Success Lies in Bridging Gaps

Many needs in Africa go unmet not because the solution doesn’t exist or can’t be afforded. Rather, they go unmet because of bridgeable gaps: gaps between buyers and sellers; between governments and their constituents; and between companies and their communities. Business leaders succeeding in Africa close those gaps.

One of the most valuable gaps to close is the literal one, distance. Africa is a vast continent that is sparsely populated with people, infrastructure, and services. GE is adapting its product line to the realities of distance.

“We’ve developed V-scan, which is a handheld ultrasound, ” Jay Ireland explained as an example. “We’re working with nurse-midwives to help them understand the device and transmit the information back to the clinic via mobile coverage. The clinic and nurse-midwife can then consult and triage which mothers could deliver in a local birthing center and who should go to a more advanced facility. Now we’re adding a rugged little solar panel on the V-Scan so it can be charged anywhere.”

GE has also had commercial success closing the gap of distance by selling a battery adapted to power African mobile phone towers. “In developed markets you just plug the tower into the grid, ” Jay said. “Africa’s distances from the grid are a lot greater, so they’ve used diesel to power the towers. We adapted this battery from our locomotive division to do the same job. It cuts the tower’s use of diesel by 40 percent.”

There may be no sector in which distance has proven a more profitable gap to close than in banking. In Equity Bank’s early years under James Mwangi’s leadership, the company would drive armored trucks out to villages and set them up as mobile banks. More recently, Equity has developed an agency model for banking in which the customer-facing functions of the bank are handled by a local shop owner. James describes some of the impact on the customer, and on Equity Bank:

The agency is a clear symbol of our understanding the customer. This customer needs his money nearby because his life is unplanned. The cost of financial services is not the principal hindrance to this customer—the physical distance to the branches is. It’s the cost of surmounting that barrier. It’s the amount of time that one would take to go to where the bank is. It’s the amount of money that one would pay on public transport. We’ve been in existence for twenty-six years. The number of transactions done by branch banking in those twenty-six years has now been surpassed by the transactions done by the agents in just two years.

Equity uses agency banking to help close another gap: the gap between traditional and modern. “All the people of Equity, the people developing and delivering our product, are educated and modern, ” James said. “A bank, itself, is modern. Our customer is largely traditional. For the interface with our customer to be smooth, it must be accommodating. It must show compassion.” James describes how the agency model does that:

The rural customer found the bank very sophisticated. He was being intimidated by marble, granite, and glass cubicles. When he goes to the shop, he’s very familiar with the shopkeeper and the language of the shopkeeper. The bank is demystified. Savings is explained in a local language and context. Instead of calling it a bank, the shopkeeper says, “This is your granary of money.” They have granaries where they keep their maize and seed. I would never have made my way to how they introduce a bank as a granary. You can see that the shopkeeper demystifies the code, turning the banking language into the layman’s language.

The gap between traditional and formal economy is one that’s bridged profitably in many sectors. Just as Equity Bank helps people bring their money out of the mattress, SABMiller finds a market among Africans whose previous option was a satisfying but irregular and unstable home brew. Graham Mackay explains how his company meets that consumer on the first rung of the commercial beer market:

The bottom of the market in our game is informal alcohol, mostly home-brew. Nobody really knows for sure, but around 50 percent of all the alcohol consumed in Africa is informal, untaxed, and effectively home-brewed beer made from sorghum or other grains.^* Today, we’ve become the biggest commercial players in sorghum beer in Africa. Most sorghum beer is sold still fermenting. It’s alive and sold in containers that are vented to allow the pressure to escape. You sell it up until about five days, after which it starts to go off. It has a very, very short shelf life. We have recently introduced sorghum beer at a slightly higher price point, but with an arrested fermentation so it’s shelf-stable. We have also introduced other hybrid products, lager-type beers made with a high proportion of sorghum and cassava. Those are also attractive to lower-income-level consumers.

