Last week I had the opportunity to moderate a panel on “How companies need to rethink growth in emerging markets.” Panel members were stellar, all members of IESE’s International Advisory Board (IAB). While four of them work for and/or seat on Boards of Western companies, Ibukun Awosika is founder and CEO of a Nigerian company: The Chair Center Group, and Chairperson of the First Bank of Nigeria.
I asked Ibukun to share her views on how companies can tap best the opportunities that emerging markets presents. Her insights resonated with ideas that underlie some of my posts in this blog (the points below are hers; their elaboration is my own):
- Partnerships: looking for a local partner to create some type of alliance is a natural way to enter these markets. A local partner provides the local knowledge and connections that you lack. Else, you start at a disadvantage.
- You need to have local management: this isn’t just about how expensive expats are. It’s about understanding the local context, and being perceived as such by customers and other stakeholders involved. We have to keep in mind the diversity across African countries – same as in other continents. It’s not enough to have “Africans” on board: you need people from the country you are operating in.
- Be careful with official statistics! They don’t capture a truthful picture of reality because they miss an important part of it: the informal economy. To bridge the gap, you need to go to the country you’re thinking of and see it by yourself. Applying “the toothpick test” will help you calibrate the size of the opportunities – if you wonder what “the toothpick test” is, have a look at an earlier post on the informal economy.
Other ideas shared by the panelists included the need to have a long term perspective, and to be flexible – again, ideas that underlie this blog.
Overall, the tone of the panel was one of optimism – not only in relation to Africa but to emerging markets in general. For a synthesis of the discussion, read here.
Do you agree to these points?