learnt to make a real fundamental difference at home. That was my driving force.”
But even as she felt the need to get back home to join her mother, she continued to resist her mother’s efforts to get her back home to be involved with the family business.
According to Petua, business was growing and getting more challenging. And PEtua was not getting any younger. She was in her 60s now.
“I wanted her to come and relieve me because the work was too much that it had come to my maximum. I wanted real help from her,” Petua recalls.
Joseline’s epiphany, coming back home and staging a bloodless boardroom coup
Then one day, in the course of her daily duties, Joseline gets an epiphany, but from a very unlikely source.
Between 2011 and 2014, she had taken on very senior roles at Cummins Inc, first as a Director of Strategy and Business Development Leader for Africa and later as Director for Special Projects for Africa. She was based in South Africa but her job took her all over the continent.
Around 2013, Cummins was working out a joint venture with Car & General (Kenya) Plc and naturally, Joseline was on the team assigned to do due diligence. It is during an interaction with Vijay Gidoomal, the MD of Car & General, that Joseline got her awakening.
She says she was struck by Vijay’s story of how he had inherited the business from his father and was taking it to greater heights.
“When I listened to his (Vijay) story; the way he described the path that his family business has gone through…from just a trading company to becoming a service-oriented business; still representing global brands, but actually doing a lot more in terms of scale and had been able to list on the Nairobi Stock…I sat back and thought to myself, ….I need to do something great like this. Honestly…. this was my AHA moment,” Joseline narrates.
“Vijay, actually, and he doesn’t even know this but to me, he represented myself. I felt that I wanted to be Vijay when I am his age and talk about all these things that I have been able to accomplish. I really got motivated to be bold and to start believing that I could actually dream a lot bigger than I had allowed myself to dream,” Joseline adds.
It is then that she got on the phone with her mother to say, your girl is coming home. Towards the end of 2014, she packed her bags back home to take over from her mother.
But she wasn’t prepared for the polite resistance she initially faced.
See, much as her mother had wanted her to take over, it seems she was not fully prepared to hand over the reins and this threw Joseline who was from the corporate world where most things were in black and white, a little bit off-balance.
For starters, the outgoing Managing Director- her mother, did not vacate the office of the Managing Director—both the responsibility and the physical office. Joseline was handed the General Manager role and placed in another office— quite a distance away from the seat of decision-making.
“The truth is my mum had been courting me and asking me to come home. She really wanted me to come and join the family business. But I think in her mind, what she envisioned is, I would come home, I would shadow her for a while and she would obviously continue running things and I would be there supporting her, and maybe, one day, at some point, she would just hand it over to me,” Joseline narrates.
“When I came home, my mum put me in the General Manager’s office and she retained the Managing Director’s office. This became confusing to people because she had already been running the business for 20+ years and everyone was aware that Mrs Kateeba was the decision-maker of the factory, so when she remained in her office, it was very difficult for me to get people’s attention. They struggled with whom do we listen to,” she adds.
It became difficult for Joseline and her teams to differentiate between the roles of the Managing Director and the General Manager. Joseline got a little frustrated.
“I realised that it was going to be very difficult for me to effect the changes that I felt were crucial,” she says.
That is when she decided it was coup time.
“I like to tell people that I staged a coup,” she quips.
“I actually gave her notice. I literally went to her assistant and told her that by February 1st 2015, Mrs Kateeba’s personal items had to be moved to the General Manager’s Office, and my items had to be moved to my office. I had already printed the Managing Director’s business cards. I took the position,” she recalls.
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“I felt that she wanted me to take charge but at the same time, she wanted to hold onto the position and it was becoming a little bit confusing. I told her that we needed to make sure that it was clear (who was in charge) and one of the things that needed to happen was, I needed to sit in that chair- the Managing Director’s Chair,” Joseline recalls.
And she says this was not because the office and the Managing Director’s office meant a lot, but it was rather symbolic that, now she was in the Managing Director chair, she was the “the new decision maker, going forward.”
Lucky enough for her, Mrs Kateeba did not resist. She settled for the role of Executive Director.
It was a smooth coup.
In February 2015, she fully assumed the office and role of Managing Director, at Crest Foam Limited.
With her in the driving seat, it then became easy to win over or rather command the followership of the rest of the teams, and this included two of her uncles who had worked at the company for more than 20 years and were finding it difficult to start taking orders from a little girl, they had seen evolve from diapers up.
The baptism of fire that battle-hardened Joseline
One of the things that Joseline started with is corporate governance. The rigorous changes that needed to be done, right from the board through to the bottom levels of the company would cause a lot of change-related friction. People- including Mrs Kateeba, needed to be convinced that the change that was being ushered in did not merely change for its own sake, but rather valuable change.
And one of the areas where Joseline had to start was Corporate governance- for in her words there was non and the company was, by and large, being run informally with very little documentation.
She was often accused of impatient and being too fast. To be able to push a lot of the changes through, she identified an ally in the Board Chairman.
“I relied on the board chairman to help me effect a lot of these changes… He became my greatest confidant, my greatest coach. He was a seasoned banker and he had led one of the biggest development banks in the region for a couple of years, so he understood the need to formalise and why it was important to have good corporate governance,” Joseline recounts.
“I started that journey with him because my mum trusted and respected him. I knew that he would be the greatest influencer with my mum and so I spent time with him and we would come together to the board.”
But all in all, things were made better, because Joseline knew, at the back of it all, her mother trusted her.