Graham reflected on low-income consumers and a relationship to the product that changes as the consumer earns more. “There’s a saying in business that a poor consumer doesn’t regard himself as poor, ” he said. “He regards himself as only temporarily strapped for funds. Our hope is that he stays with us on a chain up to our premium products.”

Graham’s foresight in closing gaps with the African consumer garners praise from Neville Isdell, who led Coca-Cola as chairman and CEO. Neville recalled that “Graham was criticized for the acquisitions he was making in Africa. People said there was no money there. Look at the business he’s built. He showed that if that demographic includes a whole lot of poor people, maybe you’re not going to sell too many Ferraris, but you can serve them profitably wherever they are in their level of consumer development.”

Sometimes the gap between provider and recipient is so big the product never even arrives. For years, the government of Nigeria provided up to $250 million in annual subsidies to some twenty million farmers to buy fertilizer. Ninety percent of the subsidy did not arrive, lost to a combination of mismanagement and misappropriation by various middlemen.

Ken Njoroge’s Cellulant was hired to close the gap between the subsidy and those twenty million farmers intended to receive it. Together with Cellulant cofounder Bolaji Akinboro, Ken had won a contract to develop a mobile payments solution that would put the fertilizer subsidy directly in the hands of the farmers (we’ll talk more about how that contract was won in chapter 6).

Working with the Nigerian Ministry of Agriculture, Cellulant developed a solution in which an accredited farmer receives a PIN sent to his phone, which carries with it a credit for the full subsidy. The recipient takes the PIN to any accredited agro distributor and can redeem its full value. Because proper fertilization has a multiplying effect on crop yields, the effect on farmer income is dramatic. By ensuring the full subsidy gets to the farmer, the system is expected to boost the average farmer’s income from $700 to $1, 800 over three to four seasons.⁸

Ken described both the project’s impact and the implications for future revenue for the farmer and for Cellulant. “By creating this structure we have given farmers a mobile wallet and begun them on the path of financial inclusion, ” Ken explained. “Their transaction history is there. They have sufficient data about what they’re growing, what they buy, etc. All that data helps the farmer plan, and will help a bank have confidence to lend.” It also creates for Cellulant a unique database with consumer insights on Africa’s most populous country. Ken is not shy about his ambitions for the e-wallet. “Over the last year, we’ve shifted government policy on the disbursement of fertilizer subsidies. There is no question that this is going to be the mechanism through which subsidy is given for every other thing in Nigeria in the next few years.”

Closing the gap to customers previously neglected by the market has very real benefits in terms of brand loyalty. What a brand or company can mean is transformed. Scangroup CEO Bharat Thakrar explained that “if you stop a European and ask him the brand that means the most to him he will tell you Apple, BMW, or Mercedes. For most consumers in Africa, it will be their cell phone operator.”

It is a stark contrast. Do you know many people in the United States or Europe who love their cell phone company? Everyone I know hates their cell phone company.

“The relationship is very simple, ” Bharat continued. “If you look at a mobile phone, they’re using that to send money, they’re using that to communicate as never before. They have a lot closer connection with the mobile companies because mobile companies are doing a lot more for them.”

Operating amidst need does not mean closing gaps only on the demand side. Successful business leaders in Africa also close gaps between their companies and suppliers. Aidan Heavey captures Tullow’s perspective after thirty years in Africa:

We take the view that where we find oil we can’t be just about producing oil. We have to make sure that the oil industry becomes a local industry, that the services that are supplied to us and others come from local companies or partnerships between local companies and foreign companies. Ghana is a great example. We set up a division to maximize the services we’re supplied by local companies, and to make sure that if international entities come in to serve us, they co-venture with local companies and build up the expertise locally. That way you can actually transform a whole economy.

In 2011 Tullow procured $120 million in goods and services locally in Ghana and Uganda, its two largest operations in Africa. As important, the company formally assesses the bids of its major global suppliers on the basis of their plans to build capabilities among Ghanaian firms. Tullow also invests in building those capabilities itself.

