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Nigeria must shrink targets to get economy stable

By PRINCE OSUAGWU

Different people have different ideas about how Nigeria’s economy could get to the desired spot in the year 2020. So when Indian-American business consultant, speaker and writer, Ram Charan visited Nigeria to attend the MTN leadership forum recently, a few journalists seized the opportunity to sound him out on way forward for the country’s economic revival campaign.

Charan has consulted for companies such as GE, KLM, Bank of America, Praxair and Jaypee Associates. He is the author of various books on business, including Talent Masters, Leaders At All Levels’, Leadership in the Era of Economic Uncertainty: The New Rules for Getting the Right Things Done in Difficult Times, Boards That Deliver, What The CEO Wants You To Know, Boards At Work, Every Business Is A Growth Business among others. The man truly has ideas on his head and to say the least, his ideas on way forward for the Nigerian economy were entertaining.

What is your impression of Nigeria so far?

I’m very positive about the Finance Minister I met. You have a tremendous talent in the nation.  You have lots of resources. You are making progress. You need to accelerate the progress. Focus on a few things and get them done.

How do we do that?

It’s as simple as it sounds. Just focus on a few things. Get them done. Build the image – this is a country where things get done. People will knock on your doors. You need to fill the skills gap, first. Second, look into agriculture. Get a few companies, say 10 companies, to come here and invest. Then, get power right. Not 10,000 things. The greatest mistake you can make is to attempt to do everything. No. Select a few things. Build the image of this country. In terms of potential, you have the right resources, and by that I mean the human resources. Train the people. And put well trained people in the right jobs.

*Ram Charan
*Ram Charan

A major problem here is that the well trained people do not get put in the right jobs where we can profit from their expertise as a nation. Do you have any idea how we can solve this problem?

This is not peculiar to Nigeria. Probably all the problems you have can be solved. But you cannot solve them all at once. You have to take them one at a time. First fix the private sector. Fix the shortage of skills there. You can create a training programme on how to get things done, project management. I talked to the Finance Minister yesterday. She understands it. And there seems to be concrete steps being taken as they have already sent people to Malaysia to learn it. So don’t make the problem too big. Focus on a few things. Get them done.

What is the role of management in achieving the economic goals we have set?

Getting things done is management. It is not a new role. It is all there is to management. The MTN management get things done. That is why they are where they are today. They won’t be here without knowing how to get things done. So you train people on how to get things done. It’s not the ideas. Ideas are available on Google today. Your people are as bright as any other nation.

It’s not an issue here. It’s the issue of skills and training. That’s what makes the difference. So, that is going to be done largely by existing people who know how to get things done. Keep it very simple. Don’t make it too complicated. Don’t copy other’s style. Don’t go for ‘big thinking’. It is not about big thinking, because, big thinking is available today on Google. It was not so five years ago. McKinsey Institute publishes big thinking. It takes you ten minutes to go look into the website and you pick up all the ideas you want. So I don’t want to do any training on big thinking, because you can do it on your own.

In training our people, do we have to rely on foreign expertise?

That is a very good question. First of all, ascertain what skill gaps you have and how many people you need to train to fill those gaps. 5,000, 10,000? Don’t put the wrong people in training. Second is that you need to find very good trainers wherever they may be in the world. They may not be in America. They may be in Sweden.  They may be in India. They may be in Canada.  They may be retired people who have done it. They come for a limited period. They train the people. They observe them. And they go back.

How can Nigeria and other emerging countries benefit optimally from the global tilt?

That is simple. As I said, you have 160 million people in Nigeria; 300 million in West Africa. So the market growth is here. Pick your six industries, six companies; bring them here. Create your joint ventures. Get the relevant licences for them. Use the tilt to build the nation. MTN in Africa and outside the continent; they have the technology. They have to buy and borrow and get licence. They’ve got to get the expertise from outside. Today, they are a very good example of a world-class company. They have 50 million customers. One day, I hope they have 500 million people. Why not? The total population of Africa is about a billion. Why not?

So how would you advise executives to lead their businesses through the Great Economic Power Shift you talked about in your book?

The fundamental thing here is how to make sure the core competence of your company stays relevant in a tilted world. Let’s begin by looking at what happens when a company’s core competence is not shed or replaced as it becomes less relevant. We can learn from the sad breakup of Kodak. It is a warning to business leaders that:  It’s not just your technology that may be growing obsolete but your whole approach to creating strategy.  In today’s fast-changing world, the central mental skill of leadership is the ability to identify long-term, large-scale opportunities. Once you spot those opportunities, you may have to build new capabilities to pursue them.

The problem for many executives is that this line of thinking is the opposite of lessons you have learned for much of your career, which is: Stick to your knitting; stay with your core competencies.  For several decades, leaders have grown their businesses by finding new ways to apply their existing core competencies.  But that approach tends to prevent leaders from seeing that their company’s wonderful unique strength is becoming less relevant in today’s fast-changing world.

Look again at Kodak. In the late 1990s it expanded its film business into China, an untapped market that then-CEO George Fisher saw as an enticing opportunity for growth. At that time, it was impossible to get nationwide access to China.  Regardless, Fisher worked tirelessly to develop relationships with Chinese state-owned enterprises, provincial governments, city governments, ministries, commissions, and banks, and even played tennis with Zhu Rongji, who became Chinese Prime Minster in 1998. Eventually the doors opened.

In 1998, the company committed to invest $1.2 billion in two joint ventures to manufacture and distribute film, paper, and photochemical products in the country. Fisher wisely established the ventures in a way that gave local partners minority stakes in exchange for business assets, ensuring that Kodak would have operational control. Despite the political risk, it seemed that Kodak was making a breakthrough, and investors approved.

But while the Chinese deals expanded Kodak’s core business and leveraged its tremendous capabilities in film, they did nothing to solve its bigger problem: the shift to digital photography. Kodak had been pioneering digital technology since the 1970s. It had a crude prototype of a digital camera as early as 1975 and in the mid-1990s helped Apple develop its QuickTake 100 digital camera.

Competing in digital technology was a different game altogether and one that threatened Kodak’s core business. The company didn’t dominate the field the way it did in film but was one of many players.  The market was also less predictable, and margins were lower. Despite the growing importance of digital imaging, the old business commanded the resources and management attention for too long.  Later efforts to speed the transition to digital were unable to stem Kodak’s decline.

There is an important lesson in this example for you – don’t rely on core competencies that are becoming less relevant; instead, build the competencies you need to keep your business vibrant.

It would seem the quality you are advocating in corporate leaders is fortune-telling. How easy is it to read the future?

That is what I call the Future-Back approach. This requires you to extend your time horizon as you assess the world and imagine what the competitive landscape will be some 20 years out. This longer time frame will help you see what trends are enduring, or unstoppable.

The point is to see what’s coming— soon or many years away— in time to adjust.  This kind of broad, forward-looking view informed GE’s decision to sell its plastics division in 2007.


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Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.