The answer’s not simple when we’re not talking about a dance television show. At the moment, emerging African markets are frequently being touted as the solution to the current financial crisis. If companies can just ‘crack’ Africa, then they can turn themselves around and sail on with a profit-making wake behind them.
But it’s just possible that Africa doesn’t crack that easily, and that this time around countries won’t be so quick to play the aid-for-trade game. Those companies looking for a quick fix through exploitative behaviour are not those companies that will prosper through expansion into Africa.
What will count is investment in people, and a commitment to doing things properly. And many African countries are ensuring that investment and commitment through legislation.
African leadership models
Currently there are predominantly two models of top company leadership in Africa. The first type of leader is a thoroughly African entrepreneur, who has built up a business on the continent through hard work, shrewd negotiation and exploiting an extensive network. These players, among which we can number such entities as Oando, the largest Nigerian-owned oil company, rely heavily on the talent of a single individual.
The second model is the expat model. Companies wanting to ‘expand into Africa’ establish a base in one or more African countries and bring in an expatriate who has company or industry experience, but no local knowledge or context.
The problem with both these models is that they are short-term and do not cater for succession planning. In the case of the entrepreneurial leader, it is very rare that those same leaders who are so skilled at creating an effective business also have a talent for developing and nurturing a skilled management team, from which a successor may be chosen.
In the case of the expat, it may actually work against their own interests to create a succession plan – should an expatriate successfully transfer leadership skills to a local person, they have then worked themselves out of a job – and re-integration once you have been on the expat circuit is another whole can of worms, to be explored in a different column.
Furthermore, increasingly, and rightly, countries in Africa are limiting expat workers, either through insisting on a certain number of locals being employed or through only offering time-limited work permits for expatriates.
Manage and plan talent for success
In my day-to-day work at Mindcor, I am repeatedly reminded that those companies which are successful in business are those companies which are successful in managing and planning their talent. And by talent here I mean not just CEOs and top leadership, but also middle management and highly skilled artisans such as welders and machine fitters.
The first step to success is the recognition that each individual country in Africa needs a bespoke approach – there is no one shoe that fits all local challenges.
For instance, you are a global financial services company and you want to establish offices in Africa. You begin with Tanzania, where you realise you need actuaries. The thing is, in Tanzania there is no actuarial programme – the university doesn’t teach it.
No problem – you’ll headhunt someone from another financial company already in the country. This solves two problems: you get someone with the requisite intellectual capital, and also someone with local knowledge.
Quite apart from the fact that in the long run you are robbing Peter to pay Paul, as sooner or later your competitors will simply poach your top talent back, what you haven’t done is thought about any long-term sustainability for your venture.
Sure, if you just want to get in quickly and see yourselves as leaving again in five years, this is a viable option. But I doubt that any company thinks that way.
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Real investment for real rewards
If you want to make a sustainable investment in Africa that will reward you with handsome profits, you have to factor in the cost of talent acquisition, talent development and talent retention.
You must create the capacity, either internally or through employing a skilled external agency, to not only put the necessary bums in the necessary seats in the present moment, but also to assess, project, strategise and effect a programme that will create those necessary bums in seats in the longer term.
If the company knows that it needs actuaries, and it equally knows that the country in which it is operating doesn’t have actuarial training capacity, it makes perfect sense to negotiate with governments and universities to create such a programme – and sponsoring its existence can only increase its employee brand, ensuring that it will benefit from being able to recruit the top talent.
These are lengthy and complicated negotiations, for long-term rewards, but it’s certainly worth factoring their necessity into your human resources strategy.
Another factor to consider is local knowledge. Again, the necessary skilled people in the short term may be easy enough to come by, albeit more expensive once you have factored in relocation costs and expat allowances, but will they be able to do the job? Not in terms of their skills set, but in terms of their local knowledge and cultural flexibility.
Local knowledge goes a long way
Does an international company’s HR department have, or even want to have, the necessary local knowledge of which individuals from which ethnic background in Nigeria can or can’t work together?
Do they want to have to keep abreast of border disputes between the Democratic Republic of Congo, Uganda, Rwanda and Burundi, so as to know when the rumbling diplomatic discussions about who exactly owns the border mines are likely to flare up into physical violence, and what side each employee is likely to be on?
Will the skilled expatriates whom an HR director based on another continent has headhunted prove so bad at managing the local labour force that they strike, causing the company to miss delivery deadlines and face massive penalty payments?
All these are real possibilities caused by the failure to assess local conditions and realise that, as in marketing and trading, talent management in Africa also requires solutions carefully tailored to local conditions and legal requirements.
In short, companies that do not take an holistic view of talent management and talent development will shortly discover that, while Africa may have talent, they have no talent for making it in Africa.