The global natural resource sector has not always covered itself in glory when it comes to building African economies. Today, however, these elements of national supplier development are becoming the norm among the oil, gas, and mining companies active in frontier markets, including Africa. Reporting of local supplier data still lags behind financial or health and safety reporting (which is strong in these sectors), but rising expectations will drive them to improvement in the future.

For Main One’s Funke Opeke, closing the gap with suppliers means catalyzing the digital content that she can deliver through her cable. She sees the development of those digital content suppliers as part of a broader effort to create an ecosystem of broadband applications that will drive her business:

We are the advocate for the growth of the Internet ecosystem in our countries. That means promoting local content and hosting and distribution of local content. We actively seek out Nigerian content writers to get them onto our network, because we think the more relevant local content we have, the more the user base grows and the higher the utilization we’re likely to experience. We’re also now looking at other value-added services that support the ecosystem. We’re opening the first major data centers in Nigeria, because they don’t exist today, and they make it more affordable for large-scale systems to be deployed here. If you have a facility that can offer data storage for a good price, then people don’t have to build their own, and we can stimulate a lot of content.

SABMiller also takes on leadership of a business ecosystem to close gaps between themselves, their suppliers, and government. It’s a model that engages SABMiller in roles it doesn’t play elsewhere, including that of a trade association. Graham Mackay explains:

The emerging markets are different in the sense that actions of individual companies are much higher profile and are proportionately more powerful. So we can change the course of the economy in Uganda or Zambia to an extent that we can’t possibly do in the U.K. or the U.S. Not only that, but the businesses we try to catalyze, like distribution and input farming, all of those exist already in the first world, and have their own representation with government.

To give you one example, we want to help a sorghum or barley farming sector or commercial cassava farming sector to develop. We not only have to do it ourselves, but then represent it to government, so that it gets a fair shake, gets the right resources allocated to it, and doesn’t get taxed out of existence. In the U.S., the barley farming business has its own representation in Washington. The same is even more true of downstream distribution, because you have the wholesale associations. They’re extremely powerful, and they paddle their own canoe. In the markets of Africa, we are the ones who have to be paddling.

The supply base in Africa is often fragmented, leading successful companies of all sizes to adapt their sourcing model without sacrificing their total cost of ownership. Both global agribusiness Olam and regional agribusiness Bidco engage in direct transactions with armies of small growers surrounding their plantations. Olam CEO Sunny Verghese explains that this is part of the commercial farming model of the future in Africa, as in other frontier markets:

I believe we will see two systems for commercial agriculture in the future. One is the large mechanized model in use today in North America, South America, and Australia. But if you look at India, China, or Africa, where agriculture contributes a big chunk of their GDP, it is not possible for the government to anticipate large-scale farming in the near term because so many people make their living off the land.

Our model in these places is a nucleus plantation where we do farming at world-class standards and get very high productivity. Around our nucleus farm, we maintain large outgrower programs. We provide all the agriculture input, including feeds, fertilizer, chemicals, pest control systems, and advice on planting density, etc. Just in that work, we were able to move rice farmers in Nigeria from one and a half tons to about three and a half or four tons per hectare. In our own plantation, we are getting about seven and a half tons. That is one crop and we are hoping, through better irrigation management, to get the farmers to produce two and a half crops a year. There is a green revolution still to happen in Africa that will transform productivity under the small holder farming system.

Strictly Business

There may be no more important gap to close than between company and community. I am sometimes reluctant to emphasize corporate social responsibility (CSR) and social investment when writing or speaking about Africa, out of concern that the entire continent will be immediately tagged as a charity case, and not really about business. Scangroup’s Bharat Thakrar expresses well the right context for social investments and closing the gap with communities in Africa:

Sales are driven and maintained in Africa by delivering public goods because often nobody else is doing it, because the government is not doing it. I was in one little village the other day and there was a concert being organized by one of the telco companies. The event was thoroughly branded: “We are bringing you this concert here, we are bringing you entertainment on a Saturday afternoon.” There is no public entertainment in that little village, no space to put it on or funding for the players. This company goes in, sets up a rig, and starts giving you some entertainment? You’re bound to find some relationship with the company because they’re doing that and nobody else is. When there is no water and a company comes and builds water pumps, you’re bound to feel that. When there’s a gap and you fill that gap, people remember. We see that when we go out to measure brands. It affects brand loyalty scores.

