SUNDAY AKINTOLA: HOW MUSHIN HOME BOY GREW MULTI-MILLION NAIRA BUSINESSES IN MUSHIN, LAGOS

SUNDAY AKINTOLA is specially proud of beating all the odds as a home boy growing up in the densely populated Mushin area of Lagos State to become a successful owner of business chains that span micro finance and telecommunications. In this interview with GOKE OLUWOLE, and TAI ADEWALE SHOFELA, Chairman of Sovereign Micro Finance Bank, AKINTOLA shares his journey to conquering the litany of challenges that littered his path to business success.

How would you describe yourself?

Yes, by His grace, I am Sunday Akintola, a gentleman who happens to be one of the lucky entrepreneurs whose company is positively impacting on Nigeria in the area of poverty alleviation. I am the Chairman of the Board of three companies; Covenant Perazim Investment Limited, a multi-facetted company established to operate in the Oil, Gas and Agriculture sectors, Sufi Enterprises Limited, which is a company involved in the sale and distribution of GSM companies recharge cards, and Sovereign Micro-Finance Bank. I am a graduate of Accounting from the University of Lagos. I am also an ex-banker having worked with one of Nigeria’s fastest growing banks Zenith Bank Plc.

Briefly, can you tell us the background to how you grew this multi million naira business empire?

Most big businesses always start in small ways. This multi-million business concern, like you rightly said, is a business that was registered first as Covenant Perazim Investment Limited in November, 2003 while I was still in service with Zenith Bank. It was then the thought occurred to me on what I could do to change my life and touch the lives of other people around me. I thereafter initiated the venture, but we started operation with four staff which included my wife and my brother in-law in a shop here in Mushin from where we sold telecoms recharge cards.

I resigned from my banking job six months after we commenced operations, to be precise, July 1, 2004, two days after securing the NCC dealership licence. In fact, I got my licence on a Sunday and I put in my resignation the following Tuesday, and by August, 2004, I was already able to raise the mandatory N5 million to join the recharge card dealership community of the then V-Mobile Network with Sufi Enterprises Ltd.

All these while, my colleagues, some in the banking halls and some from other companies like Chevron, Exxon-Mobil and other multi-nationals, were greatly disturbed about my decision to go into business; they asked if something was wrong with me and how could I leave certainty for uncertainty; leaving the bank to go and sell recharge card. For them, it sounded absurd. But I told them I wanted to go and develop my business.

Things started to crystallize for us because all we were doing then was to get some money to buy and sell recharge cards until we had our breakthrough when in 2006 the V-Mobile Network started seeing us as a serious business entity, and in 2007, we won the best dealers award of the V-Mobile Network. That same 2007, we were among the 25 dealers selected in Lagos and promoted to the status of big dealers. However, as part of the requirements of that new status back then, we were also expected to have our own building as office complex. On the back of this, we decided to build our own building. Thankfully, by the end of 2007 we were able to build our own office complex.

Personally, how had your background influenced the development of your business?

I am a proper Mushin boy, born and bred in this community where people have the notion that nothing good can come out of the community. While we were in the secondary school, those of us from Mushin were seen as boys from homes of hooligans and thugs but to God be the glory, we came out very disciplined, because I am fortunate to have very responsible parents who gave us good up bringing.

Can you believe that as far back as 1963, my Dad refused all discouragement from others not to send my elder sister to school; he sent her to the only private boarding school then in Abeokuta, the Baptist Private School, Idi-Aba, Abeokuta. People were laughing at our parents for sending my sister to the boarding school. Ironically, I had to attend a public school, Odo Abore Primary School in Mushin. I guess my brilliance then impressed the school management such that they made me the school’s senior prefect.

After finishing at Odo Abore, my parents preferred that I schooled out of Lagos State, they rejected my preference for the Nigerian Model College at Idi-Oro, a suburb of Mushin. They sent me to Baptist High School, Saki, in Oyo State. From Saki I proceed to the Lagos State College of Education, and later, to the University of Lagos where I studied Accounting. I also taught in a primary school for two years before I joined Zenith Bank in 1993 where I spent 11 years before quitting in 2004.

