During our last two days in Nairobi, our group was grateful for the opportunity to have candid, in-depth conversations with C-level executives at a number of companies, including Dr. James Mwangi (Group MD and Group CEO at Equity Group Holdings Ltd/Equity Bank), Manu Chandaria (Chairman and CEO of the Comcraft Group, which owns Mabati Rolling Mills), and Reg Orgon (CTO of BRCK).
Kicking off our Tuesday with Dr. Mwangi of Equity Bank, he expressed excitement for his “belief in the convergence of academia and industry” – which was suiting for the 40%+ of our group heading into consulting after CBS! Equity Bank’s mission is to offer inclusive, customer-focused financial socially and economically empower their clients and stakeholders. He told the story of the last 15 years, and how Equity Bank progressed from its #66 of 66 position in market share (back in 1994) to #1/#2 by 2014. What were some of his key learnings and takeaways?
- Self-disruption: Look at what the customer wants (e.g. freedom of choice and increased control), then ask yourself, “How can we shape ourselves based on what the customer wants?” Then, re-engineer the business model – in their case, Equity bank recognized that disruption would not necessarily come from other banks, but rather from telecoms and fintech companies looking to better reach consumers.
- Differentiation through human capital strategies: “We can train for skills, but we cannot train for attitude.” Equity Bank has clearly defined its core value system, and even from its hiring “fit test” phase, it will screen if employees believe in the mission and exhibit the attitudes necessary to deliver on those values. While career progression and advance of titles is critical at some companies, Equity Bank also understood how to align incentives for its employees to maintain high levels of retention – in fact, some employees are “demoted” but are so willing to do so and serve the company in the long-run because Equity Bank offered them equity shares that appreciated in value and created wealth and financial security, which is considered highly important for many at the company.
Similarly, Dr. Chandaria at Mabati Rolling Mills, which was the first company in Africa to produce coated steel using a patented Aluminum-Zinc alloy, mentioned that the secret to success is:
hard work + vision + ingenuity + integrity
And, without integrity, this recipe for building inner capacity, which starts with yourself, falls apart (“Anything multiplied by zero will equal zero.”). He also spoke about the challenges facing Africa, including hunger, shifting demographics, government, and complex tradeoffs between job creating and technological innovations (including automation which replaces human tasks). Other countries have significant agricultural resources, but not Kenya. To overcome these, MRM has undertaken multiple initiatives and investments, including its Mabati Technical Training Institute and Mabati Medical Centres, to acquire and apply skills that benefit both local communities and the country at-large. At the end, our group toured a production facility that manipulated coils of steel into preset shapes used in roof construction at difference thicknesses (and price points).
At the IBM Research Lab in Kenya, one of 12 labs employing 3,000 scientists around the globe, the tables were turned toward us when expert researchers across the finance, public government, epidemiology, healthcare, and AI/blockchain industries asked us, “So what business models/technologies do you hypothesize should be put in place to solve critical problems such as global trade administrative burdens, cancer outbreaks, or assessing credit risk on individuals who only have feature phones?” One example at the intersection of technology and research they shared was utilizing natural language processing (NLP) to consolidate public health reports on disease cases, which is still a complex process as some are written in only Swahili, only English, or a hybrid of the two. We felt that they got just as much value from the meeting than we did! IBM’s CEO Gini Rometty is dedicated to Africa and visits at least once a year. One of the lab panelist’s key insights:
“If you want to have impact, you need to be on the ground to understand the challenges and develop solutions. The cut and paste model of taking Western solutions into developing areas will not work.”
Lastly, we explored further about why internet is so bad in Africa from BRCK’s CTO, Reg Orgon. The fiber optic network is insufficient, and therefore, the physical infrastructure across the continent is unreliable. There is not expansive coverage of 4G. So, BRCK is trying to leapfrog these challenges with a full stack of engineering for products, such as the SupaBRCK, a self-powered router that provides open internet service and broadcasts a WiFi signal to mobile devices. And, they are trying to roll out free wifi, including at banks. Where kids often do not have reliable electricity, and are subject to other weather-related conditions, BRCK developed kits so that “students will not suffer with devices that don’t work.” The key challenge in reaching the next 800M-1B people is figuring out who will pay for connectivity. Therefore, BRCK is flipping the model through ad and “for good” social content that directs how to go online, especially through mobile devices. But, it also recognizes the risk of the obsolescence effect and difficulties in sourcing “high-end” engineering talent. Through partnerships with companies such as Facebook, however, the potential to empower lives with lower cost infrastructure services is gaining momentum.
In between, we made sure to check out some local spots, such as Alchemist Bar, and Brew Bistro and Lounge, to enjoy local craft beer, dance to Afrobeats/hip-hop/top 40, and celebrate one of our colleague’s birthdays!
Next up: Rwanda – stay tuned, friends!
-Ray Phua, ‘18