BUSINESS BUILDING A STRONG - A look at Africa's leadership crisis - KIM Repository
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December 2017- January 2018 A look at Africa’s leadership crisis PAGE 50 BUILDING A STRONG BUSINESS Andrew Heycott, CEO Mabati Rolling Mills, talks about the 56-year-old roofing company, leadership attributes and the future of the company
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CONTENTS
December 2017 - January 2018
News analysis
The way forward for Kenya post
2017 poll - Page 10
Advertising FEATURES
A look at the companies that emerged tops in the
COYA/SMOYA 2017. They include Gogni-Rajope
Construction Company Ltd, Betahealthcare,Twiga
Chemicals and ICEA Lion Page 22 - 31 36
iNSpirAtioN
How a job rotation helped Duncan Juma
realise that his back office customer
care job was a mismatch with his
passions. Page 28
34
38
SMART Leadership
Reverse mentoring- Understanding
the real benefits of learning from
millennials Page 32
Country report
What African agriculture can learn
from Brazil page 46
December 2017 - January 2018
Management Magazine
1
CONTENTS 54
December 2017 - January 2018
Money matters
Plan for your money wisely to achieve
short, medium and long term goals
Page 48
Smart solutions
Your digital footprint could kill
your career Page 52 60
62
Tactics
5 Tips for scaling your influence
as a millennial entrepreneur: How
to turn your name into a legacy in
your industry page 56
Healthy Living
Is your child playing enough?
Dr Justine odionyi explains why
play has a crucial role in brain
development among children.
Page 58
December 2017 - January 2018
Management Magazine
2
BUILDING FOR GOOD
Stone Crusher Road Equipment
Plant Construction hire
KISUMU NAIROBI
P O. Box 353 – 40100 P. O. Box 8978 – 00300
Kisumu , KENYA Nairobi, KENYA
T: +254-708-740-729 T:+254-734-609-595
E: info@gogni-rajope.com E: info@gogni-rajope.com
December 2017 - January 2018
w w w.g o g n i - ra j o p e.co m Management Magazine
3
FIRST THOUGHTS
December 2017- January 2018
A look at
What you need
to know about
Africa’s
leadership crisis
PAGE 50
BUILDING A STRONG
BUSINESS
money disorders
W
Andrew Heycott, CEO Mabati Rolling Mills, talks about the 56-year-old roofing company,
leadership attributes and the future of the company
By SAMMI NDERITU 1. Money Avoidance
Disorders. This includes
hat is underspending, excessive risk
HEAD OF COMMUNICATIONS AND CORPORATE AFFAIRS:
your aversion and financial denial,
Miriam M. Chege (mchege@kim.ac.ke) rela- “when, rather than face financial
tion- reality, we try to minimise
EDITOR:
ship money problems by refusing to
Tabitha Areba (tareba@kim.ac.ke)
with think about them all together
SUB EDITORS: mon- (e.g. avoiding looking at a bank
Murugi Ndwiga (ndwigam@kim.ac.ke)
ey? statement or paying a credit
Brenda Muse [bmuse@kim.ac.ke]
What goes on in your mind when card bill).” Those with financial
STAFF WRITER AND PHOTOGRAPHER: your bank account has money or rejection experience guilt
Sammi Nderitu (snderitu@kim.ac.ke) when it is empty? Does having whenever money is accrued.
DESIGN & PRODUCTION:
money make you happy or anxious? 2. Money-Worshipping
Vincent Mwai (vmwai@kim.ac.ke) According to Dr. Brad Klontz Disorders. These include
a financial psychologist, just pathological gambling,
CONTRIBUTORS: about everyone has a complicated workaholism and overspending
Vincent Kimosop, Robert Waruiru, Grace Maingi, Duncan relationship with money. or compulsive buying.
Juma, Mercy Kamana, Nidhi Sina, Robert Kanyua, Mercy
Dr. Klontz adds that financial 3. Relational Money
Muendo, Mojisola Ojebode, Alfred Mathu, Benson
strain has been found to reduce Disorders. These include financial
Mugambi, Loyd Kibaara, Justine Odionyi, Boaz Kisero
relationship satisfaction, worsen dependence, financial incest and
COVER PHOTO: Allan Gichigi
depression, and lead to emotional financial infidelity, like “telling
PHOTOS: Sammi Nderitu & Shutterstock photos problems, health difficulties and “little green lies” about one’s
poor work performance. spending or finances to one’s
HEAD OF SALES: In the book Mind Over Money: partner, making purchases outside
Anthony Githendu (agithendu@kim.ac.ke) Overcoming the Money Disorders an agreed-upon budget or lying
ADVERTISING SALES (KENYA): That Threaten Our Financial Health, about the cost of a big-ticket item.
Elizabeth Mbinya, Boaz Kisero, Charles Chege. Drs. Brand and Ted Klontz say The psychologists say that
money disorders are persistent when we identify our financial
ADVERTISING & SUBSCRIPTION (UGANDA)
patterns of self-destructive and flashpoint experiences, challenge
Boaz Amutuheire (boaz@luckyfamily.biz)
self-limiting financial behaviours. our distorted money beliefs,
ADVERTISING & SUBSCRIPTION (RWANDA)
They result from distorted beliefs and practice healthy financial
Patrick Ojil (ojillp@gmail.com) about money we develop from our behaviours (e.g. maintaining
financial flashpoint experiences. reasonable and low debt, having
CIRCULATION ENQUIRIES
These are painful, distressing, and/ an active savings plan, as well
management@kim.ac.ke
or dramatic life events associated as following a spending plan),
PRINTED BY: SMART PRINTERS LTD.
with money that are so emotionally we don’t just become materially
powerful, they leave an imprint that richer-we become emotionally
PUBLISHER lasts into adulthood. wealthier as well.”
THE KENYA INSTITUTE OF MANAGEMENT, Below are three categories of Sammi Nderitu is a writer,
Luther Plaza, 2nd and 3rd Floor, money disorders identified in their photographer and digital media
Nyerere Road/University Way Roundabout book: expert at KIM.
P.O. Box 43706 - 00100 Nairobi, Kenya.
