What you need to know:
- Last week he retired from the giant corporation that now serves over 35.6 million customers, with a staff force of over 6,500 employees.
While Safaricom has been his most recent public platform for the last 13 years, he has an equally enviable past which, he says, gives him satisfaction.
Minutes after presiding over his last AGM as chairman of Safaricom on August 30, Mr Nicholas Nganga, spoke to Smart Business about his time at the mega company, and his 58 years in public service.
In Mr Nicholas Nganga’s words, it is not possible to pinpoint a specific moment of success for a company that has steadily grown in size, stature and profits since he first joined the board 16 years ago.
To put this in perspective, at the time of his appointment as chairman in January 2007, Safaricom had slightly over six million customers and 1,000 employees.
Last week he retired from the giant corporation that now serves over 35.6 million customers, with a staff force of over 6,500 employees.
During his tenure, shareholder value too has grown 607 per cent and the company’s market capitalisation at Sh1.075 trillion is worth 50 percent of all listed corporates on the Nairobi Securities Exchange.
The company has earned global recognition as a technology innovator and for its commitment to principles for responsible business.
Yet Mr Nganga, the soft-spoken man who is reverently referred to in Safaricom House corridors as “chairman”, does not reel out any of these figures and facts, preferring to speak instead about the impact the company has had on lives and livelihoods. “Safaricom is in the lives of people in a very deep way,” he says as he reflects on some of the company’s initiatives and projects.
And, while Safaricom has been his most recent public platform for the last 13 years, he has an equally enviable past which, he says, gives him satisfaction.
“I have worked in one capacity or other, in the public service for the last 58 years and in those years I have done various things,” he says, referring to a stellar career in civil service that saw him rise from a District Officer to a Permanent Secretary and decades of serving on various boards. As Permanent Secretary, he had two stints at Treasury, interrupted by a transfer to the Ministry of Foreign Affairs, under circumstances he declines to talk about.
Serving as PS for Finance put him at the heart of Kenya’s economic policy (he signed a generation of currency notes in his capacity as a member of the Central Bank of Kenya Board), and one other thing that makes Mr Nganga a happy man as he hands over the reins to Mr Michael Joseph is seeing Safaricom respond directly to some of the problems the country had grappled with during his tenure at the Finance ministry.
M-Pesa, one of Safaricom’s runaway success stories, is a case in point: “When I was in the Ministry of Finance, I dealt with banks a lot. There were requirements for banks to invest certain amounts of their deposits into the rural areas, particularly in agriculture, and this was not happening. M-Pesa enabled all those people who did not know how to deal with banks and money transfers. We now simply call this inclusivity. But it’s not just inclusivity; It’s enabling people to do things they would never have thought they could do. Not just transferring money of a platform, but being able to link up with banks and to borrow and repay monies purely on a technological platform,” he says. As he goes into retirement, he is confident that M-Pesa will continue to drive Safaricom’s growth through various products allied to it, as well as future innovations.
AWARD WINNING INNOVATION
He has reason to be particularly proud of the award-winning innovation. M-Pesa was launched in March 2007, just three months after Mr Nganga’s appointment as chair of Safaricom’s board and three years into his tenure as a director.
He was, therefore, a part of the behind-the-scenes engine that saw the innovation develop from an idea to a global brand.
“There’s substantive contribution of the board in the products that you see because the ideas, once generated by management, are brought to the board, where they are thrashed out. The board’s role is to make management’s ideas into projects and products by taking into account parameters such as return on investment, value, acceptability and the contribution the product would make to the welfare of the beneficiary,” he says.
There are many more moments, products and projects he was involved in, which he considers highlights of his long stint at the corporate.
His first annual general meeting in 2007, when the company had just listed on the Nairobi Stock Exchange is certainly memorable. It was a long and difficult meeting as he faced 3,000 new shareholders, who were keen to know what he was all about and wanted an assurance that he was the right man to look after their investment. They were sizing him up, he says.
“The meeting is something my colleagues still talk about. It was even mentioned at today’s handover (to Mr Joseph),” he says.
Thanks to his patience, he was able to steer the three-hour meeting to an amicable conclusion by listening to and allowing the shareholders to fully express themselves.
Other memorable moments are the move to Safaricom House from the company’s old premises, the opening of refurbished facilities at Mathari Hospital and the opening of the M-Pesa Foundation Academy in Thika.
What stood out in the Mathari Hospital project was that Safaricom was able to redo the common use facilities at an unbelievably modest cost because the firm used its own contractors. For the M-Pesa Foundation Academy, it is the investment in training future leaders.
“It is a fantastic institution of its own kind. There’s no other like it,” he says of the school.
