KEYS TO THRIVING IN THE NIGERIAN BUSINESS

ENVIRONMENTFate Alumni Event

November 25, 2015‘Dipo Davies

Sounds like a self help book!

Thrive? In these times?

■ Thrive - flourish, prosper, bloom, advance, succeed, expand

■ Nigeria’s current economic situation: Muhammadu Buhari has made a slow start to his presidency, with his cabinet only sworn in during mid-November. Ministers will take time to settle in and so the clearer policy lines investors want will then take into 2016 to establish. However, early signs are of a worrying resurgence of economic nationalism. Given policy uncertainties and a lower oil price environment, the Economist Intelligence Unit expects growth to remain well below recent averages until 2018. The Economist Intelligence Unit.

■ "Recession IS strictly a matter of perception."Denise Corcoran

A well worn topic

First Key – a huge dose of realityHave things changed? Can things change?■ Is the total market for the your product or service growing or shrinking?■ Who is your customer?

■ How does the customer make decisions about buying your product or service?

■ To what degree is the product or service a compelling purchase for the customer?■ How will the product or service be priced?

■ How will the venture reach all the identified customer segments?

■ How much does it cost (in time and resources) to acquire a customer?■ How much does it cost to produce and deliver the product or service?

■ How much does it cost to support a customer?

■ How easy is it to retain a customer?Adapted from How to write a great business plan by WILLIAM A. SAHLMAN

What say you?■ Do you have a business that will ‘thrive’ in these times?■ What are those things you need to cut off or improve upon?■ Are there investments you have to make to ensure the business thrives?■ Face the facts: A MANAGEMENT retreat of the Dangote Group holds at the Sheraton

Hotel Ikeja from today to Sunday. It is aimed at consolidating the transformation of the group to manufacturing.

The retreat will focus on and fashion out strategies on repositioning the Dangote Group for the challenges of the 21st century. A result - oriented organisational restructuring of the group has be presented by Arthur Anderson and approved by the board. The retreat will feature management experts like Mr. Felix Ohiwerei, Kunle Elebute and Drs. Pat Utomi and Yakubu Adamu. They will lead seminar discussions on such topics as manufacturing in Nigeria; problems and prospects; employee commitment and teamwork; change management; and management information system.

The retreat will be declared open by the Group President Alhaji Aliko Dangote. The Guardian April 5, 2001

Key 2 – You and your people■ Informality is fine as long as entrepreneurs aren’t interested in building a large,

sustainable business. Once that becomes their goal, however, they must start developing formal systems and processes.

■ As a young venture grows, its founders will probably need to delegate many of the tasks that they used to perform. To get employees to perform those steps competently and diligently, the founders may need to establish mechanisms to monitor employees and standard operating procedures and policies.

■ In a small scale start-up, everyone does and a little bit of everything, but as a business grows and tries to achieve economies of scale and scope, employees must be given clearly defined roles and grouped into appropriate organisational units.

Prof Amar Bhide The Questions every entrepreneur must answer

What say you?§ Transforming a small enterprise into a self sustaining enterprise requires the

entrepreneur (founder) to undertake new roles. If you cannot develop new skills and competencies needed to manage and grow the enterprise then should you be CEO? Aliko Dangote is not the CEO of Dangote Group.

■ Do you have formal recruitment and appraisal systems in place? Pay and promotions must be directly linked to performance, and rigorous appraisal systems consistently make people aware of where they stand. Do you differentiate between employees rewarding great performance and discouraging bad practices?

If there is one of my values that pushes buttons, it is differentiation. Some people love the idea; they swear by it, run their companies with it,and will tell you it is at the very root of their success. Other people hate it. They call it mean, harsh, impractical, demotivating, political,unfair—or all of the above. Obviously, I am a huge fan of differentiation. I have seen it transform companies from mediocre to outstanding, and it is as morally sound as a management system can be. It works. Companies win when their managers make a clear and meaningful distinction between top- and bottom-performing businesses and people, when they cultivate the strong and cull the weak. Companies suffer when every business and person is treated equally and bets are sprinkled all around like rain on the ocean.Jack Welch.

Key 3 – Superior execution.■ “An organisation’s ability to execute its strategy depends on its “hard” infrastructure – its

organisational structure and systems – and on its “soft’ infrastructure – its culture and norms” –Prof Amar Bhide

■ Your Organisation’s structure processes and design must align with your objectives with the aim of improving its efficiency and effectiveness

■ Operational excellence. Processes for end-end product supply and basic service that are optimized and streamlined to minimize costs and hassle. Operations that are standardized, simplified and tightly controlled and centrally planned, leaving few decisions to discretion of rank and file employees..

■ Product leadership. Focus on core processes of invention, product development and market exploitation. A loosely knit, ad hoc business structure ever changing to adjust to entrepreneurial initiatives and redirections that characterize working in unexplored territory. Management Systems that reward new product success and that don’t punish the experimentation needed to get there.