Olam sees social investment as necessary to securing its assets. Sunny Verghese is unambiguous (and unsentimental) in describing the realities of success in a frontier market:

For us, the big lesson that we have learned is that when you go into developing economies, it is always very easy to get a license from the government to operate in those markets, but it’s far tougher to get a license from the communities to operate. If you think that, because the government has given you a license, you can really go and operate in these places, you’re totally mistaken. Unless the communities where you’re operating believe that you’re going to be adding value to them, your potential to work in those countries is going to be severely limited. You might be there for two, three, four years, but you will be evicted eventually because the communities where you’re operating do not see the value. From a shareholder point of view, it makes so much sense because investing in farming, you need a long-term renewing asset. That is very valuable for my shareholders, but to get that, I need the community to see that I’m adding value, creating jobs, improving their livelihood, enhancing their income.

Sunny points out it’s not charity. Charity gets him in trouble with shareholders:

Shareholders get upset when you tell them that you want to devote X percent of your income for charitable donations. They will tell you that, “If you have surplus money, give it back to me in the form of dividends. My mother died of cancer and I’m more partial to cancer research.” But when you tell your shareholders that you’re engaging in a variety of developmental initiatives which have some reciprocal value for the company, there are no questions asked. The whole ecosystem is making your business model more sustainable and the shareholders are happy about that. The shareholder will invest when he sees the value for it, but he gets upset when you allocate some capital to sponsor an art exhibition or something to do with sports or something that is not related to your business.

Engagement in public goods can go too far. In the United States and England, the image of the company town is not a good one, and rightly so. Companies closing the gap with African communities struggle to get the balance right between their role and governments’ (roles that shift over time, and that are different in different locations). Aidan Heavey describes some of Tullow’s errors and the principles he draws from them:

When we started off, first in Senegal and then in Uganda, we were getting involved so heavily in the community we actually took over a lot of the responsibilities of government. We were basically seen as the supplier of schools and hospitals. We also built all the roads and all the infrastructure. Where you get heavily involved, you do become the government in some people’s views. You have to try and stop that. That’s where it’s helpful to be working with the government to make sure that these projects are seen as government-led. You may have helped fund them, but they have to be seen as government projects.

Of course, the answer goes beyond appearances to substance. The best cases I have seen of large-scale social investments have the following components: they are driven by demands in the community, not dreamed up in an office; they have a proven return on investment to the company (and one should not be shy about that—most of the governments and communities I’ve worked with expect it); and most social investments should have an exit strategy in which a government or local NGO is enabled to take over responsibility for the project. Those are pretty bare-bones principles, and nearly every large company would say that’s what they are doing. If you conduct field visits and audits of the social investments in Africa, however, you will find only the most successful companies are operating that way.

In Africa, as in most frontier markets, operating profitably and addressing the needs in the surrounding environment is essentially the same challenge. It is not a matter of parallel value or shared value, nor does it have to be measured on a double or triple bottom line. Meeting needs in Africa delivers to a long-term single bottom line.^*

Tony Elumelu captures this concept in a turn of phrase he coined that lends its name to this chapter. Africapitalism, as Tony defines it, is “an economic philosophy that embodies the private sector’s commitment to the economic transformation of Africa through long-term investments that create both economic prosperity and social wealth.” Most of the investments discussed in Success in Africa exhibit these characteristics. They have origins outside of any social mission, but are delivering social wealth because that is what works in Africa.

