They Get Their Hands Dirty

For many businesspeople from mature markets, frontier markets are exciting. They’re also scary. As a result, executives of U.S., European, Japanese, and even Korean companies tend to stay at a safe distance. In their work and especially in their social lives, they often set up pockets or channels of isolation. It’s comfortable, but from a commercial standpoint, it’s a death knell in Africa.

You need to get your hands dirty to understand the market, precisely because it’s so different from your own, and because your assumptions won’t work. Bharat Thakrar commented on this behavior. “The other day, ” he said, “we had a Chinese phone manufacturer in the office and, I asked them, ‘Where is your office in Nairobi? ’ They told me it’s in Luthuli Avenue.” Luthuli Avenue is where phones and other electronics are sold at retail, in a riot of shops both formal and informal. Bharat went on, “If you ask one of the other larger phone companies where their office is, it’s probably in a nice urban area. These guys (the Chinese) are sitting where their market is sitting. That is the strategy you need in Africa.” He continued:

You cannot do this thing of sitting in a board room, developing these plans, bringing expatriates to run the marketing for you or the distribution, who have no understanding of the dynamics. They put their kids in fancy international schools, have some fancy international lifestyle. You’ve got to go out there and find out what the hell is going on.

When Chris Kirubi invests, he knows what’s going on. Chris has been named by Forbes as among the twenty most influential business leaders in Africa, and it would be easy to mistake him as a man above the fray. He owns an iconic building in the center of Nairobi, International House, known to all by name alone. When a visitor arrives to see him, the security desk picks up a particular phone and announces, “A guest for the Chairman.” Upon entering International House, that is the universal term for Chris Kirubi. The Chairman is coming. The Chairman is in. And once he arrives (in bespoke suit, shirt, and shades)... the Chairman will see you now.

But it would be a mistake to let all that fool you. I asked Chris once if there were any mistakes he made in his life. “Sure, ” he said, “I was born poor. That’s actually quite a mistake: to have to fight to get out of poverty, to support myself, support my relatives, support other people. But when you learn how to get out of it, it’s the biggest and the sweetest challenge. If I were born rich, there would be no excitement to remaining rich.” Though he could just watch his investments, Chris explained that he prefers his hands dirty:

I always tell my people I’m not a mushroom. A mushroom, you keep in the dark and you feed it dung. I’m not one of those. So in all my businesses, I know as much as my managing directors. Sometimes more, because I talk directly to the ordinary guy. I don’t go through liaisons or bureaucrats. I work with the smallest person in our business.

That is the thinking that Chris brought to the microphones of CapitalFM, a popular radio station he bought in 1998 and where he promptly installed himself as a mid-morning disc jockey. He explained why:

That’s the lowest level you can be, a DJ. You talk directly to the listener. So if I understand the DJ’s issues, what can a managing director know better than me? So I go every day and get on the air. You see, when I first bought the business I found I couldn’t contribute to my business. I didn’t know the feel of the audience. I didn’t know their demand. I didn’t know the pressure on those who present programs and every time I told them, “Do something, ” they told me, “You can’t do it that way.” The only way to understand, to know it so that you are not an outsider, is to be part of it. Now, nobody can tell me about radio. I know it inside out. I don’t like to be a mushroom.

Centum’s James Mworia suggested to me that this phenomenon of business leaders getting their hands dirty is not only essential to success, it redefines the role of private equity firms like his. “A great CEO in Africa, ” he explained, “is deeply engaged in the operations of the business, he has to be to make the company run. That is the CEO we look for. It means that the financial engineering, the investor relations, and even the strategic planning, are tasks that we take on when we invest. That is the division of talent that makes sense in Africa. Today, if we see an African CEO who is very charismatic, and good with investors, but is not deeply engaged in the operations, that is a CEO from whom we would shy away.”

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