How to make world-class companies in Africa

7 mistakes vs 7 golden rules

In the 2016 Forbes Global ranking, they were only 21 African firms listed among the largest two thousand in the World. About 10%, when the Continent concentrates 17% of the world’s population.

I have spent a lot of time thinking about the reasons why African companies deliver such poor performances. Of course, there are some well-known exogenous reasons: the unfavorable business environment, a lack of regional integration, the political and social instability, the weaknesses of the legal systems, and many other critical assets that Governments and public institutions failed to guarantee. However, those issues only represent one side of the coin. The underperformance of African companies also lies in their heterogeneous conception of business management. From 10 years of experience working with various sizes of African-leaded ventures, I have put together in this post the seven most common mistakes I have noticed.

1/ Feelings-based decisions and questionable “experience”.

Build a data-driven decision culture.

In a lot of African companies, there is a significant share of decisions made randomly. Unlike what we may think, this is a reality even in the largest organizations when it comes to critical matters. There are too many acts of improvisation and decisions based on a questionable experience.

It is high time African companies invest in market data and understand that knowledge is the first source of competitiveness. They also need to spend more time generating and analyzing data from their performances, results, and operations. Doing this is critical in improving their performance and getting able to compete with world-class enterprises.

2/Excessive focus on the present.

Develop a long-term view.

“Most of the time, decisions are only profitable in the short run or in a long run. Rarely the two. I tend to pick options that drive results in a long run. ” — Tidjane Thiam

The Ivorian CEO of Crédit Suisse has a point. In an ever-developing world, everything is going extremely fast. Products and services cycles are getting short and shorter. Winners are those who spend the present shaping the future.

3/ No boundiary between family and business.

Recruit people on the basis of their skills not on their DNA.

Working with friends or relatives is not a wrong choice in all cases. It turns out to be negative only when people are chosen not for what they can bring to the company, but only for who they are. In the last case, it inevitably impacts the company’s performance and drags the results down. Unfortunately, this is a cultural habit deeply rooted in African organizations.

It is fine to mix business and family. A lot of big corporates started that way, as family businesses. Some ventures keep that status even after going public. However, the condition to grow is to make sure that the family keeps serving the best interest of the company. It’s up to families to invest in the businesses, not the reverse.

4/Managers are half-gods.

Put less focus on job titles, and more on collaborative work.

In many African companies, the managers are so focused on their titles that they do not encourage collaborative work. The hierarchy is still very strong and most of the innovative ideas happen to get lost in the organizational layers and processes. A lot of contemporary African companies and managers remain stuck in the past, reproducing a post-colonial organizational scheme, with the settlers dictating the orders and the local staff executing them.

African managers now need to inspire, to federate, to create energy and cohesion in their team. Not to be feared, and seen as distant supervisors.

This is the way they will grow their team’s engagement and unleash innovation within their companies.

5/The “Super boss” mindset.

Even Batman has Robin to help him. Delegate. Trust.

One of the saddest realities in African companies is the way the founders sometimes behave. African CEOs typically want to make decisions on every single thing about their company. Literally. They act as CEO, GM, CFO, CMO, COO, and also Communication lead, Logistics experts, and PR specialist. Founders frequently overestimate their capacities.

They need to hire talented people and put them in charge, not just in place. They need to empower their staff and make their teams work hard. They have to delegate some strategic tasks and let them a chance to win their confidence. They should understand that they might own a vision for the company, but it takes a collective engagement and talented people to make it come true.

Being a good leader isn’t about knowing everything. It’s about getting people with the right skills in the right place. A good boss doesn’t need to know, see, or validate every little detail. He just needs to make sure all the employees share a collective vision and have the necessary skills to make it happen.

If a company can’t survive without its founder, then there is a lot to be worried about.

6- Poor design

Everybody likes nice products. Everybody.

African companies don’t pay attention to design enough. They see it as a superfluous detail that brings no competitive advantage. “A white people concern”, they say. However, do you know a single person who doesn’t like beautiful things? Everybody prefers when a product — or a service — is nice besides being functional. That’s the reason why, on so many markets in Africa, imported goods are preferred to the locally-produced ones, despite their higher prices. Foreign producers have understood how determinant design could be. African companies need to pick up as well and align with world-class standards in this domain.

7/ Poor customer service

African customers deserve to be treated better if we want them to spend more on African products.

The notion of “experience” is still uncommon in Africa. The baker considers his job done as long as you get your bread. No matter how long you wait for it, how ugly the bakery is, or how unpleasant the waitress is. Most of the African companies just don’t care. It’s a shame.

They should not only be focused on what they do. They should also understand that the way they do it highly matters. This is what they could build their difference in, in a world where new products are copied so fast.