December 2017 - January 2018 Email: snderitu@kim.ac.ke
Tel: 020 2535277
Management Magazine
4
We are a real estate company formed 11 years ago.
We offer cost – effective customer centric and innovative real estate solutions to our clients.
Our lines of business include:
• sale of vacant and serviced plots
• development and sale of houses
• contractor business
• a high end specialized finishes hardware
To our staff, clients, business partners and stakeholders, we say thank you for making us become the
Overall SME of the Year, besides scooping Leadership & Management and Innovation, ICT & Knowledge
Management Awards during the 2017 COYA/SMOYA Awards.
Keen on investing in real estate?
Call or pay us a visit today.
Itrade Company Ltd. Pazuri Place, Kasarani Area. | P.O Box 1646 00100 | Tel.December
0720299572/ 0706987530
2017 - January 2018
Email: info@itrade.co.ke | www.itrade.co.ke
Management Magazine
5
Perspective
Staff training yields
productivity
Zappos - an online shoe and Employee retention
clothing shop based in Las Vegas, Retention of productive
Nevada - is recognised as a legend employees is a major concern for
in the customer service world. HR professionals and business
The company has an employee executives. HR data analytics
culture with a singularity of mind show that it is more efficient
focused on customer service. to retain a quality employee
Everyone that is hired - accountant, than to recruit, train and orient
Whatever form the lawyer, software developer - goes a replacement employee of the
crisis may take, through the same training as the same quality. Employee training
business leaders call center reps. It is a four-week is one of the few exercises most
should develop training programme and then they companies/businesses conduct to
are actually on the phone for two improve employee and business
a swift response weeks taking calls from customers. performance. Training employees
approach.” At the end of that first week of empowers them to perform
training, Zappos makes an offer to diligently even in tasks they
the entire class of payment for the doubted they could when joining
W
time already spent training plus a the company. A good case study is
By MURIITHI NDEGWA
bonus of USD2,000 to quit and leave Quicken Loans Inc., Michigan. The
hile the company immediately after the online mortgage lender’s offers its
it’s training. According to Tony Hsieh, full-time employees an average of
easy the CEO of Zappos, paying new 350 hours of training every year and
to hires to leave may seem counter- has a low 13 per cent full-time staff
view intuitive, but it makes simple sense; turnover rate.
in- the goal of is to weed out the people
vest- who are just there for a pay cheque. Bottom line
ment Training has always been a great
in employee development as a Increased productivity option for organisations to build
cost centre, statistics show that the There is an interesting empirical a diversified employee base, with
benefits a company can accrue from study by the American Society for team members learning the ropes
a skilled manager are wide-reaching Training and Development (ASTD) and company mores. But many
when considered wisely. There is on 540 corporations that used two organisations throw the training
indeed evidence that organisations samples whereby one invested programme to the curb after they
investing in effective staff training about USD900 for each employee feel new employees have become
and development tend to achieve per annum while the other invested well-acclimated. But this notion
both short and long term benefits. approximately USD275. The results could not be further from the truth.
revealed that the group with high Companies need to develop a
Productivity and customer investment outperformed the other consistent training programmr to
satisfaction with 57 per cent more sales and 37 allow employee growth.
Training increases overall customer per cent higher gross profit. Besides
satisfaction because of professional that, the study noted that increasing Muriithi Ndegwa OGW, HSC,
service delivery by the staff, which training expenditure by USD680 MKIM - KIM Executive
can only be achieved through improved shareholders value by an Director /CEO
targeted customer service training. average of about six per cent. Email: mndegwa@kim.ac.ke
Twitter: @MuriithiNdegwa
December 2017 - January 2018
Management Magazine
6
December 2017 - January 2018
Management Magazine
7
News Africa
Western Union reports Kenya, SA
drop in Africa business named luxury
hotels hotspots
Kenya and South Africa have been
tipped as the next continental
hotspots in luxury hotel investment,
according to a new report released
at the World Travel Market 2017
held in November.
“South Africa and Kenya are
expected to register strong growth
in luxury hotels as Sub-Saharan
Africa continues to be popular
with luxury travellers,” says
Euromonitor International’s Top
100 Cities Destination Ranking 2017
report.
Kenya has witnessed a string of
heavy investments by leading
luxury hotels in Kenya last year,
among them Accor Hotels, Hilton,
Carlson Rezidor and Acacia
Premier. Nineteen hotels are
expected to come to Kenya shortly,
M
with a total of 3,453 new rooms
in the pipeline, according to a
oney partnership with Western Union report by Lagos-based consultancy
trans- has dropped by 31.5 per cent W-Hospitality Group.
fer in the past two years to KSh3.9 A hotel must offer luxurious
service billion ($390 million) from accommodation and public areas
pro- KSh5.7 billion ($570 million). including a spacious reception hall,
vider New entrant Wave has been 24-hour reception and room service
West- the key beneficiary in the to be termed as luxurious. Five-star
ern competition for diaspora hotels must have a restaurant with
Union has reported a decrease remittances. Wave was used to a high-quality menu and at least
in transactions in Africa as com- pay 29 per cent, (Ksh4.3 billion) one permanent luxury suite.
petition for diaspora remittances of the total amount remitted
increased following increased com- through Equity Bank in its first
petition from new players. year of operation. The platform
Western Union’s third quarter does not charge transfer fees to
financials show an 11 per send money from the US, UK
cent decline in the number of and Canada to Ghana and East
transactions conducted in its Africa.
Middle East, African and South Paypal, a favourite with youths
Asian markets. doing in online jobs, has also
Equity Bank has said the volume become a key player taking up
of cash remitted through its some of the business in Equity
Bank.
December 2017 - January 2018
Management Magazine
8Oxford Business Group is a global “Simply the most accurate
economic research house and and comprehensive
consultancy producing annual reports on emerging
investment and economic reports markets available.”
in more than 35 markets. – The World Bank
THE INSIDE EDGE
www.oxfordbusinessgroup.com
kenya@oxfordbusinessgroup.com
@OBGinsights
December 2017 - January 2018
Management Magazine
9News Analysis
The way forward for
Kenya post 2017 polls
Kenya’s is neither a legal nor a constitutional problem, but a political problem that will
require a political approach to solve.