“The lowest moment, of course, was the passing on of Bob Collymore while he was still in office. Although we knew that he wasn’t well, we did not expect him to pass on that suddenly. That was very tough, not only for the family, not only for me, but for the whole company,” he says.
The morning, a year and a month ago, it fell on Mr Nganga to rally the board and staff and chart a quick way forward.
“To give you the picture of what kind of board we had, I was able to call a meeting of the board that morning, and of the management staff and chart a way forward within the day. That is how we got Michael Joseph to step in and start holding the ship together, while we encouraged the staff to take it in their stride, and to look forward rather than dwell on the misfortune. And it worked very well because of the close co-operation between the board and management. I was actually very impressed by how we were all able to pull ourselves together and get the company going in spite of such a major tragedy,” says.
Mr Nganga is a stronger believer in investing in and nurturing people and credits this for his successful leadership journey.
“How you approach the people you work with is important. I’ve always felt that anybody I work with has something to contribute if given the opportunity. So, if I get onto a board, I want to know the people. I want to hear their point of view or their way of thinking. I want to feel that everybody that works for that organisation is valued and given an opportunity by whoever they report to, to grow, to make a contribution. Although it’s not fair for one to try to evaluate oneself, I have a lot of patience,” he says.
“Never tell anybody that their ideas are stupid, or are not worth listening to because nobody in this world is the repository of all wisdom. You can learn a lot from people or places that you never expected would have elements of wisdom. I like to encourage people to come to me.
In the early stages I was actually complimented by a very senior person, who I won’t reveal, for my ability to delegate. If you do not delegate, you become an obstacle, because you’re not allowing the totality of the knowledge, capacity and capabilities of people to unify, in order to make a better service or product. I have found myself more often than not being asked to lead the boards that I have sat on and I credit that only to patience and value for people.”
Mr Nganga is complimentary of the two larger-than-life corporate leaders — Michael Joseph and Bob Collymore — he worked longest with at Safaricom: “Both are very, very strong leaders, with a passionate commitment to the growth of the business, particularly from the point of view of using communications to improve the lives of people. They were both innovative, people who think outside the box. They want to see how much the capacity that is available in the company, in terms of technology can be enhanced to bring new services and products that will impact on people’s lives,” he says.
But he notes that every leader has a different style of management and leadership. “You cannot evaluate them exactly on the same scale because their leadership styles were different. But at the end of the day it boils down to their passionate commitment to the growth of the company and to using the company as a tool to improve people’s lives.”
Then we ask him about the two leaders’ unique traits and the question throws him off-balance. For a full minute, he stares pensively out of the window, laughs uneasily, fiddles with his phone, and says: “I’m not sure that is a good question to ask me”.
Then he speaks: “They’re very similar. They’re both very hard drivers. They demand the best from every member of their staff; they’re both totally committed to integrity and will not stand any actions that are not within the right moral codes. The difference would perhaps be in approach to how one achieves one’s own objectives. You may have a stronger bias for products or for services. … (silence) It’s a difficult question.
After Mr Collymore came the current CEO, Mr Peter Ndegwa, who took up office in April. His appointment followed years of anticipation and agitation for the telco to get a Kenyan chief executive officer.
Mr Nganga says it was always envisaged that Safaricom would be led by a Kenyan at some point. “In every board meeting we would talk about succession planning and, for instance when we recruited Bob Collymore, part of his assignment was to develop a Kenyan to take over from him. It is not as if we woke up one day and said ‘let’s have a Kenyan CEO now’. It was a very natural progression. Even at the time when we were interviewing Bob Collymore, we were actually looking at CVs for Kenyans to establish if there was anyone we could entrust with this high responsibility, and while there were many highly qualified Kenyans, the main problem has always been in industry knowledge, not because people don’t know, but because it keeps evolving fast. At the end of it when it became clear that there were no ready-made people with strong leadership, combined with industry knowledge, it was a fairly simple decision that we would find somebody strong enough in all other competencies to be able to run the company, and we give them industry support.
Anybody that would have been able to step in the footsteps of Michael Joseph or Bob Collymore would not be found idling out there with no job.”
Mr Nganga also had to constantly deal with pressure about Safaricom being a dominant player, including demands to accommodate its competitors.
“Nobody seems to want to ask why Safaricom succeeded and they didn’t. When you talk about dominance – and it’s terminology being brought from outside and being misapplied. Because dominance, defined by percentages of market share does not tell the whole story. Dominance should be defined to show whether you’re using that market share strength to either make undue and improper profits, or whether you’re using your strength in the market to undermine competition. There’s nowhere anybody has ever accused Safaricom of undermining the completion, which it could do very easily if it wanted to drive anybody out of business, by simply underpricing its products.