“One of the things that I was blessed with, I think my mum truly trusted me. She trusted the decisions that I was making. Some of them were very difficult for her. She struggled with the speed at which I was making changes. It somewhat made her uncomfortable. But as I mentioned, when I realised that she was struggling, with certain concepts, I would then go through the board chairman who was the one that she had relied on.
But as Joseline was beginning to warm up to and move things, tragedy struck. On March 09th 2015, Crest Foam was gutted by a fire, destroying 5,000 sqm out of the total 6,000 sqm of the factory space.
Joseline who had travelled with the mother to South Africa for treatment at the time had to jump on the first available plane to Uganda and take charge, with Mrs Kateeba in tow.
It is on landing at Entebbe International Airport that they were met with even more grim news. The fire had claimed 6 lives of their employees.
“My mum didn’t cry up to that point. Physical assets can be replaced. We were insured, we knew we had paid our insurance covers, and we weren’t worried about that. But when we heard that we had lost lives, that is not something that you cannot put back. You cannot do anything about it for those families. For us actually, that was tremendously difficult,” Joseline narrates.
“In business you want people to go back home better than they came. You don’t want to take back their remains instead of their loved ones,” she adds.
But all in all, Joseline and the mother understood they needed to be strong, at least for the rest of the stakeholders who looked up to them for a sense of hope.
“We both immediately realised that we needed to become strong…We understood very quickly that we needed to get into the gear of being strong. We had 130 employees in total and they were all panicking. People were worried…we quickly saw the panic. My uncles were crying. Everyone was devastated. I just realised that I needed to become strong,” Joseline says.
“I made sure never to cry in public. That was important. I needed to show the group that we could pull through. I remained focused on what we could do, as opposed to what we had lost. I quickly tried to put together some sort of action plan and assign people to different tasks. But of course, the unfortunate thing in a disaster is that whatever plans you come up with, the next morning a new plan has to be developed because other people are intervening. There is so much that was in flux.”
Joseline says the company got a lot of support and goodwill from many stakeholders. Their insurance brokers and insurer, UAP Old Mutual worked in over-drive to ensure the business was back on track.
“People started to rally and that gave us extra energy and allowed us to keep pushing. But the truth is that if we did not have the insurance policy that we had, it could have been a lot harder…. our insurer, UAP Old Mutual, which is part of UAP Old Mutual Group, quickly gave us a big chunk of money that enabled us to kickstart the process of rebuilding.”
And when the business was rebuilt and Crest Foam mattresses were back on the shelves, within a record six weeks, Joseline was overwhelmed by the love from the market.
“We didn’t know how the market would take us back. The market received us with open arms,” she remembers with glee.
Picking up the pieces and looking to the future with optimism
With getting back to the shelves, the pressure eased, but the rebuilding continues.
In Joseline’s words, the fire changed her forever.
“When I look back I feel like, I became a different person. I just understood that everyone was relying on me and my mum and we needed to be strong. There was no time to waste.”
“We have built back what we lost. We were able to put back and improve the facility so that we would not have the same kind of accident again. We have also been able to add to our machinery. We have now started thinking about extending our production line and that is something that we are preparing for.
The business had also expanded its distribution footprint, creating more owned stores, where they previously relied on third-party distributors only.
“We are in a strong position. We are still rebuilding, ourselves. There is still work and a lot of areas for improvement. We have a lot of hope that tomorrow will look a lot brighter than today,” says an optimistic Joseline.
In the next ten years, Crest Foam intends to go larger by setting up a new manufacturing plant at Namanve Industrial park. In addition, they are looking at widening their product range and geographical reach. They also want to diversify and look at real estate.
On the lessons learnt, Joseline says, “Sometimes it is all about how you position yourself to do great things. You have to get people to trust your business. It should be the real picture.”
Josephine encourages businesses to formalise as it helps the business to grow.
For the owner/founder generation, who havent yet started working on the succession question, Joseline recommends that they expose the next generation to the business from an early age, even as interns in secondary schoo as well as communicate openly to their children about the business.
In an interview carried in the PwC East Africa Family Business Survey Report 2021, Joseline says that accountability and a strong ethic which are both important, should be passed on right from home.
“It can be hard to hear, because parents want to give their children the best of everything, but how you manage money and encourage creativity and hard work will influence the professionals that your children
become.”
But all in all, she doesn’t regret her decision to come home. In her own words, “If you support a family business, you are directly supporting local families and local economic growth.”
She is optimistic that business is getting better. “For some opportunities, it is important to build the business and know what works for their growth. There is a need for strategy. There is a lot of competition for funds. Uganda is still considered high risk which makes access to capital very expensive. For a business to have access (to funds), the business should be organised and ready.”
Crest foam has been named one of the 50 top brands in Uganda by the Private Sector Foundation of Uganda. Mrs Kateeba won the entrepreneur of the year award from UWEAL before.
Joseline is also a non-executive board member of the Uganda Manufacturers Association, NCBA Bank of Uganda, Biyinzika Poultry International Limited and a member of the advisory board of Total Uganda. When she is not at Crest Foam, she will be somewhere running.
Petua, after leading the company for 22 years, from June 1992 to 2015, growing the business by more than tenfold, now has time to do other non-Crest Foam activities. During her tenure as Managing Director, Crest Foam was ranked among the top 50 brands by Private Sector Foundation Uganda. She also won the Entrepreneur of the Year Award from the Uganda Women Entrepreneur’s Association Ltd (UWEAL).