I
By VINCENT KIMOSOP
n 2017, Kenya has gone
through the phases of its
most protracted electioneer-
ing period since Indepen-
dence. The intrigues wit-
nessed during this election
include an unprecedented
scale of mass protests against
the elections management body, nu-
merous electoral-related litigations,
the first annulment of a presidential
poll, the withdrawal of a major
candidate and the resignation of among them being economic neither a legal nor a constitutional
a top election management body boycott targeting products of major problem; it is purely a political one
officer culminating in a controversial companies. that will require a political approach.
repeat election characterised by a A look at Kenya’s growth This is why even with the repeat
significant voter boycott, cancelation prospects reveals a worrying election and the apex court having
of elections in 25 constituencies, the trend in the medium term GDP pronounced itself on the same (it
lowest voter turnout and the highest growth rates for Kenya. For eight helped give the elections a legal and
victory thresholds for the eventual consecutive months, Kenya’s GDP constitutional closure) the nation is
winner. growth forecast has been reducing not yet out of the woods. It will take
The net effect of this one-of-a-kind and this is traced back to April 2017 political capital to get the country
electioneering period has been an when the World Bank downgraded out of the current situation.
intensification of the economic woes the projected 6.0 per cent GDP Proper diagnosis of the issue is
facing the country mainly arising growth rate by 0.5 per cent. As at important so as to ensure that we
from a fall in domestic and external September 2017, the rate stood at 4.8 have the proper prescription to the
market demand. This is mainly per cent. problem and use this opportunity to
attributed to a deferred focus on the The World Bank estimates Kenya’s address the matter comprehensively
economy and prolonged political economy to be USD70 billion and unlike the short-term approaches
activities resulting in uncertainty. a one percentage drop in growth that have been used in the past.
During such times, investors tend implies real impact on the lives of This is why calls for dialogue are
to adopt ‘a wait and see’ approach the populace. Things have not been fast gaining currency with a greater
even as they look forward to a made any easy particularly that emphasis being on a broad-based,
predictable conclusion of the contest. this is happening in the wake of all-inclusive multi sectoral approach.
The opposition NASA coalition the passage of the interest capping This is because of the lessons of the
has now mutated into a resistance legislation that has led to limited 2007/2008 post election violence
movement and has devised different access to credit by SMEs. that was ended with the formation
strategies to prosecute their agenda It is vital to appreciate that ours is of a grand coalition government.
December 2017 - January 2018
Management Magazine
10News Analysis
A key starting point should be in to clinch the presidency is intense.
Interestingly, even after a political
enhancing systems and processes of The Bomas Draft is a good reference
deal - the famous Kibaki-Raila
elections management to ensure that point on the options that Kenyans
Handshake - the agenda four items
the conduct of future presidential made during the development of the
were not given the due attention.
contests meets the minimum Constitution.
these included: Undertaking
thresholds of legitimacy and legality. There’s need to redefine
constitutional, legal and institutional
In order to satisfactorily realise this, the structure of the role of the
reforms; Tackling poverty and
legislative reform efforts should be Opposition. The current framework
inequality and combating regional
conducted in a bipartisan manner where we have a Leader of Minority
development imbalances; Tackling
and within a time that does not has not been effective in facilitating
unemployment especially among
coincide with electioneering periods the Opposition to engage in the
the youth; and Consolidating
in order to eliminate conflict of policy processes. We need to make
national cohesion and unity .
interest and elevate objectivity in the provision for a dignified national
design of the legal and regulatory Opposition with facilitation and
To a better future
frameworks governing elections. funding to be able to play its role of
As Kenya navigates this necessary
Experience from the performance checking government in Parliament
democratic imperative of holding
of the Cabinet indicates that and outside and promoting national
elections every five years, there is
communities in Kenya want to be integration and development and
need for a moment of introspection
represented in Government mainly this can be replicated even at the
on its negative effect on the socio-
by politicians and not professionals. county level.
economic fabric of our society.
Focus should therefore not only To foster this aspiration, there
might be need to address the Vincent Kimosop is a Policy and
be on the prospects of building
2010 Constitution structure of the Governance Expert with Sovereign
cohesion, peace and stability but it
Executive. We currently have a Insights.
should also give emphasis on how
spoilt system (“winner takes all” Email: vkimosop@
to cushion the economy from the
presidential system and “loser loses sovereigninsight.com
disruptive effects of elections in
Kenya. everything”) and thus competition
December 2017 - January 2018
Management Magazine
11Top Events
COYA/SMOYA
GALA NIGHT
Venue:
Safari Park Hotel
Date:
17th Nov 2017
Nairobi Bottlers Ltd was named 1st Runners Up, 2017 Company of the Year. Photos: Courtesy
The OPI Business Excellence Model
exists to help organisations improve
their performance and succeed in the
competitive global marketplace. The
Kenya Institute of Management is
dedicated to improving African orga-
nizations regardless of sector, size or
structure. The OPI was developed in
response to feedback from organiza-
tion participating in Company of the
Year Award (COYA) and SME of the
Year Award (SMOYA), who called on
the Kenya Institute of Management
(KIM) to refine the assessment meth-
odology in order to emphasize the
relationship between instilling smart
business processes and generating
strong business results.
The team from I Trade Company Ltd, which won Overall SME of the Year,, receives their trophy. They also took Whilst there are numerous man-
home the Leadership and Management category under SMOYA and the Innovation, ICT & agement tools and techniques
Knowledge Management award. commonly used, the OPI Excellence
Model is a practical, non-prescriptive
framework which provides a holistic
view of the organisation and it can
be used to determine how these
different methods fit together and
complement each other. The Model
can therefore be used in conjunction
with any number of these tools,
based on the needs and function of
the organisation, as an overarching
framework for developing sustain-
able excellence.
Kenyatta National Hospital took home the Judges Award.
December 2017 - January 2018
Management Magazine
12Top Events
Blowplast Ltd took home the
Innovation, ICT & Knowledge
Management under COYA.
Gogni Rajope Construction Com-
pany Ltd was recognised under
SMOYA for Corporate Citizenship
and Environmental Focus and
Productivity & Quality.
Shoppers Sacco was awarded for
Human Resource Focus under
SMOYA as well as Customer
Orientation & Marketing.