As a board and as a company we’ve always taken the view that, until somebody tells us why our position is seen in a negative, rather than a positive way, we don’t feel that it is justified to be talking about our dominant position.
It is a position that has grown into out of simple, careful and well-organised, regulated investments and management, and wise decisions, innovation and, the question is: What’s wrong with that? It’s what the country needs. Like my late friend Bob Collymore said; “What you need instead of running Safaricom down is to create another 10 Safaricom in other areas and fields. So we feel the application or the use of the language of dominance is not fair to Safaricom,” he says.
The problem, he adds, is part and parcel of the ecosystem in which we are, and Safaricom as a company will have to continue defending its position. It’s an issue we do not see walking away, until somebody develops a company that is offering strong and fair competition to Safaricom.
Going forward, he sees Safaricom continuing to grow in making its technology platforms more available for development of services and products that are capable of solving people’s problems and enriching their lives.
He also sees the company venturing outside Kenya: “Potentially there is scope for investment outside the country. The company has realigned some of its structures towards such investment.
It is still under very intensive investigation. You’ll find, wherever you go that the regulatory framework in every country is different and every one of them is not the same as the other either. So, you do not want to jeopardise the financial health and strength of the company by going into investments that you’ve not fully investigated and been satisfied that your investment will be successful.”
On gender, “I believe that, given a chance, women are as good, and in some ways better than men in certain aspects of management, and we believe that in our kind of business they would be able to carry out any of the responsibilities that me carry out. We’ve had reasonable gender representation at board level. Our board composition depends on the nominations by our main shareholders, and they can nominate men or women. At the management level, there a clear mandate by the board to management that within a given reasonable time there will be equal representation of the genders in all roles. In certain categories of our workers, there are more women than men. That has not quite crept up to the senior management level, though even there is a very strong representation of women. It is a deliberate approach by the company that, to the extent possible, say be the next five years there should be gender parity in all areas. And representation in its various grades of persons with disabilities. We feel that the world would be a better place if everybody is given an opportunity to bring their competencies to the table or to the corner office.
Can Safaricom’s success be attributed to this policy?
I’m not sure that you would try and separate success into gender roles and so on because everybody in the company works as a team. It’s possible that at certain levels the gender contributions to the success have been stronger than others. People tend to see success just at the top – the products and the profits. We tend to forget that this is an accumulation of efforts all the way down. For example, how much do we value our call centre staff, of whom the majority are women? How would you assess the contribution of that to profitability? Yes the roles of the different genders have contributed to the growth of the company in whichever proportions.
How would you like to see boards in Kenya evolving in view of demands for diversity in terms of age and gender?
I would like to see them evolving naturally because if you try to force boards say to have more young people, which competencies are you going to sacrifice to bring in a person, purely because age becomes the predominant consideration? Boards evaluate the gaps in their competencies by looking at who they have and what is out there that they can get to fill the gap.
If the competencies are either with people of a different gender, or with the youth, most boards will be happy to bring them on board. You just need to look around in recent times and see how many younger people, and particularly younger women are being brought to boards because they’ve developed the competencies.
They’re not there because they’re women. That might be a consideration of you have two people of equal competency and you have a gap on gender in the board, so you bring a woman on the board, or a younger person.
And this is going to happen very much so now that young people are gaining competency not only in the country, but also outside the country. As we go into a more technologically based era of board management, we’ll have younger people who have all the necessary competencies to join boards. I’m all for it.
Where do you go from here?
I live on a farm in Tigoni, and that’s where I go from here. I still hold appointments in other corporate bodies, and I’ll continue offering my services to my country because I really and truly believe in giving services. I also believe that it’s good for people like myself to continue exercising their minds.
So, much as I’ll go and enjoy looking after my tea, I’ll also be happy to continue serving on the other boards on which I sit, some of them as chairman and in others as an ordinary director.
VIEWS ON EQUITY
It will come from the development of a spirit and feeling of care. The concept of care, the concept of sharing. This world was not made for any particular group of people. The resources that are available would be adequate for everybody if they were properly shared. So, it’s a question of finding mechanisms, and training minds to accept that for another person to benefit, I have to concede something.
I see this as a very big challenge in a country like this where people have not fully appreciated that everybody is everybody else’s keeper and that without the other person, your own life might not be as good as you think.
What has been the mark of my success: You have to value people. You have to accept that everybody is here by design, not by accident. People are here because they deserve to be here. They have a contribution.
The smallest person has a contribution. You’ve got to respect that contribution and enable that person to contribute to the welfare of the whole. You have no business looking down on anybody or feeling that you’re more entitled than the other. So, it is grounded on everybody feeling the duty of care for everybody else.