■ Customer intimacy. An obsession with core processes of solution development, results management and relationship management. Management systems that are geared toward creating results for carefully selected and nurtured clients. A business structure that delegates decision making to employees close to the customer.

Discipline of Market Leaders by Michael Tracy & Fred Wiersema

Key 4 - Culture■ Corporate culture refers to the beliefs and behaviors that determine how a company's

employees and management interact and handle outside business transactions. www.investopedia.com.

■ In other words, “that is how we do it here” . What they do when you are not around.■ A company’s culture is usually driven by the boss. If he is secretive (politics will soon

thrive), a bully (Managers will take advantage of their subordinates)■ It is also driven by what is rewarded.■ Why is culture so important? It fills the gaps in the policies and also decides how policies

when available are implemented.■ We’re glad to have you with our Company. Our number-one goal is to provide outstanding

customer service. Set both your personal and professional goals high. We have great confidence in your ability to achieve them. Nordstrom Rules: Rule #1: Use your good judgment in all situations. There will be no additional rules.

We don’t think ourselves into a new way of acting, we act ourselves into a new way of thinking Larry Bossidy and Ram Charan: Execution: The Discipline of Getting Things Done

Key 5 – An eye on your business, the local and international scene■ Political: local, national and international political developments – how will they affect

the organisation and in what way/s? “The road to Abuja is through Kogi State….”

■ Economic: what are the main economic issues – both nationally and internationally –that might affect the organisation?

■ Social: what are the developing social trends that may impact on how the organisation operates and what will they mean for future planning?

■ Technological: changing technology can impact on competitive advantage very quickly!

There’s a new sheriff in town, some people want to leave the union, lies gain currency quickly………

SWOT, PEST, Five Forces and Michael E. Porter

What say you? Are you paranoid? • Under Andy Grove's leadership, Intel has become the world's largest chipmaker and one

of the most admired companies in the world. In "Only the Paranoid Survive", Grove reveals his strategy of focusing on a new way of measuring the nightmare moment every leader dreads-when massive change occurs and a company must, virtually overnight, adapt or fall by the wayside.

• The two most important points of strategic management highlighted in this book is about recognizing strategic inflection points in a business when the business and its environment goes through a dramatic change in structure referred to as a "10X" change in the book. A dramatic change in business environment requires that leaders with responsibility of implementing strategic management are able to adapt to the situation and who can come out of the inertia of success caused by the initial shock to derive competitive advantage from the changing trends. Grove categorically states that strategic management has two parts; strategic plans which deal with the unforeseen future and strategic actions which take place in the present.

By August 2014 every businessman should have known that foreign exchange would be a challenge in 2015.

Key 6 - Don’t stop investing■ Samsung had a problem. Its culture was static and inward-looking. Then, in the early

1990s, Lee Kun-Hee, chairman of the South Korean electronics giant, made a decision that would reshape his organization and create a blueprint for globalization. He sent a handful of the brightest young employees to far-away corners of the globe to immerse themselves in the culture, learn the language and build networks so that someday Samsung would know how to supply those markets.

■ What an amazing investment in the future. Today Samsung, based in tiny South Korea, has become one of the most well-known and far-reaching brands on the planet, with nearly $148 billion in annual revenue. The brand evaluation firm Brand Finance recently ranked it sixth in the world.

■ As Jim Collins notes in the foreword of The Greatest Business Decisions of All Time, the world is uncertain. “Decisions are about the future and your place in that future when that future is uncertain,” he writes. The one key decision you can make to prepare your business for that uncertainty, according to Collins, is to have the right people with you.

■ Samsung recognized the importance of having the right people on its team and took the idea a step further. Top management saw that the company also had to develop its talent. That entailed making a commitment to educate its people to thrive in a global economy in a way that transcended textbook learning.

Verne Harnish & the Editors of Fortune The Greatest Business Decisions of All Time

Key 7 - Measure performance rigorouslyI think the soundest management advice I've heard is the old saw; "What gets measured gets done.“Tom Peters Author of In Search of Excellence and A Passionfor Excellence,

KPIs - Key Performance Indicators are quantifiable measurements, agreed to beforehand, that reflect the critical success factors of an organization. They will differ depending on the organization. A business may have as one of its Key Performance Indicators the percentage of its income that comes from return customers.

For CASTLES it is circulation figures and distribution presence

Last Word

Entrepreneurs, with their powerful bias for action, often avoid thinking about the big issues of goals, strategies, and capabilities. They must sooner than later, consciously structure such enquiry into their companies and their lives. Lasting success requires entrepreneurs to keep asking tough questions about where they want to go and whether the track they are on will take them there. Amar BhideAmar Bhidé is the Thomas Schmidheiny Professor of International Business at Tufts University