December 2017 - January 2018
Management Magazine
13Great Quotes
Ten Strategies for Conflict Resolution
1. When angry, separate yourself from the situation
and take time to cool out.
2. Attack the problem, not the person. Start with a compliment.
3. Communicate your feelings assertively, NOT aggressively.
Express them without blaming. Focus on the issue,
NOT your position about the issue.
4. Accept and respect that individual opinions may differ, don’t try
to force compliance, work to develop common agreement.
5. Do not review the situation as a competition, where one has to
win and one has to lose. Work toward a solution where both parties
can have some of their needs met.
6. Focus on areas of common interest and agreement, instead of
areas of disagreement and opposition.
7. NEVER jump to conclusions or make assumptions about what
another is feeling or thinking.
8. Listen without interrupting; ask for feedback if needed to assure
a clear understanding of the issue.
9. Remember, when only one person’s needs are satisfied in a
conflict, it is not resolved and will continue.
10. Forget the past and stay in the present. Build ‘power with’
NOT ‘power over’ others. Thank the person for listening.
December 2017 - January 2018
Management Magazine
14December 2017 - January 2018
Management Magazine
15Cover Story
Andrew Heycott,
Chief Executive Officer, Mabati Rolling Mills
December 2017 - January 2018
Management Magazine
16Cover Story
Building a STRONG
business, brick by brick
Mabati Rolling Mills (MRM) has been in business since 1961, ensuring they are at the
forefront of growth through innovation, technology and sustainability. ANDREW HEYCOTT,
Chief Executive Officer, talks to SAMMI NDERITU about their success journey.
1
. How has the recent elec- decision to expand our colour Kenyan standards and on this front
tioneering period in Kenya coating capacity. This was to provide we work closely with the authorities
affected your business? both greater diversity in product to achieve this. Ultimately this is
Have you had to re-organise solutions and also to encompass the beneficial to the consumer who ends
your operations to cushion yourself latest technology with a state of the up with a longer life roof.
from the current economic slow- art colour coating line from Korea, We are commited to keep our
down? who are recognised world leaders products at world class standards
in the field. With our new facility even when we see an increased
Like most manufacturers in we will continue to lead the way proliferation of substandard material
Kenya, we have experienced a through new products and solutions in the market.
challenging environment during for many years to come. We oficially The other key challenge is
2017 both due to the electioneering commissioned the line in December ensuring we can manufacture in a
but also other macro econominc 2016 and it is currently being cost competitive environment and
factors. We anticipated some ramped up to capacity. we encourage the government to
of these challenges during our continue its drive to improve power
3
planning processes and have had to . What are the major chal- availability and lower costs as well
manage the business accordingly. lenges that MRM is facing as continuing to drive infrastructure
We are extremely fortunate that our and how are you dealing development to improve and reduce
partners and Kenyan consumers with them? logistics costs.
have remained positive about the If you look globally, the rate of
4
future and in fact we have launched change is unprecedented. Be it . You have over 25 years
new products this year, opened markets, technology, urbanisation, in senior leadership roles
new service centres and ramped regulatory environments, product across Asia and Africa.
up our new colour coating line at solutions or competition. Coupled Where did you start in your
Mariakani. with this the consumer, through career journey and how did your
2
digitisation, is now demanding an previous jobs prepare you for this
. What informed the deci- experience as opposed to simply role as CEO?
sion in 2015 to embark on a product purchase. It is critical I’ve been in the steel industry all
the USD25 million (Sh2.5 that big businesses stay nimble, of my career, with Kenya now being
billion) colour-coating com- fast paced, flexible and capable of the ninth country. I started out in
plex at Mariakani and where has adapting quickly. Australia where the industry is quite
the project reached so far? Of course, business would not technologically advanced and I must
As the Kenyan and East African be exciting without challenges and say the standards in Kenya (and
building and construction markets our industry is no exception locally. especially at MRM) are comparable
develop and mature we have For MRM, it is paramount that we to the best in the world. Since then,
continued to see the consumer operate on a ‘level playing field’ I worked across Asia for 20 years
demanding greater product across the region when it comes to in senior roles prior to moving to
diversity and quality. This is competing products. This means Kenya with my family almost five
especially true of colour steel relevant authorities need to ensure years ago. The biggest challenge
roofing solutions and hence the imported products comply with for large and complex businesses
December 2017 - January 2018
Management Magazine
17Cover Story
these days is to stay nimble, flexible
and consistently improve value
propositions to meet future market
expectations. I believe having a
broad breadth of experience across
many countries and cultures gives
one a bettter understanding of this
need and the development needs of
our people.
5
. When you were appointed
into this position, what was
your first order of business?
What were the quick wins you need-
ed to realise within a short time?
I firmly believe the best time to
transform a company is before it
gets into trouble. Joining a market
leading company like MRM gave
me the opportunity to take a great
business and make it better. My first
order of business was understanding
the leadership capability within the
organisation and having the right
leaders, with the right skills in the
right positions. Once you have the
right team with an absolute focus
on the customer then a business
becomes unstoppable. In terms of
quick wins, I spent a lot of time
focusing on improving our customer
experience through better quality,
a broader product basket, a wider
geographic presence and a better
service experience. Having people
operate in a safe way and safe
environment is also key and a lot
of work was done to help people
realise they need to go home every
day in the same shape they came to
work.
A lot of focus has also been
placed on improving our cost base,
technology, internal operating
efficiencies and ultimately making
the business more ‘bullet proof’ and
therefore sustainable in the long
term.
6
. How would you describe
your leadership and man-
agement style? How do you
December 2017 - January 2018
Management Magazine
18Cover Story
encourage creative thinking within vision and their teams they may course is that people assume you
your organisation? become unstuck. I live by the mantra will always know the answer but we
I think my team would say I ‘never give up’ and young leaders are all human - no one can always
am tough but fair. I hold myself need to realise that it takes hard know the answer.
accountable every day for the work and resilience to be successful
12
successes and failures and try and in the current complex business . Outside your CEO role,
ensure through a robust vision environment. what are you passionate
that my lead team and in fact the about?