Though my parents were not rich, I remember that they always struggled to pay our school fees then. They thought us about God and, my mother, especially, taught us the principle of prudence and wealth creation. All these contributed to my success today, but the secret to my business success is God. There is nothing we do in this office that we don’t ask for God’s favour, He is our Alpha and Omega. In this office there is nothing we do that we don’t tell God; we pray in the morning and we pray to close each of our day’s operations.

As a major player in the telecoms recharge card distribution and marketing sub sector, how would you describe the industry?

Yes, the industry is full of illiterate and semi illiterate people, but with the new policies from all the companies, I expect that the situation will finally change. I believe that there will be a lot of changes because it is only in the telecoms sector that some illiterate people will buy something at the rate of N400 and sell it for N250, that is about 80 per cent less than the cost price. But now, the business is getting more exciting, interesting, and rewarding than what it used to be.

What prompted your interest in establishing a microfinance bank, which is seen as very risky commercial engagements, or do we reason that you preferred this because of your banking background?

It wasn’t my background in banking that inspired me to establish Sovereign Micro Finance Bank, rather, it was due to my interaction with the people at the grass-roots of my immediate community here in Mushin while I was operating the telecoms business. The economic plight of these people rekindled my interest in empowering the people in my immediate community. You know when we were doing the telecoms business a lot of people always came to us for financial aids in form of soft loans, but there was no way we could be able to solve all these needs, so we now saw the opportunity to serve and empower our people when the CBN came out with the guideline and licensing procedures for establishing micro finance bank, that was the vision.

Again, there was this experience I once had while I was trying to establish a friend in the recharge card business in Abeokuta. I then realized that what most people need is micro-credit, soft loan, when you don’t help people within your neighborhood they will be the same set of people that will make life difficult for you. Do you know some of those my friends who thought something was wrong with me when I left Zenith Bank today are now begging us to be part of what we are doing. But we shall adopt them provided CBN reviews its policy on the board membership; we are also looking for a way to involve them through our forthcoming private placement.

Don’t you think it is easy for Nigerians to abuse the concept of micro finance banking just like the earlier banking and finances houses of the past?

The establishment of microfinance banks and transformation of community banks is a thought in the right direction by the government, it shows the government knows what the needs of the people are; forget about the bastardization of the earlier finance houses, I can tell you the impact of the micro finance bank vision is already showing on our economy. As I am talking to you now, we are highly regulated, every MFB has a CBN supervisor attached to it and every bank is mandated to do a monthly return to CBN. They will trace and check all the loans you disbursed that month, so there is no way you can give all the loans to your family like in the era of finance houses and commercial banks of the past.

You can log on to the CBN’s website and check the full list of the MFBs as they are arranged alphabetically, this is also part of the effort to showcase them (micro finance banks) and for you to know the ones you can deal with, I can assure you there is no MFB that will like to go under because there are lots of opportunities in the micro financing business

Of all the MFBs in Lagos what do you think stands your Sovereign Micro Finance Bank out from the rest?

We believe so much in God, and this is the anchor of our own business philosophy… to be the fulcrum of creating financial independence for the people. You see, all these area boys, some of them have great talents but what they mainly want is financial empowerment. One of them approached us about three months ago that he wanted to have his own bus and I told him to go and start saving, that if he can save N50,000 out of the N450,000 he needed to buy a Faragon Volkswagen Bus, we will fund it.

He jumped at the offer and each day, he deposited N1500 with us out of the N3000 of his daily income from the transport business. We also work with other professional groups on how to empower their members. All these are parts of the ways to eliminate criminality from their minds because if someone has a wife and kids and a job, his approach to life will be different. He will not be thinking that he wants to die because he already knows he has a stake in this world.

What gave you the impression that Mushin people deserve another micro finance bank despite all the commercial bank branches that populate the roads?

