Welcome back after the break! When I came back from Africa, one of my colleagues at IESE told me: “Africa, you’re re-energized!” Indeed, I am. One of the energy shots came from meeting the CEO of a leading bank in Kenya and East Africa. His approach illustrates that thinking long-term pays off in Africa.
To the question “Why did the bank become international?,” the CEO’s answer included as a rationale: “To contribute to the socioeconomic transformation of Africa.” And he went on to explain his long-term approach to business in general, and to internationalization in particular. This is in sharp contrast to the short-termism that’s so prevalent among Western companies. And the best part of it is the conviction – backed by results – that by not focusing on profits, profits will come eventually.
To illustrate with one example: they entered South Sudan in 2006, when the country was starting to come out of the war. At the time, no bank was operating in the country. There was no governmental agency where to go and apply for a license to operate. They literally got it in the middle of a bush! At this time, the perspective of making profits in South Sudan was far in the horizon but the management team thought that ‘bankarization’ would contribute to the country’s transformation.
Their thinking is that they will see profits in the next 10-20 years, the time it will take for South Sudan to be at the level Uganda is. There are some other institutions which are setting up in the country now. However, because this bank has been there during the difficult times, they are the bank of choice and they have more than a 50% market share.
Is there any lesson to be learned here?