9
entire workforce are empowered . What advice would you give I care about animal welfare,
to deliver that vision. We operate someone going into a lead- education, environment, health,
in a relatively strong collaborative ership position for the first human rights and poverty
leadership environment time? alleviation. Having worked across
internally and I like to see people Listen. Remain focused, remain many countries where basic societal
continually challenged to reach passionate, have a dream, be needs are not always met I feel
their own potential but also to prepared to fail and of course compelled to try and improve
stretch themselves for their own never give up. Recogniye your own the lives of the less fortunate in
development. weaknesses so you can ensure you whatever small way I can. To
If you consider that successful can have the right people around this end, both personally and via
businesses will need to reinvent you to ‘bridge the gaps’. the Safal Group – MRM, we are
themselves every 3-5 years, then passionate about giving back to the
10
innovation and creativity are key . What are you doing communities in which we live and
traits to develop in the organisation. to ensure you continue operate. We operate four CSR pillars
growing and developing around health, education, shelter
as a leader? and the environment across Kenya.
7
. What characteristics do you We live in an age where In Mariakani we operate a fully
believe every leader should information is at our finger tips integrated medical centre treating
possess? so I spend a lot of time following, 40,000 patients per annum and a
The famous actress Lupita reading and learning from great technical training institute educating
Nyong’o said that “all dreams are global leaders. It is important that more than 600 students each year. I
valid” to which I agree, but a vision senior leaders have strong networks am involved closely with both and
without a plan and the right people and forums to share, learn and am extremely proud of what they
to execute it is simply a dream. bounce ideas. Feedback from my achieve in improving the lives of
Have ‘the dream’, have the right peers and young MRM leaders also young Kenyans.
people empowered and plans in keeps me on my toes.
13
place to deliver the dream and most . How do you want to
11
importantly communicate. Leaders . Tell us a few things be remembered when all
these days need to be tenacious, you like and dislike is said and done?
passionate, 1000 per cent focused, about your current We believe a business is built
thick skinned and most importantly position. ‘brick by brick’. I hope that the
flexible with an intuitive sense to Seeing young leaders develop bricks I lay will provide a strong
understand risk and reward. into confident senior seadership and resilient MRM with a talented
roles always excites me. We have a and dedicated leadership team to
8
. What behaviours or traits do fantastic talent pool here in Kenya thrive for many years to come.
you see derailing professionals and I really enjoy watching my
in their careers? management teams run the business
Knowing is the easy part but and address the challenges each Sammi Nderitu is a writer,
doing is the hard part. Many day. One of the challenges of senior photographer and digital media
young leaders are full of passion, leadership roles is making tough expert at KIM.
good ideas and confidence but if decisions and sometimes making
they don’t have the tenacity and those decisions can be emotionally Email: snderitu@kim.ac.ke
communication skills to drive their draining. The other challenge of
December 2017 - January 2018
Management Magazine
19The Big Idea
Thin line between
tax avoidance
and tax evasion
Think about the principal purpose of your commercial transactions to avoid being in
the taxman’s crosshairs
T
By robert waruiru
he difference evasion and avoidance, which are the seemingly ever expanding
between tax the cause of a major shortfall in tax grey area of “tax mitigation, tax
planning and revenues.” neutral schemes and aggressive tax
tax avoid- Tax evasion is criminal. You planning”. As early as 1985, India
ance is the have an obligation to pay your fair had experienced tax planning. In
thickness share of tax from profits. There are the McDowell and Co Ltd case, the
of a prison enough examples of tax evasion but Indian High Court frowned upon
wall. That is a one which fascinates me to date is aggressive tax planning saying “tax
quote attribut- that of Italy where taxpayers who planning should not degenerate into
ed to Denis own limited edition Ferraris and tax avoidance through subterfuges”.
Healey, a former Chancellor of Maseratis claim unemployment The EU appears to have a
the Exchequer speaking sometime benefits. shared view, often characterising
when aggressive tax avoidance was tax avoidance as pushing the
still fashionable. Tax revenues are Tax avoidance boundaries of aggressive tax
central to any government and it Tax avoidance on the other hand planning, which explains the EU
is easy to see why tax evasion has is legal. At least I used to think it support for the latest base erosion
taken centre stage today. Sample was the legal reduction of one’s and profit shifting initiatives. Yet,
this: the Rwanda Revenue Author- tax liability. A good example of despite all the hue and cry about tax
ity exceeded its 2016/17 revenue this is taking out an insurance planning, there is no doubt about a
collection target while the Tanzania policy and claiming the insurance taxpayer’s right to tax plan.
Revenue Authority marginally relief available under the Income The right to tax plan was asserted
missed its target. Tax Act. But Section 2 of the Tax by the US Court of Appeal in
The Kenya Revenue Authority Procedures Act, 2015, which defines Gregory vs Helvering (1928) in
missed its target by an eye lash tax avoidance as “a transaction or a which the court held that “Anyone
wide margin. Such sterling scheme designed to avoid liability may so arrange his affairs that his
performances viewed against ever to pay tax under any tax law” has taxes shall be as low as possible; he
increasing tax revenue targets challenged my earlier beliefs about is not bound to choose that pattern
bring to the fore the debate on tax avoidance. which will best pay the Treasury;
tax avoidance, a pet topic of the The difference between tax there is not even a patriotic duty to
European Union (EU) as it turns up avoidance and tax evasion is simple, increase one’s taxes.”
the heat on the “fight against tax right? Possibly. But that was before
December 2017 - January 2018
Management Magazine
20The Big Idea
The difference
between tax
planning and
tax avoidance is
the thickness of
a prison wall.”
Denis Healey
Gregory vs Helvering case and commercial rationale, the form
looks at the real reason behind a of the transaction is likely to be
The Ramsay Principle particular action or transaction. If it disregarded.