I don’t think there is any other community that I will want to serve than the Mushin community; these are the people that deserve to be uplifted and empowered financially. It is the rural people who need micro-credit or micro-funding; our vision in Sovereign MFB is to empower all these so called area boys, and since I grew up in this area, I understand the economic philosophy and psychology of the people.

We’ve already started some collaboration with the professional groups’ trade and artisan associations on how to serve them better, and even the National Union of Road Transport Workers [NURTW]. We hope to set them up with financial backing of our bank.

Our operations here as telecoms recharge distributor had opened our eyes to many needs of the people. We are now able to understand the need of the people of this area, ask anybody here around Mushin, if they know Sufi Enterprises Limited, they’ll tell you that they know us very well, it is the goodwill we’ve created over time that is rubbing on the bank.

I have also realized that commercial banks are too big to recognize micro financing opportunities, they will not fund or support your business when you are small, it is always the big projects of billions and millions of big establishments that they will always be interested in funding while the man whose business need just N5, 000 to survive is left to wallow in abject poverty.

Which was the riskiest investment venture you had made?

The biggest investment risk I ever took was the outright sale of my entire investment portfolio when I couldn’t secure a loan to finance this MFB project. A friend at FirstBank just told me point blank that since my office complex didn’t have a certificate of occupancy, no bank will give me a loan and the best, he advised I did, was to liquidate my stock portfolio. That was how I sold all my stocks just as if I was been pushed by a spirit but to God be the glory, I was lucky enough to escape the stock market crash now being witnessed by investors. Up till today, my stockbroker still enquire from me how I was able to escape the downturn in the market.

There is no business that doesn’t have its own ups and downs, tell us the challenges being faced by operators of microfinance banks in Nigeria?

Our major challenge is commercial banks, they are becoming jealous of our achievements, which is why you see a lot of the country’s mega banks transforming into micro banks. They see us as threats, because they know we can go for clearing by statutory order and with this the commercial banks always stalemated us. At present, we have a serious battle with a commercial bank over a facility of N110million we got from a company which the company, the bank and us decided was supposed to be given to us but when the money was ready, they sat on it, denied us access to it because of our capital base. We need more money to service the micro needs of our people. What we devised now is that we have contacted about three to four banks for our clearing, one is in charge of the financing of Okada scheme, one for the NURTW scheme, while we also get another to manage our other schemes because it would be too risky to keep all our good eggs in one basket.

We are currently working with a commercial bank to provide us with an ATM which will soon be installed to serve the people of Mushin. We are going to table most of these problems before the Central Bank Governor at the next conference of MFBs in Nigeria. Maybe the Governor can help us caution the commercial banks.

Another major challenge we are facing, like every other business in Nigeria, is the problem of power supply. Large amount of our money goes to fuelling of generating sets, and mind you, we bought our own transformer at about N1.8million while our 100 KVA generator costs a whopping N2.9million and this we fuel with N8, 000 daily. If we plough these back into our business do you know the number of people that will benefit from our micro finance bank? The issue of multiple taxation, too, is another serious challenge to business in Lagos.

As an entrepreneur what will you say is your greatest achievement?

What I personally see as our achievement may not be too fantastic to you but for a company that started in a small shop five years ago on this street, selling recharge cards, now owns an edifice housing the headquarters of all our businesses which include banking, aquaculture, oil and gas, and telecoms; all these we can boast is valued to be above N100million.

We have about 60 well remunerated staff, with at least over eight brand new Toyota cars for our staff, and in the next three months, we are going to take delivery of another set of five new Toyota cars for our middle cadre officers. Some of our staffers who were employed some years ago with school certificates are now graduates while some are about completing their choice of courses in various higher institutions. While studying, we make sure they don’t lack anything. None of our staff has been involved in stealing and none had left us. We are still one united family five years after we started. Last December, we harvested our fish pond and the return from the investment yielded about N1.5miilion because it is safer to diversify to other businesses to expand our capital base and income sources.

What is your management style?

