“I’ve seen it so often,” says Neville Isdell of Coca-Cola: a company identifies an opportunity in Africa, sends all its expatriates, recreating what they have at home, and manages everything from its European headquarters. It’s expensive, because of salaries, travel, etc. But most of all, it’s expensive because it doesn’t work.”

Neville knows what works. From 2004 to 2008, he was CEO of Coca-Cola and oversaw a spectacular rebranding of the company globally. After spending his entire career in the company, Neville retired in 2001; the company called him back in 2004 to become CEO and help correct its course. In 2008, he was named CEO of the year for the beverage sector by Beverage Industry magazine.

Neville knows Africa. He was raised in Zambia from the age of 10, studied at the University of Cape Town in South Africa, then returned to Zambia and started working for Coca-Cola’s local bottling plant at the age of 23. He grew up within the Coca-Cola family, taking over the leadership of Coca-Cola’s large South African subsidiary eight years later, before holding various management positions around the world. Neville says that coming from this region played a central role in Coca-Cola’s success in frontier markets, made possible by the model of local bottler franchises.

“We always find wonderful exceptions, but generally expatriates either don’t know enough or don’t understand enough about the local culture and how society really works to find the right way to do things. This is where Coca-Cola’s bottler model has proved so valuable and adapted to Africa, because it takes good African leadership and good African partners to succeed.”

While Coca-Cola’s economic model has proven well-suited to developing a local presence, things are different for an oil multinational like Tullow. Aidan Heavey believes that starting Tullow from scratch in Senegal was a decisive advantage, as they didn’t copy wrong approaches and assessments:

“When we started working with Senegalese, we had no fixed idea of how to do things because we were a young company. We were as much novices as they were. We set up a Senegalese company, which was really designed to operate in this country. It was a winning strategy. We hired Senegalese, negotiated contracts in the Senegalese way. Their way of thinking was completely different from ours. The logic was different and you had to think a little differently, but you always got the solution you needed. At the time, I explained to people that it was like in the 1980s, where if you had a big IBM mainframe, you couldn’t make it work with a Mac. If you had an Irish company, you couldn’t imagine making it work in Senegal. You had to see things like that.”

Of course, not all CEOs adopt this tabula rasa model. Most will want to integrate their culture and existing activities into the local situation. For this integration to be fruitful, it is necessary to recruit, train, and listen to local talents. Mohamed El Kettani describes how Attijariwafa Bank does it:

“We don’t want to be a Moroccan bank in Congo or Gabon, and that’s not what people there want. In Congo or Gabon, you want to be a Congolese or Gabonese bank. The key is the human factor. We are fortunate that there are always tens of thousands of sub-Saharan students coming to study in Morocco in our engineering or business schools. We recruit extensively from this population. We identify the best, then send them for a two-year program at our headquarters in Casablanca. After that, we send them to local subsidiaries. They are always the best ambassadors for the bank in their country.”

Bharat Thakrar also emphasizes the importance of human capital for successful integration in different regions. In the case of Scangroup, the human resources strategy has focused more on a lateral movement of employees. In 2011, Scangroup acquired Ogilvy Africa, doubling its size and shifting its center of gravity well west of its origin, Nairobi. This acquisition also marked the company’s deepest foray into Francophone Africa to date. Bharat is optimistic about the prospects but acknowledges that it will take time and vigilance: (…)

This text is an excerpt from the book “These Businesses that Succeed in Africa” written by Jonathan Berman.

We invite you to read the following article “MAKE A LONG-TERM COMMITMENT“.


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