So how are countries responding to can be proven that the transaction Tax planning is a fluid and
the challenge of tax planning? Two is legal but only serves to lower ever-evolving concept. While it is
such responses are the enactment one’s tax liability, the court will difficult to define what tax planning
of General Anti Avoidance Rules disregard that action or transaction, is, avoiding being in the taxman’s
(GAAR) and enforcement of the however legal it may be. This is also crosshairs is a business imperative;
Principal Purpose Test (PPT). commonly referred to as the Ramsay being in the focus of the taxman
Despite the words “tax Principle, after the celebrated 1982 isn’t the cosiest of places to be.
avoidance” appearing eight times in case of Ramsay vs Inland Revenue Thinking about the principal
the Kenyan Tax Procedures Act, it Commissioner in which the highest purpose of your commercial
is not clear how the Commissioner court in the UK ruled that where transactions should be a good
will rule that a transaction is a a transaction is so arranged as starting point to avoid being in the
tax avoidance scheme. Given this to serve no other purpose other taxman’s sights.
lacuna, the PPT, should in my view, than to reduce the tax liability, the
be a critical consideration in any arrangement should be disregarded. Robert Waruiru is an Associate
transaction as this will likely be the One must always consider the Tax Director at KPMG Advisory
basis for a tax avoidance ruling by substance of the transaction and Services Ltd.
the Commissioner. this substance must tie back to Email: rwaruiru@kpmg.co.ke
The PPT, was first used in the commercial rationale. Without the
December 2017 - January 2018
Management Magazine
21Advertising Feature
OPI has helped us
improve performance
Gogni-Rajope Construction Company Ltd won two awards - the Corporate Citizenship
& Environmental Focus Award and the Productivity and Quality Award – at the 2017
COYA/SMOYA annual awards and they attribute this to hardwork and sytems.
D
By Murugi Ndwiga
uring Award. The awards are not by any has seen the company take up road
the 2017 way a mean achievement - years of construction projects across the
COYA/ hard work and putting the right sys- country and beyond the borders;
SMOYA tems in place have gone into putting the company has ongoing projects
annual the company at this position, asserts in the Republic of South Sudan
awards, Eng. Hannington Juma, the chief and has successfully executed
Gog- executive officer. projects funded by the World Food
ni-Ra- Gogni Rajope Construction Programme, Unicef and the United
jope Company was incorporated in Nations Office for Project Services
Con- 1993 but Eng. Juma and Eng. (UNOPS).
struction Company Ltd won two George Guya, also a director at the The company’s commendable
awards - the Corporate Citizenship company, joined forces in 2004 to output has put it in good standing
& Environmental Focus Award steer the company forward. with the Kenyan Ministry for
and the Productivity and Quality The transformation enacted since Transport, Infrastructure and
December 2017 - January 2018
Management Magazine
22Advertising Feature
They engaged a recruiting firm communities where their projects
to hire professionals who would run. To ensure the quality of their
manage the various functions within work, Juma says the development
the company. The input of the of Standard Operating Procedures
professionals would be fundamental (SOPs) for management of their
in taking the company to the next projects and regular audits has
level. improved productivity.
Their interest in embracing
the Organisational Performance What the future holds
Index (OPI) process in 2016 would “The award is just to show us
also leave a mark in their internal that we are improving but we want
processes and improve their output. to continue by putting systems
We started looking In 2013/2014, they had experienced into place which will help us into
around on how we delay from the government in profitability and production,” Juma
payment of certified works, which says.
could improve on led them to suspending some of He reveals that they have gone a
our management their projects. This made them look step further and had the company
structures and deeper into their internal systems to register for ISO 9001, 2015 which
that’s how we work a way out. he believes will catapult the firm
“We started looking around to the next stage. There are still
learnt of the OPI
on how we could improve on gaps in their systems that need
programme. We our management structures and more attention, like that of financial
decided it could that’s how we learnt of the OPI management system, and to this
be the right tool programme. We decided it could effect, implementation of Enterprise
be the right tool to help us assess Resource Planning (ERP) is in the
to help us assess
ourselves and improve on our pipeline.
ourselves and management,” says Juma. “We would want to gauge
improve on our “Based on the exposure we ourselves in terms of turnover,” says
management,” have gotten from this exercise, our Juma of the company’s future in
Hannington Juma. production has improved a lot. the next two years. The company’s
Despite the challenges of delayed turnover had reached Ksh 800
payment, we are still able to deliver million in 2012, but due to the
projects within a good framework,” challenges in 2013/2014, it dropped
Housing through the various says Juma. “We also take pride to KSh 300 million. Currently,
road agencies, which has helped in that whereas most of the local turnover is approximately KSh 500
it to grow and leave a mark in the contractors had to re-assign their million. “In two years, we would
construction industry. projects, we did not.” Handing over want to have gone to KSh 1 billion
of projects to a competitor is based per year.”
Better systems, better output on poor or non-performance mainly Juma confirms that the OPI
Both Juma and Guya are civil caused by the funding structure. process has benefited Gogni Rajope
engineers. They say when they The OPI process has seven and would readily recommend the
joined the company in 2004, determinants and in all, Juma process to other local companies
the management lacked proper believes the company has improved - especially to small and medium
structures. tremendously. A significant sized companies. “The OPI process
“We had to recruit qualified improvement is on their Corporate is quite vigorous and very useful.”
personnel, get the right equipment Citizenship programmes, like the
and come up with motivational education programme where they Murugi Ndwiga is the Sub Editor
programmes for the personnel support bright needy students in Management Magazine.
and chart out clear vision for the areas where they carry out projects.
company,” says Juma. They have also dug boreholes for Email:ndwigam@kim.ac.ke
December 2017 - January 2018
Management Magazine
23Advertising Feature
What it takes to
be the best
Twiga Chemical Industries emerged 2017 winner Company of the Year Awards as well
as taking home other trophies in Leadership & Management and Productivity & Quality.
Anantharaman Ramamurthy, the managing director, talks about what it takes to be a
great company.