I am a hard working person, and all my staff members know this. I am always the first person to resume here and the last person to leave. Can you believe I live in Alagbado, yet I’m always very punctual at the office? You’ll see me resume here by 7.30a.m. everyday, I mentor my staff, they’ve all imbibed discipline from me. You know, I operate an open door policy here, all my staff are well remunerated. If a CEO is not disciplined, the staff will not be disciplined. Again, let me tell you that yesterday (Friday, 9 January) I was with one of my colleagues way back at Zenith Bank and he was reminding me how disciplined we were then while employed at Zenith Bank. He said it was I who once said that I dreamt that one day I would have my own bank, but we all did not believe it then because of the situation surrounding the licensing of commercial banks. But today, both of us are owners of full fledged micro finance banks; he owns Olive Microfinace Bank on Awolowo Way, Ikeja, Lagos, while my own is Sovereign Microfinance Bank, Mushin, Lagos. What we thought was impossible is now a reality in our lives. God has done it, it is easy now to grow a micro-finance bank into a commercial bank and that is our future because in the nearest future we hope to go public.

IS THE PRESIDENCY STILL ON VACATION?

It is no longer news that the problem Nigeria is having and may continue to haunt her has to do with lack of a functional plan or not planning at all or both. Either way, the fact remains that we need to do some re-think by way of seeing to it that we have a functional plan in place, a plan that we allow businesses to key in into activities with less disruptions and or distortions. A plan that will ensure stable prices and sound projections, with the Nigerian business operating in a near certain environment that is commerce friendly.

The envisaged plan should also take note of state tardiness and pump live into official activities with purpose and focus on what will benefit Nigeria and aid development.

Therefore, in this new year, we should spare some time to reflect on our past, reviewed against our present to shape our future as made popular by the late reggae artist ‘Peter Tosh’ in one of his works titled ‘Equal Rights’, in a lyric that states thus…“I reflect in the past, live in the present but working for the future…“. I propose this approach because Nigeria is notorious for not learning from experience.

The basic management tools that encourages review or auditing or appraisal of activities periodically is only in our consciousness to fulfil all righteousness. Beyond that it must be the way it has been, chaotic, dis-organized and sometimes, very violent and confusing. This way, records would have been compromised, and rules abridged so that accountability will suffer.

Painfully to the generality of the public, and to the benefit of a few who created the confusion, set goals and objective cannot be appraised and measured because the tools to do that has been corrupted and violated all because there was no plan in place at the out set.

The need for this reflection is ever present with us and is now more urgent and necessary than ever given the signals emanating from the direction of the ‘institutions’ that should show the lead and the way the nations’ economic activities should go.

Sadly, the national assembly always not sure of what to do next, may be, because they do not understand their briefs, probably by default or share ignorance, are yet to pass the 2009 budget. It is normal in Nigeria, even when in more than nine years of democratic practise; we are yet to come to terms on the necessity of being orderly. Imagine the senate president suggesting that by 2011, we would have ‘learn’ the act of passing the budget well’ on good time. No problem.

For a nation that has substituted an annual budget for a national plan not much should be expected and you cannot blame the senate president for displaying crass ignorance. It is just that the man has stayed a little more than two terms for a formal degree in a university on the average, yet he is asking for more time to have a resit? And this character is one of the key functionaries who are to give Nigeria an enabling environment for good business by way of laws that tallies with international standard.

Even the budget as presented has once again exposed our readiness to help other economies grow at our own expense. The small and medium sector of the economy received a good measure of neglect by way of protecting imports to local production. No thanks to the complete absence of any concrete serious plan to tackle the energy sector which should have reduced cost of production and conserve foreign reserve from the importation of petroleum products albeit shamefully though. Nor are the authorities bothered on the future health implications of having to run generating sets noted for pollutants. See the ‘Owerri” deaths. Our roads are where madam Dezani met them and may not even receive attention beyond the annual ritual of constructing the roads on paper at Abuja.

