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Two habits of successful Kenyan companies

Wolfgang Fengler's picture

My colleague Jane Kiringai and I have been visiting Kenyan companies every 2-3 weeks. These visits have convinced me that Kenya can indeed make enormous progress and prosper. The strength of these companies and their peers is one reason why, after four waves of shocks since 2008, Kenya is still standing. Just imagine of how the country would prosper if the bottlenecks facing companies and individuals were removed!


We have been visiting companies producing cut flowers, textiles, dairy, consumer goods, telecommunication services, and most recently, an up-and-coming brewery. Despite their differences, the most impressive companies were similar with respect to two related management principles:

 

  • Empowering the “factory floor”. All strong companies empower their employees.  The most memorable moment was at BIDCO , one of the largest consumer product company in East and Central Africa.  At the central part of their Thika factory outside Nairobi, Jane and I climbed several ladders and, in the middle of many huge pipes, we met the “factory floor manager”. He was responsible for keeping the machine room running. With great pride he showed us his reporting sheet which documented the pass-through of a substance in 15 minutes intervals, including the measures he took to correct any errors. The mid-level manager who guided us through his company told us: “We managers need to follow the 20/80 rule – 20% routine work and 80% strategy. We should not interfere in the day-to-day running of the operations”.
  • Performance culture.  Most of the companies we visited measure the performance of their employees on a regular basis. The cut-flower company Oserian  in Naivasha impressed us all.  They recognize the most productive worker on a daily basis. The worker– typically a woman–receives a salary top-up and a flag that everyone can see from across the factory floor. Another good example is Kencall ,which we visited when World Bank Chief Economist Justin Lin and Africa Chief Economist Shanta Devarajan came to Nairobi in December 2009 (see picture below). Kencall was voted the best call center outside Europe in 2008.


I wonder if we could introduce these management methods in other organizations, including the World Bank.

Picture: Justin Lin taking a call (with, from right to left, CEO of Kencall Nick Nesbitt, Shanta Devarajan, Celestin Monga, and a Kencall employee)

Comments

Submitted by Zeeshan on
Thanks for sharing this, Wolfgang! You dont see these sorts of posts in World Bank blogs, while they are a dime a dozen on business magazine websites, which are often more journalistic. Your first person account is nice to see/read. Please keep us posted!

Submitted by Annie on
How interesting! Especially, as you mentioned, in light of the economic shocks. The next 10 years are going to be astounding, I'm sure.

Submitted by Annie on
I think my last comment got deleted. In any case, thanks for this interesting article! The progress, as you mentioned, is especially encouraging given the economic shocks. The next 10 years will be astounding, I'm sure. -Annie

Submitted by Wanjohi on
That is indeed true. Its akin to the Harambee spirit.. the problem however is that in as much as they are committed to doing good, they use the cod-fish mentality as opposed to the chicken psyche. A cod fish lays 1000 eggs quietly. A chicken lays one and makes a hell of a fuss from it. We end up eating the chicken eggs as opposed to the codfish..why because the codfish never alerted us of its eggs. The same applies to our private sector. And when they do communicate its haphazard and ill directed.

Submitted by wanjohi on
Sorry Lee for this late reply. My point is simple. Well timed, properly channeled and cleverly thought out marketing is what the East African giants need. A hen does well when it proclaims to all and sundry about its impending egg, hence the egg ends on our breakfast tables...not so the codfish which is quiet when the big occasion comes around. Hope I have clarified or have I confused you some more?

Submitted by ERIC on
I ACKNOWLEDGE THE FACT THAT YOU MENTIONED OUT BIDCO, I APPRECIATE THEIR GOOD EMPLOYEE RELATIONS. BEING A 4TH YEAR STUDENT AT USIU AND HAVING DONE A RESEARCH ON BIDCO AS A COMPANY, I THINK ITS A GOOD PICTURE FOR THE ENTIRE INDUSTRY IN KENYA.

Submitted by Efon Epanty on
I believe that africans should be the once deciding and making decisions about themselves. I want to believe that africa just need africans to develop the capacity to do things for themselves without foreign thoughts and control all the time. We need Africans to work as lead economist for their regions because they better understand the culture, languages, habits and intrigues of their people and regions better than the best foreign educated scholar or practitioner. I believe that africans can articulate better development strategies for their countries and regions.

Submitted by wasnai on
To restart the export engine Kenya need to look into sources of cheap electricity as this is what resulted in gradual closedown of factories in our industrial areas,export production cannot thrive here when cost of power is so high i have been there and i know this to be true.

While it’s been noted in many World Bank reports that the key to unlock Africa’s underdevelopment is through infrastructure development, there still remains much to be done in the area of financial support. Arguments can swing either way on where support aid should be coming from. Whether one agrees or not, multilateral and bilateral donor aid continues to play a vital role in Africa’s stride towards development. While this remains one path through which funding can help drive infrastructure development, the amount required to see significant and accelerated economic growth remains well in excess of what is currently provided by these multilateral donors. The private sector has been considered the best medium to bridge the identified funding gap the continent is currently experiencing, according to a World Bank report. Implicit in the report is the suggestion private investment should come in the form of Public-Private Partnerships. While there are merits in this argument, a number of risk factors serve as a deterrent to this strategic direction. The private sector will be reluctant, to a large degree, in investing in regions of the world where there are risk factors well in excess of their ability to manage. Political instability and economic uncertainties rank highest amongst these factors. Without an doubt, private sector involvement is still the way to bridge the funding gap - gaining the right level of confidence towards their involvement will require some degree of partnership with multilateral donor agencies and making ‘true’ investments a reality. The support referred is by no means trivial or simple. It will require ‘thinking-out-of-the-box’ approach involving both conventional and unconventional means in dealing with problems. The likes of MIGA providing political insurance may simply not be enough are acceptable by private investors. While there are external risk elements to contend with there are also other risk factors, often overlooked and internal to multilateral donor agencies, that could pose threats to how investment decisions are taken. Unlike external risks which tend to play a larger role with private sector involvement, these internal risk factors play a more pivotal role on how investments decisions are taken within organizations like the World Bank. Less likely considered by many or recognized if at all, their impact could play a defeating role on any possible partnerships with private investors towards meeting their global poverty reduction programs. A postgraduate research is currently looking on how these strategic risk elements, comprising both external and internal risk factors, could have any effect on organizations like the World Bank in meeting their primary objective as an entity towards reducing poverty and promoting economic development in emerging countries. Rightly suggested, the path to effective and meaningful economic development is to see a rise in infrastructure development on the continent. The most logical way, considering the significant investment involved, is to engage the private sector and enable them through a favourable business climate and support from multilateral donors, to go down the investment path on the continent. On this note, I encourage World Bank staff and similar organizations with vested interest in Africa to take part in an online survey towards establishing sources of strategic risks affecting multilateral donor agencies in the area of supporting Africa’s infrastructure development programs. The survey link is provided below: http://www.eSurveysPro.com/Survey.aspx?id=830d22c4-1f15-4ec6-94c4-d6bcfb9ff602

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