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. 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.
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. 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 others’ 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 two 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?
Very good question. First of all, ascertain what skill gaps you have and how many people you need to train to fill those gaps. 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.
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. Top management foresaw that a move into plastics by the Saudi Arabian public-private partnership SABIC would ultimately alter the competitive game. Plastics were a profitable core GE business. But neither profits nor sentiment kept the decision makers from looking at the business with clear eyes. They realized that one of the unit’s core competencies was no longer going to be differentiated, given the incoming competition and commoditization. Reshuffling the portfolio for the future global game, they sold the division to SABIC for roughly $11 billion. You must be able to let go at the right time and move onto new growth trajectory.
What if your company lacks the core competence to move into the new growth trajectory you can foresee?
Jumping onto a new growth trajectory may require capabilities you lack or barely have. That shouldn’t necessarily stop you. Indian infrastructure company GMR, which built the Indira Gandhi International Airport in Delhi to rave reviews, knew virtually nothing about building or running airports when it made a successful venture into that business. It partnered with experienced players it could learn from and worked hard and fast to build its competence. This successful entry into the airport business followed similar moves into power plant and highway construction.
What is the most important message you will want Nigeria to take away from here.
Very simple. Think as a 300 million people market. Pick a few things and get them done. Build an image of a country where leaders get things done. Period. That’s all you’ve got to do. Easily said, but hard to do.
I was actually looking at the private sector. What would you advice as a way of dealing with it?
Stay with the things I said. Forget the rest. Corruption will not be solved. Don’t dissipate your energy on it. You are wasting everybody’s time including yours talking about corruption. It is your reality. Confront it. Talk of eradicating it is a nice cocktail, academic discussion. But I say, forget it. It’s not going to happen. Just do something constructive. Check it.
Having seen Nigeria, do you think our system can support the lofty ideas you enumerated earlier today?
Do not focus on the system. Focus on people. People will change the system. Western people teach you systems. But you are in the early stages. Western people created these things hundreds of years ago and they are better at them. Go to work.
There is this school of thought that for countries to develop, they need to implement policies introduced by such institutions as IMF, etc. Do you agree with this?
No. It’s very simple. I think we talked to six people in your (Finance) Ministry yesterday. We were talking and we said let’s get the right person to run your power project here. Fix the roads. Get your transportation running smoothly. The telecommunications sector is doing well. Make the environment suitable for more growth. Do all that and more and you don’t need any IMF to tell you what to do. They will give you money without asking. So, let’s go and fix the problems. Don’t dwell on the bigger stuff. I talked with your Finance Minister, and I think she is one of the brightest Finance Ministers I know, and I have known a lot of Finance Ministers in my life. You are making progress. You can accelerate though. Pick a few things, work on them, get them done. And repeat. It is not very exciting, but when you achieve your goals, it is exciting. Success is exciting, and you get the fuel to go after other goals and repeat the process.
How can management encourage the know-hows that you talked about in your book?
There are a number of premises that I have personally observed over time in a number of industries, a number of companies, a number of countries. The first one is that the 21st century is different from the 20th century. What are the differences? The first and foremost difference is transparency. You cannot hide your performance anymore. Outside activists, inside employees– both of these are going to demand performance.
Number two is that personal traits are very important. The courage, the vision, a cognitive bandwidth, a fearless move, the bold thinking. They are important and must be put into active practice. Just like an athlete has a raw talent, which is important, but has to be practised to give him or her an edge. If you don’t practice those talents, or personality traits into cultivating the skills, in today’s environment, success is not assured.
The growth in the world is fantastic. Look at the last five years’ global growth– new opportunities, globalization, new areas of growth going on all over the world. There is more demand for leaders than supply. At the same time, the environment for evaluation is harsh. So I am suggesting, when you’re 25 or so, you know what your personal traits are. Become aware of them. And then decide which area you want to concentrate on and polish. Cultivate the skills, do the deliberate practice like the athletes do, like the orchestra leaders do, until it becomes your know-how.
Why do I call them know-hows? It is because a skill, until you practice it very well, does not become part of your DNA. It does not go to your subconscious. It has to become instinctive. That’s why the word know-how comes about. You convert those skills by practicing your personality traits and practicing goals with these know-hows in real situations, just like all the people who become champions practice their skills.
Now, to the part about how to encourage. I will say this, a leader who does not know how to get things done through others is not a leader. And you cannot get things done through others without knowing how to encourage, motivate, coach and mentor others to perform better. A leader who cannot produce other leaders is not a great leader. It is becoming a major requirement, that people in companies will be promoted on the strength of their ability to produce other leaders.
Leaders have to identify high-potential leaders and to make them aware of what their God-given gift is, and how to polish it. They must know how to train such potential leaders, how to give feedback, how to give coaching, and how to put them in the right jobs. Right people in the right jobs is the essence of developing leadership. It is not money. It is investment of emotional energy and time, tailored to an individual’s development. That doesn’t mean ticket punching. It means real experience, rigorous evaluation and rigorous feedback.
How do you know potential leaders and what are your specific ideas as to how to coach potential future leaders?
It’s simple, or better put, it’s a process that is simple to high-performance leaders. There is a distinction between a high-performance leader and high-performance individual. The difference is that a high-performance leader gets things done mainly through others. A high-performance individual does the things himself or herself. That’s a huge distinction people need to come to terms with. Having said that, you will find high-performance leaders. They show signs early. These people are able to command respect without authority. These people think externally first. These people seize opportunities. They talk, they dream what is possible. So these are some of the signs of these people.
Now to the coaching part, and here basically I’m talking in terms of the template. This is because the situations will be different from individual to individual, company to company, sector to sector or country to country. First, you need to get the person to see effectively what is happening in the external world; external change. Senior leaders can really coach people to see how to connect the dots. What are the trends? What are the patterns? This raises people’s altitude of vision of what’s happening on the outside. The senior leaders need to engage the individual. How does the individual see? What are the other ways of seeing the same things? That’s a huge coaching. It is not classroom training.
The second coaching is in the area of people. How good is this person in reading people, judging people, selecting people, dealing with people issues, etc?
Third how good is the leader at expanding the future leaders’ strengths? Does he test them in different circumstances, and asks himself the question, ‘what is coming in this person’s way to go full blast?’ Don’t try to make the person perfect in every area. That is where the coaching fails; when you really focus on the negatives instead of expanding the positives.
Do you really think the countries in the southern hemisphere can catch up with the countries in the north?
Number one, go back to the basics. Leaders make or mar the countries. How many people thought in 1979 that China would become number 2? Who made China? Not all the billions of people there. At least, not directly. It’s down to about 50 leaders? Or maybe 200. Who ever imagined that China would have $7 trillion economy even 15 years ago? But China didn’t do it. The leaders of China made it happen, with support from other leaders.