The presidency is still on vacation. Can we have some speed? Can we just for Gods sake change our time worn strategy? Please, we need it. And now too.

INVESTMENT GUIDELINE FOR 2009

You are welcome to 2009, I want to wish you a happy new year and my sincere prayer is that the Almighty God will see you through the year. During the course of the Christmas and New Year break I took time to reminisce on the events that took place in the financial markets in 2008. For example, all of us are aware that as far as the stock market is concerned 2008 was a year that you and I will not forget in a moment because it was dominated by the bears.

Dear friend, irrespective of all the challenges that we had witnessed in the capital market in 2008, it’s important for you to know that a new year has come. It’s time to get over the past and make new strategies for the challenges and opportunities that lie ahead which form the focal point of this article.

Stock market and general financial crises are recurrent phenomena in different generations, so it is inevitable. The most important thing is knowing what to do when we face financial challenges and that is why I want to congratulate you if you are reading this article because it will definitely open your eyes to common sense financial principles which a lot of us have broken and have paid seriously for.

HOW TO INVEST WHEN THE MARKET IS DOWN

1. Risk and Return: the forces of risk and return are two major factors you must put into consideration before investing your money in any venture this new year. Risk and return are twin brothers that are inseparable and in the financial world they have what we call a direct relationship, which means, the higher the return expected from an investment the higher the risk attached to it, also the lower the return expected from an investment, the lower the risk level will definitely be.

I want to appeal that you come to terms with these two major factors that will determine how successful you are financially in 2009, because investors who have ignored these forces, have had their fingers burnt and you reading this article might have been a culprit at one time or the other in the process of taking investment decisions.

I will explain these two major forces better by using the various classes of investments we have and how these two factors affect them. The classes of investments that yield the lowest return in Nigeria today include government bonds, treasury bills, fixed deposits and many other instruments that yield interests. As low as the return being generated from these instruments may seem, the level of risk attached to them is quite low; an investor who puts his money in any of these will, at least, be assured that he will get the principal invested back. Let’s take a look at the capital market that most of us are familiar with.

In Nigeria, the major instruments traded in the capital market are shares or stocks as some people call them. Shares are volatile financial instruments whose prices can go up or come down; they are not interest yielding instruments and are very different from the classes of investment earlier mentioned. At every time the prices of shares continue to go up or down, they are not meant to be static, and as a wise investor your major priority is knowing the factors behind these upward and downward gyrations so that you can take steps to safeguard your investment accordingly. But the painful observation I had made is that many investors who put their hard earned money in the stock market assume that stocks can only go up and not down, this is a wrong assumption.

The third dimension to viewing the forces of risk and return by a Nigerian investor is by considering the case of wonder banks like Sefteg, Wealth Solution and others. These wonder banks promised investors returns as high as 500 to 1000 per cent within a space of time. Most of these schemes did not stand the test of time because they have broken the same financial principle that I am sharing with you now. I actually found it funny when investors started complaining when these illegal fund managers folded up. My answer to the whole issue was very simple and I really need you to think about it very well: “If a scheme can promise the highest return within the shortest possible time, shouldn’t you be ready to face the music if all your funds are lost in the process, just because of that same financial law which states that the higher the return from an investment, the higher the risk will be.”

Dear readers, always take these two factors into consideration when it comes to investment and financial decisions you will be making in 2009 and years to come. They are basic laws in financial management that most investors often ignore but I want you to come to terms with them and apply them appropriately. I have shown you the weaknesses and strength of different forms of investment, in the next issue of this weekly, we will consider other financial principles that will guide how you invest in these trying times. Happy New Year!

Jide Ogunleye is a chartered accountant, and CEO, Denaro Capital Ltd.

Good management pays healthy dividends

Amid an atmosphere of escalating socio-economic uncertainty, it is important for both employers and employees to position themselves effectively.

Service providers who focus on people management through technology suggest this positioning should involve a serious review of the efficiency of human resources, recruitment processes and payroll administration.

