Safaricom, the largest, (acknowledged) most profitable company in Kenya returned a profit of Kshs 17 billion ($250 million) for the year ended in March 2007 - 40% better than the year before. The Kenya Alliance of Resident Associations (KARA) sought to know the secret of its success from its CEO, Mr. Michael Joseph.
Q: Your firm has just returned a record regional pre-tax margin of Ksh 17 billion. Just what makes good managers such as you?
A. From my perspective, a good manager makes commitments that he or she will keep both to his colleagues and to the business. This means paying close attention to deadlines, information flow to colleagues, suppliers, timelines and other parties required for the job. The bottom line is ensuring quality and timeliness of service. I believe in this wisdom.
Q. Why do you think you are ahead of the rest?
A. Without personalizing anything, I believe a good manager is one who is proactive and not reactive. Unfortunately, many of us allow events to dictate our business outcomes. On the contrary, we must manage events well in order to control the outcome. One must take full responsibility and ownership. You cannot as a manager, for example, say that because your suppliers won't meet the deadlines, you will equally be late in delivery. You must manage the process in order to meet the original commitment dates.
Q. Some people argue that your success is a result of being in the right place at the right time.
A. We are not where we are by chance. We have a thorough financial planning and forecasting process. We keep re-evaluating our business, KPI's and the operating environment. This ensures that we are well positioned to meet all our operational and financial targets. For instance we knew between 3-4 months earlier that we could return the current margins.
At Safaricom Ltd, we feel our success is pegged on introducing the right products at the right price. The timing of the introduction of new services is carefully planned to meet certain objectives. More so, we have put in place the right environment to attract more subscribers as evidenced by our massive investment in our customer-care services.
Another issue is focus and good management of time. I hardly sit on any committee or board of any institution. I dedicate my time to my work. Moving from 17,000 to the current 6.8 million subscribers does not come by chance. It is only by well-thought planning. We do a lot of that here. We are keen on maximizing return on our investments.
Q. How far and fast are you driven by competition?
A. Competition is healthy and, in fact, helps drive the business. Although it sometimes puts pressure on our people, it offers an incentive for us to do better in every field.
Q. What do you envisage of Safaricom Ltd after the Initial Public Offer (IPO) and in terms of exceeding the current profits
A. After the IPO, our shareholders base will certainly be bigger, we will become a more Kenyan institution, be stronger and more accountable to a wider stakeholder base. On profits, I see the company continuing to grow. As we come under pressure by additional and stronger competition, I foresee the rate of growth in both profits and subscriber numbers progressively slowing down towards the middle of the next year. Note, I say rate of growth!
I must hasten to add that our profitability will not come down. In terms of market leadership, we will certainly remain what we are currently. I would wish to guide the company through that process and hopefully leave a stronger legacy.
Q. There is talk on "secret" Safaricom Ltd shareholders. What is the issue really?
A. All I know is that the shareholders of the company I work for are Government of Kenya and Vodafone Kenya. Period. It is really not within my calling to enumerate all the shareholders (including any possible nominee ones).
Q. What will you want to be after your colorful stint as Safaricom Ltd CEO?
A. I do not really know at this stage but I expect I will not be in full time employment. I hope to assist and sit on the boards of institutions that will interest me then.
First appeared in The KARA Weekly Newsletter Issue No. 126, July 2007