W
By KAGENI MUSE
named Company of the Year 2017 in “We have five values which are
hat
the recent COYA/SMOYA Awards everywhere, even in our calendar.
makes
by the Kenya Institute of Manage- We put the customer in the middle.
an
ment. He says his organisation is a Around it we build people with
organ-
product of clear thinking from top tremendous professional abilities,
isation
to bottom, putting the customer in whether one is serving the customer
great?
the middle, collaboration, trust and or doing something in finance or the
Smart
positivity. technical department,” he says of the
strat-
“We have very clear thinking. values that have helped this company
egy? Inspirational leadership? The
And the thinking will be the same stay in existence for the last 68 years.
people who work there? Great
whether you talk to me or you talk The company, involved in the
customer service?Appropriate sys-
to somebody else. We are very sure distribution of crop protection, animal
tems?Anantharaman Ramamurthy
about what the role of each person health, consumer products and
is the managing director of Twiga
is,” says Ramamurthy. explosives won the Leadership and
Chemical Industries, which was
Management and Productivity and
December 2017 - January 2018
Management Magazine
24Advertising Feature
build trust with our customers, with and so much pride and joy.
other stakeholders like the regulators Positivity and being solution-
and with our employees and we oriented is also a key pillar that has
expect them to do the same thing. We contributed to the success of this
like them to be consistent too. You organisation.
cannot be saying one thing one day “It’s very easy for all of us to lapse
then after three days you are saying into negativity when we have some
something else,” he says. setbacks; we all have set backs,
His other tool of trade is individually and as a company.
collaboration and consultation among We remind ourselves all the time
staff and the leadership. through trainings to remain positive.
“We have structures in place that We spend a lot of time, energy,
ensure people work together. They money and effort on this. When we
It’s very easy
have to sit, talk, discuss, agree and encounter problems, we say don’t
for all of us then give responses to problems. We worry, let’s sit together and see what
to lapse into have a very collaborative form of is a good solution. Don’t get bogged
negativity when leadership; it takes time. I don’t make down with the problem,” he says.
decisions on my own. We will talk Ramamurthy says they took part
we have some
to each other and make sure all our in the OPI Excellence process as
setbacks; we all senior management are in agreement. an internal motivation to prove to
have setbacks, If top management is in sync, then themselves that they have what it
individually and there is no way anything can fail,” he takes. “In the process the world has
as a company. We says. seen it,” he says laughing.
Ramamurthy adds he is not afraid
remind ourselves
of spending two weeks or even a Technology for better output
all the time month convincing everybody that The future of the agrochemicals
through trainings something is good and getting industry as a whole is undergoing
to remain buy-in, but after this, the results are change with multinationals like
durable. Bayer merging with seed company
positive.”
As part of the OPI Excellence Monsanto and a general move
process that led to their win, towards biologically friendly
Quality awards. Ramamurthy took Ramamurthy says Twiga Chemicals chemicals. Twiga Chemicals,
home the first runner’s-up CEO’s has made a lot of improvement in Ramamurthy says, is aware of this
trophy while his Crop Protection and leadership and strategic management. reality and is working towards
Animal Health General Manager, They have set up three levels distributing seeds and bio-friendly
James Mwangi, won first runner’s-up of management that includes a chemicals to remain a viable company
award Manager of the Year. committee of directors, an executive into the future.
committee and a management He however says that the
Building a worthwhile brand council. government needs to come up with
Ramamurthy says the company “We realised that we can learn policies that recognise the fact that
works very hard to remain consistent a lot from this. We have changed the future of agriculture, farming
and reliable and in that way build the way we organise ourselves. We and feeding is in technology, not in
trust with customers. have a clear strategic plan, which traditional ways.
“Brands are nothing but a is documented and enunciated and “We have to wake up to that
repository of trust. If you buy a shared. Earlier it might have been reality.”
product that we have had for 25 on the minds of people but not on a
years, what you bought then is what piece of paper,” he says. Kageni Muse is the Sub Editor
you buy now- it works the same.” The firm has also improved its HR Management Magazine.
“We are not comfortable with processes, IT and marketing, resulting
people whom we can’t trust. We in a lot of enthusiasm among the staff Email: bmuse@kim.ac.ke
December 2017 - January 2018
Management Magazine
25Advertising Feature
Bringing new
thinking to clients
JOSEPH WARUINGI, Managing Director Advantech Consulting, talks about management
consulting, the growth of the firm and the services they offer.
M
By KAGENI MUSE
anage- eyes for an objective opinion on how and later with Advantech, a firm
ment you are running your business? Get he started in 2003 after he saw the
consul- a consultant. Need to make tough need for personalised management
tants are decisions without antagonising consulting services. He says a
becoming half your staff? Having too many consulting firm is able to provide
a key part projects spread across the globe and clients with services where they
of today’s need someone with the expertise lack the skills in-house to address a
busi- to manage them for you for the du- business challenge or where the client
ness culture and not without good ration they are running? Then you is pressed for time but needs results
reason. Do you need a particular might consider hiring a consultant. fast.
set of skills that are not available Joseph Waruingi has been in the “For all the organisations we offer
in-house without incurring the cost business for more than 20 years, first Strategic ICT Consulting, we start
of hiring a full time employee? Hire as an Associate Director at PwC in with business process mapping and
a consultant. Need a fresh pair of charge of Strategic ICT Consulting optimisation. This assists us and
December 2017 - January 2018
Management Magazine
26Advertising Feature
client to identify business processes despite the presence of the Big Many have complained about the
that are redundant, duplicated and Four for a long time. The firm was cost of hiring management consulting
those that require to be changed. successful within its first year to offer firms. How does Advantech price its
This is a consultative process to services to blue chip companies in services without outpricing itself with
ensure buy in by client staff. Business Kenya, government agencies and the SMES that are too in need of their
optimisation ensures inefficient and governments of Ethiopia, Zambia services? Joseph notes that SMEs are
redundant business processes are not Ghana and Eritrea. the bluechip companies of tomorrow
automated and hence businesses can “We stay on top of our game by and while they will encourage them
manage costs. We add value to our ensuring we offer cutting edge, to set aside an appropriate budget for
clients by bringing new thinking in relevant and practical advice to our the kind of value they will receive,
their sectors,” Joseph says. clients and maintaining constant Advantech is still keen on working
Having worked with many touch with them to anticipate their with small firms so as to build
different companies across Africa future needs and advise them. relationships and put a foot in the
and in many sectors, and with its Having skilled staff is paramount and door.
expansive network of experts across we put a lot of effort in up skilling “Pricing for consultancies is
the continent, Advantech is able to our staff.” dependent on what the client
provide a fresh perspective and quick Advantech started by offering perceives as value. We constantly
solutions. management consulting services analyse competition and their pricing
Investing in opportunities and as their list of clients grew, they models to ensure we are competitive.