Teryl Schroenn, CEO of Accsys, a provider of HR, payroll and time and attendance management solutions, says current conditions are forcing businesses to re-assess their abilities in these key departments and are also compelling job-seekers to fine-tune their skills and polish up on the basics.

“Decision-makers and HR managers have to check the results and outcomes of HR strategies, and whether these are having a positive or negative effect on progress and growth,” she says.

“Their recruitment policies, induction programmes, on- and off-site training programmes and career development programmes, all fall under scrutiny.”

Technology application is one of the first areas where decision-makers tend to heed a call to action. There is technology out there that can and does make a difference to processes and procedures, if applied correctly.

While this is true, says Schroenn, with any technology investment there needs to be a careful consideration over critical business requirements, existing systems in place, training and long-term consequences.

“Technology alone is limited in the elimination of problems with HR or payroll processes. At the end of the day, it still requires people to apply their skills and extract the maximum benefit and value out of the technology,” says Schroenn.

Accsys advocates the importance and relevance of training and skills development as elements of a corporate growth strategy. “Companies are also under pressure to ensure that they have a competitive recruitment policy framework in place and that skills development is firmly entrenched in their core operations. Essentially the effective management of people will pay short- and long-term dividends and reflect in an improved bottom line,” adds Schroenn.

“People management, in terms of the workplace, has changed and is being shaped by a myriad factors – from technology right through to economic pressure and work/life balance.

“The result is that job-seekers are more aware of what they would like from the workplace, but also that employers are more astute in their selection of candidates.”

However, while a company has a number of responsibilities with regard to people management and raising levels of productivity, employees and job-seekers need to be aware of the ever-changing dynamics of the modern workplace.

While the skilled employee is in a strong bargaining position, a long-term successful career requires a good track record in terms of a combination of skills growth and stability alongside strategic job moves and promotions.

Today, there are many career and lifestyle coaches who can assist employees with their choices.

Schroenn also comments that companies need to look both internally and externally for input on their people management policies. “It helps to have an experienced partner on board that has the knowledge and resources to offer proactive support and guidance to businesses.

“This is because a credible service provider can help organizations negotiate the many pitfalls in HR strategies. These challenges include lack of communication between employer and prospective employee, mis-information, poor placement of individuals, lack of training or input from management, and much more.”

Essentially, the tried-and-tested principle of a happy employee being a productive employee still holds true, says Schroenn.

McKinsey Global Survey Results: How companies make good decisions

Companies get a lot of advice about how to make good decisions. Which decision-making disciplines really make a difference?

Do strong decision-making processes lead to good decisions? This McKinsey survey highlights several process steps that are strongly associated with good financial and operational outcomes. In the survey, we asked executives from around the world about a specific capital or human-resources decision their companies made in the course of normal business. We learnt who was involved, what drove the decisions, how deep the analysis was, how unfettered the discussions, and how and where politics were involved. Respondents also described the financial and operational outcomes of the decisions.

The results highlight the hard business benefits such as increased profits and rapid implementation of several decision-making disciplines. These disciplines include ensuring that people with the right skills and experiences are included in decision making, making decisions based on transparent criteria and a robust fact base, and ensuring that the person who will be responsible for implementing a decision is involved in making that decision. Finally, although corporate politics sometimes seems to undermine strong decision-making, some types of consensus-building and alliances apparently can help create good outcomes.

Notes. The survey was in the field in November 2008 and received responses from 2,327 executives from the full range of industries, regions, and functions.

Describing the decisions. The survey covered the gamut of typical corporate decisions, from expanding into new products or services to maintaining infrastructure. More than three-quarters of investments were aimed at revenue growth, and among decisions related to human resources, the majority aimed to improve efficiency or productivity.

A majority of decisions were undertaken at the behest of the CEO or the executive committee, with only a minority (23 per cent) driven by some sort of immediate threat. More decisions were made outside an annual planning process than within one. And nearly two-thirds of respondents say they expected their decision to pay off within two years of implementation. Operations executives had significant influence on only about a third of the most financially unsuccessful decisions, reinforcing findings from other surveys that companies frequently overlook execution when making decisions.