That reality is reflected in the way CEOs spend their time in Africa. In 2011 PricewaterhouseCoopers conducted a survey of CEOs around the world, asking about the role they saw for themselves in the coming year. African CEOs saw their role in much the same ways as CEOs elsewhere, with one area of divergence. Fully 75 percent of African CEOs planned an increased corporate commitment to poverty reduction. Globally that figure was 42 percent.⁹

Delivering what Tony Elumelu describes as social wealth, whether through product, supply chain, or social investment, insulates companies from a host of risks and opens opportunities in other parts of the world. Tullow has experienced this as it expanded across the continent. Aidan Heavey explains:

If you’re looking at investing in a big asset in a country, the biggest issue that you have is political risk. Political risk involves a huge number of issues. It’s taxation, it’s taking away of your assets, it’s whatever. Each of those risks is mitigated by the posture we’ve taken, because what you become is a very important citizen in that country. I think that is a good place to be. If you’re a big employer, if you have a lot of local companies working for you and you’re well respected as a company, you’re in a lot better place than somebody who isn’t.

Ken Njoroge’s Cellulant is clearly delivering social wealth through its work in Nigerian fertilizer, and in easing mobile payments across east Africa. It is equally true that Cellulant is rewarded profitably for that work and has laid the basis for future growth with the e-wallet.

First and foremost, Ken thinks about his business as a business. It is Cellulant itself, and the very act of starting it, that Ken feels delivers the greatest social value. “Listen, Africa is a continent with problems, ” he said. “I look at people who grew up where I grew up. They are desolate, living in poverty. It’s just unbelievable and doesn’t have to be the fate of people there. We hope that Cellulant is going to show that businesses can be founded out of no political connections and with no money.” Most of all, he’s keen to demonstrate that to his employees. As he discussed Cellulant’s impact with me, he peered past the thin glass partition of his office to a bullpen of young engineers. “I want them to see you don’t need to be the president’s cousin to make it. Ken and Bolaji are guys who came around starting with no money and built a successful business. That’s going to change the mind-sets of the twenty-something-year-olds out here. That’s what I want.”

While CEOs are looking at young African talent, emerging African talent is likewise looking at CEOs to see not only what they can pay but the social payoff they can deliver. One North African at Harvard Business School expressed her frustration with older models of African business, in words that resonated with her cohort:

Think about the biggest cement producers, for example. We were giving them subsidized utilities. When asked for environmental measures, they didn’t want to conform to it, because their business proposition wasn’t built that way. I don’t see that as replicable into the future. What I’ve seen post the revolution, is that there’s so much talent in health care, in education, in tech. We want to do away with the conventional industries and how they grew. We don’t want to keep selling out our country.

One of her classmates from Nigeria expressed it even more starkly when describing how he would assess business leaders in Africa:

I feel like we can look at a great CEO as someone who is very savvy at finding opportunities and building a company around it. Or we can look at a great CEO as someone who cares about what they are building from a developmental standpoint, not in terms of being a nonprofit but doing things that they believe would actually improve the quality of life of Africans. That’s the framework that I use when I assess a CEO.

A business leader who commands that respect is Main One’s CEO Funke Opeke. Here is how that same Harvard Business School student from Nigeria expressed it:

I feel anyone like Funke, who had the foresight to see that the next wave of development from Africa relies heavily on information flow, is admirable. To provide high-speed Internet and build the infrastructure that can convert that directly to mobile as opposed to desktops, that is the biggest accomplishment that I’ve seen in this whole period of African growth. Also, Main One is making concerted efforts at driving down prices to make sure that the bandwidth is within reach. Their goal is to get high-speed Internet to the average African in the next ten years, and I think that’s a very incredible thing.

Who doesn’t want the talent coming out of business schools to be saying that about her company?