Joseph says Advantech’s success begun offering additional services We focus on small-scale corporates
has proven that there is a space for like Monitoring and Evaluation for and entrepreneurs because we know
mid-sized niche consultancies in development partner projects across they will become big in the future.
management consulting in Kenya the social sectors of health, education We discount our service fee to them
and agriculture. They are now so as to invest in future business
operating in with an intent to grow relationships.”
this to 34 countries, especially in Advantech boasts of being a
Francophone Africa, by 2020. knowledge and learning organisation.
The firm also offers Supply Chain “Clients require demonstrable
Management services in projects in skills, knowledge and experience.
the health sector for pharmaceuticals We invest in the training of our staff.
and management of cold chains. We sponsor our staff to international
“Advantech’s business model is conferences and to work with our
to have our headquarters in Nairobi partner firms in Africa for learning.
and grow our service portfolio in We believe this helps us keep our
Africa through partnerships with skills and experience up to date and
local firms and individuals. Through helps with staff retention.”
international partnerships we are able Joseph says the firm is working
to get business opportunities that on an employee share ownership
are multi country and which require plan to entice workers to stay as
multi skilled consultants and we well as creating a positive learning
believe this model is sustainable for environment.
Business optimisation the foreseeable future,” Joseph says. “I lead from the front on all projects
ensures inefficient and “We are eyeing to build a pool of and coach our staff a lot. We have
experts across Europe and Asia too.” lunch hour meetings once a month
redundant business
where staff share experiences they
processes are not
Facing the challenges have had and can learn from each
automated and hence
A major challenge remains in the other.”
businesses can manage long cycles for getting new business Kageni Muse is the Sub Editor
costs.” especially government tenders, which Management Magazine.
has affected cash flows as has politics Email: bmuse@kim.ac.ke
and related conflicts in the continent.
December 2017 - January 2018
Management Magazine
27Advertising Feature
Promoting quality of
life made us win
Beta Healthcare won the Corporate Citizenship and Environmental Award during the
2017 COYA/SMOYA gala night. BOAZ KISERO talks to Dr. Sanjay Advani, Director and
Chief Executive Officer, about the achievement.
By boaz kisero
1. Beta Healthcare is respected for the production time using quality our product portfolio comprises of
great product quality. Some of your but affordable packaging material over 100 products, which include
brands like Action, Hedex and Mara and intense research to improve products manufactured at Beta
Moja have achieved Super Brand existing products. Healthcare’s facility and those from
status. What makes the company Our strong distribution and sales affiliate and partnering companies.
lead in pain management? network ensures that our products 2. Give a brief about your journey to
At Beta Healthcare, we combine reach the farthest kiosk and winning the Corporate Citizenship
cutting edge technology, stringent consumer. Through this, we receive and Environmental award during
quality control, state of the art customer feedback which is used the 2017 COYA/SMOYA gala night.
infrastructure and innovative as a tool to assess our quality of
research to create quality yet service and products as a continuous We are proud to say that Beta
affordable products. improvement strategy. Healthcare has won this award
As a company, we focus on reducing Besides pain management products, twice in a row and look forward to
December 2017 - January 2018
Management Magazine
28Advertising Feature
retaining this title next year. and safety; conservation of the corporate citizenship as a business
Our journey started long before we environment while the company model? How do you ensure that
began participation in the COYA makes a financial saving too. you promote higher standards
awards. In 2008, when Aspen Group, of living and quality of life for
a global pharmaceutical company 3. How has the OPI model affected the communities that surround
from South Africa, acquired your business processes, staff and you while still maintaining
ownership of Beta Healthcare, one of clients? profitability?
the major changes that occurred was Indeed, Beta Healthcare
the focus on safety and environment. The OPI model has helped us International is dedicated to social
We have a vibrant Department of evaluate our processes and responsibility in the communities
Environment, Safety and Health procedures vis a vis global we live and work. We have
Department with several policies standards, not only in Corporate adopted corporate citizenship
and strategies that ensure we Citizenship and Environmental as an organisational practice
do not cause adverse impact on areas but also in strategy execution, with emphasis on philanthropic
the environment. Further, we efficiency, staff satisfaction, customer practice all round the year. Some
proactively engage in projects satisfaction as well as resources of the initiatives taken are aimed
that impact on reduction of our utilisation. at conservation of wildlife and
carbon footprint, waste generation This model encourages continuous environment. This also applies
and management, fuel, water and evaluation and improvement in to activities towards children/
electricity consumption as well as all our operations. We believe elderly homes and “Beyond Zero”
setting up an effluent treatment that excellence is a journey, not campaigns. Other initiatives are
plant for the treatment of processed a destination and so we keep done purely on humanitarian
waste water before discharge. improving each time in our quest to grounds to assist those in need.
These measures result in attain excellence.
safeguarding the employees’ health 6. Where would you want to see
4. Beta Healthcare was competing Beta Healthcare in the next five
against some of the most respected years?
brands in this region. What made The business environment facing
you stand out in the Corporate the pharmaceutical industry
Citizenship and Environmental continues to evolve in Kenya and
Focus determinant? around the world. In the midst of
The answer lies on what the judges these changing conditions, we are
noted during the gala dinner. The determined to contribute to the
citation read; “This company has a enrichment of the quality of life,
Corporate Citizenship Policy and through the creation of innovative
Responsible Corporate Citizenship pharmaceuticals and through the
Philosophy. It has established provision of pharmaceuticals that
departments such as Human address diverse healthcare needs.
Resources, Safety-Health and Beta Healthcare is rapidly
Environment, Quality, Governance expanding in Africa. We want
and Legal Departments so as to to expand our product basket to
We have adopted realise the Corporate Citizenship cater for the communities we serve
and Environmental objectives. The while maintaining our quality and
corporate citizenship
company celebrates the recognition affordability; for our products to
as an organisational
of the international days pertaining reach very market they are needed
practice with emphasis
to Corporate Citizenship and throughout Africa and beyond.
on philanthropic Environmental matters.”
practice all round the Boaz Kisero is a marketer and
year. 5. Does the company actively writer at KIM
practice corporate conscience or Email: bkisero@kim.ac.ke
December 2017 - January 2018
Management Magazine
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