Overall, outcomes for these decisions were good. Among decisions for which the outcome was known, about two-thirds met or exceeded executives’ expectations for revenue growth and cost savings.

Furthermore, strong majorities of respondents say the results of their initiatives met their expectations for speed, implementation cost, and gains in market share or efficiency.

Outcomes are not known for about 20 per cent of decisions aimed at revenue growth and 16 per cent of decisions aimed at cost savings.

What goes into a good decision. For starters, the survey emphasizes that good decision-making involves avoiding some basic mistakes. Decisions initiated and approved by the same person generate the worst financial results indicating the value of good discussion. And decisions made at companies without any strategic planning process are twice as likely to have generated extremely poor results as extremely good ones, more than a fifth of them generated revenue 75 per cent or more, below expectations. This may indicate an overall lack of rigour at these companies.

Furthermore, this survey highlights several elements of decision-making processes that are associated with good financial and operational outcomes, whether the goal is revenue growth or cost savings. One relatively straightforward finding is of strong relationships linking financial success, clarity about who is responsible for implementation, and the involvement of that individual in the decision-making process. Other important findings concern the types of analysis, discussion, and corporate politics that are associated with successful decision-making.

Analysis. We asked about 11 aspects of analysis. Four are associated with financial success, speed of project completion, cost of implementation, and improved efficiency or productivity:

Performing sensitivity analysis and creating financial-risk models

Including comparable situations from one’s own or the firm’s experience

Examining the risks of this project combined with the risks of other projects in the firm’s portfolio

Creating a detailed financial model of the decision.

The survey also indicates that including analogous situations from outside of the organization improves some outcomes, notably expected profitability and revenue growth.

Discussion. Respondents also describe the discussions surrounding their decisions. Of the eight potential discussion types we asked about, three are associated with financial success and with completion of the project in less time than expected:

Encouragement of participation on the basis of individuals’ skills or experiences

Reliance upon transparent approval criteria for the decision

Discussion of this decision as part of the firm’s whole portfolio of decisions.

Politics. Corporate politics has a bad name, but respondents suggest that the effect of politics depends on the nature of the tactics used. When executives involved in a decision were primarily concerned with its effect on their business unit rather than the overall organization, for example, financial results and all other measures of success were much likelier to fall far below expectations. Simply put, a silo mind-set hurts performance. In addition, slow project completion times are associated with selective information reporting.

However, the survey results suggest some types of informal alliance-building and horse-trading among executives, may help companies make good decisions. We asked about six ways that politics can affect decisions. Better-than-expected completion speed is associated with executives forming alliances to craft consensus for action across business units and with executives making exchanges across alliances to build support for different projects.

Finally, a word about CEO involvement: Respondents say CEOs tend to have a large role in instigating both the most and the least successful decisions. Perhaps this indicates CEOs are more likely than other executives to place or be able to secure approval of risky bets with big up-sides and down-sides. This result also suggests that thorough examination and devil’s advocacy will be particularly valuable when CEOs champion pet projects.

Looking ahead. Unlike the external risks that accompany most strategic initiatives, the analysis of a project, its discussion, and the management of the internal politics, lie entirely within the control of the top leadership team. Companies not using the best practices identified here should be able to improve their decisions simply by following these guidelines:

Pay particular attention to the risks of the project, examined through a detailed financial model, sensitivity analysis, and the relationship of those risks to the risks of other projects in the firm’s portfolio. Learning from past comparable situations also is beneficial.

Ensure that participants in the discussion about any decision are included on the basis of skills and experience, that decision criteria are transparent, and that the decision is discussed in relation to the organization’s other strategic decisions.

Put organizational goals ahead of business unit’s goals, and encourage efforts to build consensus across business units.

About the Contributors. Contributors to the development and analysis of this survey include Massimo Garbuio, a lecturer at the University of Sydney, Dan Lovallo, a professor at the university and a research fellow at the Institute of Management, Innovation and Organization at the University of California, Berkeley, as well as an adviser to McKinsey; and Patrick Viguerie, a director in McKinsey’s Atlanta office.