Independently, Funke articulated the same passion for what her firm exists to do. In 2012, Main One embarked on a controversial and sometimes bitter battle to deliver broadband directly to users, bringing the company into direct competition with existing providers. I asked her the rationale for that decision, expecting a purely commercial response. “If we don’t ensure our cable is being effectively utilized, then we can’t recover the capital that we sank into the ocean. That is definitely true, ” she said. But then she continued at much greater depth:

We need Internet penetration to more people. I mean Internet penetration to schools, to young people, to small businesses, to be leveraged by government. With so much unemployment, young people in Nigeria are roaming the streets. Give them access to information, perhaps some of them might seek out knowledge that could actually help them acquire skills and become contributors to society. The Internet bridges so many gaps in advanced economies today and unless we start doing that here [in Nigeria], we will continue to remain disadvantaged. That’s what we set out to do and we have the bandwidth in the cable system to do it, but the people who need it are not getting it. The objective was to bridge that gap, so I guess we’re not successful until we bridge it.

Need is the context in which opportunity is pursued in Africa. For many companies, it is a barrier to entry, limiting them to a luxury niche. For the most successful firms, need is fertile ground in which to attract talent, innovate, and profit.

CHAPTER 5

What Wins

The grass is greener out here, but it’s not for the fainthearted.

Bharat Thakrar, CEO, Scangroup

Winning is hard everywhere, and there are as many paths to winning in Africa as there are individuals seeking to succeed. The business leaders I know succeeding in Africa share these traits:

• They embrace uncertainty

• They get their hands dirty

• They build what they need

• They’re resilient

• They tailor to local culture

None of these attributes is particular to success only in Africa or frontier markets. They do rise above the throng of characteristics associated with successful people everywhere, such as “hard work.” Certainly, hard work is key to success, but no more so in Burundi than the Bronx. The ability to embrace uncertainty matters much more in Burundi than it does in the Bronx.

They Embrace Uncertainty

Business leaders everywhere manage risk. Though executives often talk about them interchangeably, it’s useful to distinguish risk from uncertainty. Risk is a known set of possible outcomes, with a known probability for each. Rolling dice has risk. Uncertainty is an unknown set of outcomes, with an unknown probability for each. Doing business in Africa is uncertain.

For many companies, operating in Africa or other frontier markets may actually be a way to mitigate risk. To take just one example, Graham Mackay sees SABMiller’s presence in many African countries as a dispersion of risk. “Things happen country by country, ” he explained. “Taxes go up and down or there is a sudden huge rise in interest rates because the country is overextended. There are policy and economic vicissitudes that you inevitably encounter. The point I would make about Africa and our businesses in Africa is that it helps to have a broad portfolio of many countries.”

Uncertainty, by contrast, uncertainty isn’t mitigated in advance so much as managed well in real time. The constant need for workarounds, replanning, and accommodation in Africa can be astonishing to the uninitiated. In fact, even experience with uncertainty or tolerance for it isn’t really sufficient. Experience means uncertainty won’t surprise you—it will just frustrate and exhaust you. To really succeed in the face of that steady drumbeat of uncertainty in Africa or any frontier market, you have to embrace it.

Ken Njoroge embraces uncertainty. His career and the birth of Cellulant were predicated on a massive step into the unknown. In his mid-twenties, Ken was already a partner in 3Mice, an IT professional services company. Ken explained that it was profitable and growing, if not explosively:

We were doing fine, but my billion-dollar-scale ambition was always there. At 3Mice, I began to spend a lot of time on one project, developing new solutions for mobile phones. We didn’t have a client on the project. It was internal, and it was losing money, but I could see the scale of growth of African mobile. My partners were comfortable with what we were doing already. They had families and couldn’t take a big risk. But for me the greater risk was continuing at that modest level. So, in the end I said, “Listen, I will work just on this one unfinanced project, take it out on my own, and leave you with the money-making part of the business.” I gave up my shares in 3Mice and I exited the business.

