There’s no single simple recipe for success to unlock the ‘famed’ commercial opportunity this amazing, vast African continent offers. And, for every success story, there are a host of failures. However, to be successful, risk is a necessity.
Anybody can be successful in the short-term in Africa, but sustainable success is what shareholders look for. The biggest challenge is in translating the brilliant Harvard Business Strategy – devised in the comforts of an air-conditioned Gauteng boardroom – into a sustainable business that empowers people to act responsibly and deliver value to their business communities.
Vision and values
At face value, the opportunity presented by a growing emerging middle class is hugely lucrative. Marketers however, are disillusioned by the effort required to unlock this growth. The numbers don’t lie. Business plans are cautiously conceptualised and the overly-energetic commercial and marketing directors are set loose to redefine the trajectory of their respective organisational profit lines.
The allure of high double-digit growth is all too attractive, and shareholders are energised and generous in their willingness to beat the competition. Expectations are high, but now what?
In my experience and from my observations of powerful media owners and global multinationals, the road to success in Africa starts and ends with an extremely well-articulated Africa vision, mission and numeric goal, underpinned by the living out of the company’s values.
This may sound generic and perhaps you’ve heard it before however, I have worked in organisations that simply pay lip service to the above. The reality is that if people are not extremely clear as to what the vision, mission and numeric goals are, they’ll be rudderless on a continent where things change constantly, just like the exchange rate of any developing country.
The importance of values that underpin daily leadership behaviours is the compass required to navigate the complexities of cross border, cross cultural corporate and governmental minefields. A company that does not have pioneering as part of or implied in their values, will struggle in Africa.
Making the right choice
Start up, acquisition or affiliation? This must be the first question you ask yourself. There are many factors to consider. Affiliation is no longer a viable long term solution – driven by the investment model. Both acquisition and affiliation have their pros and cons and often the acquisition model seems the most attractive. Regardless of what route makes the most financial sense, what’s key is finding the best partner for life.
It’s imperative to take a deeper look into network or business performance. At Dentsu Aegis Network (DAN) and other global agency networks, we believe that ownership in the markets is critical and will deliver better long term returns vs the affiliation approach. We also maintain that ownership is beneficial to both our network as well as the countries and communities in which we operate. Ownership allows us to invest in our people in the markets.
With capability being one of the biggest barriers to unlocking growth across the region, investment into our people has enabled us to upskill and inspire our teams to deliver breakthrough performance – leveraging common terminology and language across a vast region to ensure we deliver a consistent product. All the big players (global networks and multi-nationals) have these systems and tools, however, not all have ownership in the markets and so cannot roll out these technologies and platforms.
Any multinational entering the market will automatically look to their global agency network for support. This enables them to leverage strategy, pricing and learnings seamlessly across a massive region like Africa.
The ownership model allows clients access to backend IT infrastructure like intranets and financial platforms. These are perceived as real, tangible business differentiators and allow for transparency from a financial controls perspective.
A critical success factor is to deliver financial transparency, compliance and reporting, all of which warm the heart of any shareholder, knowing that their investment is protected in a region notorious for dubious financial process.
JCDecaux have just entered the market and have an amazing vision to slowly modernise the OOH space across Africa. They intend to be the catalyst to transform this space using global learnings that can be shared at the click of a button and supplied in Tanzania, supported by their local intranet – the power of global tech platforms helps massively when one has ownership.
Six years to overnight success
When DAN was looking to enter Africa’s largest economy in 2009, it took five years to close out a solution that would set the network up to deliver value for their clients.
After four years of courting through affiliation, Dawn Rowlands, CEO DAN SSA, concluded that the current affiliate DAN was courting did not share the same vision, so they severed ties. However, there was a particularly bright, energetic and focused MD within the affiliate with whom Dawn had built a strong working relationship.
So, DAN decided to enter the market as a start-up in 2013 and incredibly, in 2014 was awarded The Best New Media Agency of the Year award in the Marketing World Awards with Emeka Okeke, CEO at Media Fuse, Dentsu Aegis Network, Nigeria, receiving the prestigious Media Entrepreneur of the Year title. In 2015, the company was awarded Media Agency of the Year.
The African culture, no matter East, West, North or South, is one of Ubuntu – “I am what I am because of who we all are”.
Success without strong, authentic relationships is short lived. It takes time to foster, nurture, invest in and create solid relationships that unlock growth. It includes honest conversation and sometimes, disagreement. All successful businesses need this before taking a calculated leap of faith into a new market in Africa.
Africa is a hugely relational continent and understanding the drivers behind relationships is imperative. Almost all companies and networks will invest in annual conferences where undoubtedly, the content comes second and relationships come first. The success of these events is judged on how much time was given to focus on relationship building and networking.
In 2012, I was part of a Diageo regional team working across 22 markets in Africa and we found it extremely difficult to influence the region effectively. As there are huge differences in the way we engage at a cultural level, we sought the help of a cultural diversity specialist to unpack why our engagement behaviours were not effective in shifting and influencing performance.
Understanding the differences between how West Africans, East Africans (as well as Nigerians, Ghanaians and Cameroonians) like to engage, was a massive enabler for Diageo to extend its influence and deepen relationships. This meant more trust and alignment – a critical ingredient for any organisation to scale across a region.
Time and insight
There is real merit in understanding the challenges that Africa poses before jumping into the rollout of global and regional strategies.
I had the privilege of working with an excellent MD who had his marketing team spend six months discovering how the economics of the major slums around Nairobi worked. It took great humility to spend so long in this challenging environment, engaging all the relevant people, in the labyrinth of the slums.
However it paid off, resulting in an increase in OOH media investment. The lesson is to take the time to ask the right questions and understand the drivers of business before jumping to developed market conclusions.
Many companies get it so wrong. No business in Africa can survive by remote leadership. Success needs strong leadership and high levels of capability in the markets at all times.
Successful networks and companies spend time on the ground in the market, engaging all stakeholders from government, industry bodies, communities, consumers and investors.
The fight for compliance
Compliance is top of the agenda for any listed company looking to enter and do sustainable business in Africa. Luke Bailes, CEO of the Singita Group, arguably the most successful Premier African Safari Destination Group, spoke to me about a specific piece of equipment integral to the completion of his new lodge, that sat in Dar es Salaam’s port for 18 months.
Held up by customs officials for “irregularity in the paperwork”, the authorities offered him a solution that would enable him to clear the equipment immediately if Luke made a donation of sorts.
Eighteen months later the equipment was released through the official channels. The Singita Group walked away with their integrity and commitment to compliance intact.
The delay cost the group a few $100 million, but the brand was not marginalised in any way. In 2015, the Serengeti Hotel was awarded No. 1 in the World in the Conde Naste Traveler Reader’s Choice Awards. It was worth it.
The letter of the law
An experienced legal and finance support team is arguably the most important ingredient to any successful expansion strategy across Africa.
However, experience is critical as they navigate the treacherous detail hidden in the complexity of multi-market legal and finance rules – enough to turn the youngest of chartered accounts grey overnight.
Having the benefit of a global team that has experience in similar developing market contexts across geographies like South East Asia and South America, is especially useful. This will assist in getting advice on how to navigate and interpret the letter of the law and financial due diligence, critical to any sustainable business vision.
Again, people who can foster meaningful and valuable relationships with key industry stakeholders and government, are the key factors to any organisation’s success.
Finally, vision, time, values, insight, humility and capability are the critical components to the success of any organisation across Africa.
Dominic Malan is group managing director of Carat SA and SSA.
This story was first published in the July 2016 issue of The Media magazine.
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