Notes Including intelligence about the likely reactions of current and of potential competitors, doing sensitivity analysis and financial models of risk, examining the risks of this projects combined with the risks of other company projects, studying multiple comparable cases to provide a reality check on financial analysis, creating a detailed financial model of the decision, analyzing the potential reaction of capital markets and analysis, studying comparable situations from both inside and outside the firm, including information that would contradict the investment hypothesis, and basing the decision largely on intuition.

Respondents were asked whether the discussion of this decision included the firm’s whole portfolio of decisions, the major uncertainties inherent in this decision, participants determined by their skills and experiences, transparent approval criteria, points of view contradictory to those of senior leaders, and a robust fact base. Also, they were asked whether the decision was made and implemented, at least, as quickly as it would have been by competitors.

WHEN CONDOMS AND APHRODISIAC DOMINATE SHOPPING ITEMS

Written by Tom Obaseki.

Yes, Welcome to 2009. Yes, Most of us Pharmacists are usually always pushed to the peak of professional counselling during end of year celebrations. Christmas and New Year celebrations are supposed to be periods for stock taking and sober reflections. Unfortunately, it is now associated with high level of promiscuity, infidelity and unprecedented high level of sexual activities.

It is not unusual to find most Pharmacists overwhelmed with demand for condoms, aphrodisiacs and ‘Postinor-2.’

For the group of condom seekers and users, our problem is usually half solved as they already appreciate the challenges of sexuality and are already taking steps to practise safe Sex.

A new development that however characterised the last festivities was the strong demand for aphrodisiacs like never before. While the men wanted to boost their strength and power, the females were desperately seeking for medicinal enhancement to prove a point by satisfying their men in order to impress them.

But then, the highest professional counselling requirement was certainly from the group that used Postinor 2. Postinor 2 belongs to the class of emergency contraceptive indicated for people that engage in infrequent sexual intercourse to prevent pregnancy.

This group usually start turning out at the pharmacies from Christmas day after the merriment’ and revelling of the Christmas Eve. The demand for the contraceptive usually peaks on Boxing Day. Over the years this group have grown in number and is populated almost, by females of different age groups.

This year, the below 30years bracket seems to have taken the lead within this group on the demand spectrum. This is where the problem really lies. This group is made up of young girls who are sexually naive and their only fear in a relationship with the opposite sex is unwanted pregnancy.

The ever increasing number of this group suggests to us that the message of safe sex may just be hitting the rocks and not getting home.

Outside these sexuality group are those general fun seekers who over indulge in everything eatable with their mouths. They take every drink and eat every food available. Do you blame them? No, food and drinks are just in abundance. From afternoon on Christmas, they start trooping into pharmacies with complaints manifesting as indigestion and/or diarrhoea. Unfortunately, they are too quick to self medicate by asking for Flagyl Thalazole and Tetracycline when what they need is just an ant-diarrhoea. This is usually the time that most Pharmacies, run out of stock of Antacids and Andrews Liver salt.

What is the lesson for the season? It appears there is no better time and season to emphasis campaigns on sexuality, HIV/AIDS and STDs than the days leading to festivities like Christmas. Non Government Organisation, (NGO’s) and appropriate government and private agencies involved in projects in these areas will achieve so much success if such campaigns started in November and peaks toward the Christmas and New Year celebrations the effect would be better felt in the target group.

CRISP FUN AT SKYEBANK END OF THE YEAR PARTY

Work hard, play hard, clear all worries form the fulcrum of the marketing theme of Skye Bank’s Hakuna Matata!

Staff of the bank lived it up big time at the bank’s year end party that had top of the range artistes including 9ice and D’banj perform live on stage!

It was merry making all the way with plenty to eat, drink and even take away souvenirs.

The well organized and well attended event was held at the Eko Tourist and Beach Resort.