Jeff Immelt considers a certain level of uncertainty par for the course in fast growth markets. Raised in Ohio by a schoolteacher and a GE division manager, Jeff played football at Finneytown High, “never traveled overseas growing up, and never imagined I would be dealing with Africa.” That expectation notwithstanding, Jeff has managed businesses in fast growth markets around the world, and had recently returned from Africa when we first spoke at GE headquarters. Jeff’s comfort in frontier markets is palpable, borne of three decades as a GE executive, including twelve years as CEO during which time the company has dramatically expanded its presence in developing Asia, and more recently Africa. He described an occasion when his perspective on uncertainty was brought to the fore:

We were building a joint venture in Angola, and we were stuck in negotiation with our local partner over who owned the land. That issue had delayed consummating our transaction for over a year. Our partner was frustrated, we were frustrated. Now, I’m an old global hand and I’ve seen how markets form so I have a broader risk tolerance than most. I said to our people, “Listen the opportunities in this country are great, so let’s just figure out the risk, and let’s go.” If you insist on waiting until everything is understood, you will never go. Companies don’t do well in Africa because they can never get started. And there’s a thousand ways not to get started.

Figure 5–1: The Mara Crossing

Source: Eric Inafuku, provided to Wikimedia Commons, August 30 2007.

Jeff’s experience is consistent with Bharat Thakrar’s perspective based on building Scangroup and observing both African and global clients operating on the continent. Bharat explained by way of the following metaphor: ^*

I don’t know if you know the Mara Crossing? It really describes this very clearly. We have the Mara River that divides the Serengeti. In August, the weather kills the grass on the Tanzanian side. On the Kenyan side it stays green. So the wildebeests migrate in the thousands towards the Kenyan side where the grass is greener, but they have to cross the Mara River and that river is full of crocodiles. They don’t know where the crocodiles are. But they cross, to get to the green.

Bharat paused, as if standing on the other side. “The grass is greener out here, ” he said, “but you have to face the unknown. Africa is not for the fainthearted, and it’s not for people who are uncomfortable with the unknown.”

Few non-Africans have had as much success in Africa in the last decade as Aidan Heavey of Tullow Oil. Aidan founded Tullow with his own funds, and it has grown into one of the most successful natural resource exploration companies in the world, with $2.3 billion in revenues and a market capitalization in excess of twenty billion dollars. Aidan’s the kind of fellow who wouldn’t just cross the Mara, he’d be the lead wildebeest leaping into it. This impulse is captured in the way he describes his decision to start Tullow:

My first trip to Africa was to Senegal to look at an oil project. I’d never been to the continent before. When I came down I had no idea what to expect, my images of Africa just being documentaries about wildlife. I was pretty ignorant, I would say. When I went down there to Senegal to start, I just found the place fascinating. From the second I arrived, all the way through, it was amazing. The thought of actually having a business here was like being on holiday all the time, great.

Back in those days, you arrived at the airport and it was a bit intimidating because it wasn’t like arriving in London or New York. The whole atmosphere was so different from what you’d see in Europe. It wasn’t like business that I had seen before. It was a bit of excitement there and the people had fresh minds, everything was open. People were offering fresh ideas.

Of course, it was virtually impossible to raise money. Here was a guy who knew nothing about the oil industry from a country that knew nothing about the oil industry, going to a country that had no oil industry to set up an oil company. At the start, it was just a matter of getting the project as far advanced as I could, using my own cash. When I got it to a certain stage, I brought in family and friends. Even they weren’t investing in the project; they just invested in me. Then it just worked out quite well.

The ability to embrace uncertainty exists not just in CEOs, of course. A manager who can respond to uncertainty is critical to leading a frontier market operation. I asked Graham Mackay to explain what allows a company like SABMiller to operate profitably in the most uncertain markets, like South Sudan. “Well, that’s really tough to put your finger on, ” he said. After a moment’s thought, he concluded that it’s this same capacity to handle the unexpected:

There is a sort of self-reliance and a willingness to take things as they come, just to take what the environment deals out to you. You mentioned South Sudan. The chap we’ve got running South Sudan is an old Africa hand, and he gets called down regularly to pull cobras out of the empty cases coming back. The cobras like coiling up in the empty boxes. The warehousemen are all terrified of snakes and won’t go anywhere near them, so he winds up as the snake man.

I hope to import that training technique shortly.

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