130130 SGF Thought Leadership email version

5. People

Strategies are not self-executing. Boardroom-level strategy-making can map out the most exciting opportunity matrices and solid riskmitigation measures across the continent — but their actualization inevitably turns on staff in the countries of operation. Firms that are serious about seeing through their African investment in the longer term have found — and will continue to find — that genuinely investing in people can bring significant rewards. In addition, in many settings, firms encounter large labor surpluses co-existing with shortages of skills.

In the future, success in many sectors and settings will tend to turn on the ability to put human resource development, especially for middle and lower management or team leaders, at the heart of strategy execution. Sustained achievement will depend to a very large extent on finding, training, retaining and supporting good people, in particular, local staff. Relationship networks around staff and their families, as well as host communities, have particular salience in many African contexts.

Specifically, a people-centered approach will mitigate risk in three key areas:

•Social license to operate. Approaches that seek to foster a wider sense of community and derivative enterprise around the firm can give the firm a social license, helping to mitigate disruption and reduce reputational risk. The risk is that executives may underestimate the degree to which members of these networks do not necessarily see clear distinctions between categories of people associated with or impacted by a firm’s operations.

•Relevance to the African consumer. There is continuing (and growing) focus on the African consumer at all levels, especially the scope for further innovation of high-volume, low-value transactions.

In a climate of increasing competition from local and foreign providers and manufacturers, a people-centered approach will add value to consumers. This is particularly true, given the potential for adverse reactions to imported goods or services associated with certain foreign policy considerations.

•Brand management. A people-centered approach will help companies to project their brand as being in touch with its environment. Firms will find many opportunities to strengthen their businesses and brands, while also empowering female participation in the workforce.

Misunderstanding the nature of the challenges in this area carries with it several hazards. In particular, one risk is the temptation to adopt proactive top-down approaches that prevent the reception and application of bottom-up impulses. Africa’s emerging consumer base may not necessarily have a well-developed sense of what specific goods and services appeal to it. However, the continent’s millions

of potential buyers and users are the ones most familiar with their environment, and as such are likely to have a good idea of what will work best for them. Rolling out consumer-facing strategies across Africa should not see customers as simply being on the receiving end of a firm’s products, but as collaborators in producing better, more tailored goods and services.

Additionally, the centrality of the consumer puts a premium on local knowledge and awareness, and firms that are able to unlock the right mix of, for example, local and foreign associations in brand management, will reap rewards. Other such priorities include

calculations of where to place products on the cost-quality spectrum, and how flexible firms need to be when providing their goods and services. For all of these considerations, knowing how people within the local market perceive your product is crucial when looking to unlock value for the consumer.

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“We are excited and very positive about Africa. We are optimists, but we are realistic optimists — our perspective is deliberately a glass half full, rather than a half empty one. This is mainly because we believe that it takes a positive mindset to succeed in Africa. If you set out expecting difficulty and risk, you will find it. However, ours is not a point of view informed by anecdotes and wishful thinking — the numbers speak for themselves.”

Ajen Sita, CEO, Ernst & Young Africa

19 Strategic Growth Forum | From strategy to execution

Conclusion

The size, diversity and inherent complexity of doing business across the continent will continue to test even the best-laid corporate strategies for growth in Africa. Yet the rewards to be had are very real, and African governments and communities will continue to welcome responsible and committed investment.

Indeed, the same issues that are often cited as barriers to greater interest or success could prove to be those that, especially over time, create scope for realizing strategic growth aims. Greater regional integration and infrastructure development hold the prospect of a more connected continent, while the paucity of data or well-developed services is a situation that forces companies to think for themselves and decide what key performance indicators matter, or not, to their own performance and outlook.

Within an overall context of strategic flexibility, the five P’s framework we have outlined in this report is intended to assist in supporting decisions on, and responses to, the factors that we believe are most critical to effective strategy execution in Africa. This is not offered as a recipe for success – there is clearly no such thing. However, through our experience and observations, these factors are most consistently evident in strategies that have been successfully (and sustainably) executed over time in Africa.

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Ernst & Young Africa

We help companies navigate the opportunities and challenges of doing business across the African continent. Africa is receiving unparalleled attention from large global companies, with the substantial opportunities in oil and gas, mining and agriculture, closely followed by consumerdriven demand in the areas of consumer products, telecoms, financial services, information technology and others.

To further support our activity on the continent and in strategy co-development with businesses, the Growing Beyond Borders™ software is an Ernst & Young developed and owned software that visually maps data through the lens of the world’s geography, in a highly intuitive manner. It helps to navigate the challenges and opportunities in doing business across the globe. Publicly available data, as well as our own surveys, are depicted in heat maps, competitive footprint views and comparison tables across the map, to help companies make business decisions and grow beyond their current borders.

Africa Business CenterTM

Although the risks in investing in Africa may appear high, risk can be managed, and the rewards can be great. That is why we are investing in growing our integrated Africa presence and capacity to serve our clients who are also investing in and across the continent.

We now enjoy an integrated representation in 33 countries across Africa, described in the media as “one of the biggest changes in the accounting profession in more than 100 years.”

Today, we are able to navigate successfully through the complexity that our clients are experiencing across the geographies, and the diversity of market sizes and sophistication.

We do this through our Africa Business CenterTM: its sole purpose is to assist clients in making their investment and expansion decisions in Africa.

Our Africa integration benefits our clients through:

•A network of people across Africa and the rest of the world, enabling us to coordinate our resources to provide clients with a single point of contact

•Pre-eminent thought leadership and events such as the Africa Attractiveness Survey and Growing Beyond series

•The unique Growing Beyond BordersTM software — an interactive map-based tool that visually maps data through the lens of the continent’s geography

•A proven methodology for supporting the development of growth strategies for Africa

Contact us

Michael Lalor			Sylvester Taku
Africa Business CenterTM Leader			Africa Business CenterTM
Mobile:	+ 27 (0) 83 611 5700		Mobile:	+ 27 (0) 83 411 0005
Email:	[e-mail]		Email:	[e-mail]
		Name	Mobile		Email
Advisory Services		Viv Oates	+ 27 (0) 83 611 7000		[e-mail]
Transaction Advisory Services		Sandile Hlophe	+ 27 (0) 71 332 9171		[e-mail]
Assurance		Lance Tomlinson	+ 27 (0) 83 611 1274		[e-mail]
Tax Services		Jim Deoitte	+ 27 (0) 71 355 9499		[e-mail]
Regional leaders
West		Henry Egbiki	+ 234 146 304 7980		[e-mail]
Central		Walter Mupanguri	+ 263 475 7402		[e-mail]
Eastern		Gitahi Gachahi	+ 254 202 715 300		[e-mail]
FSSA		Jean-Francois Albrecht	+ 225 202 111 15		[e-mail]
Southern		Ajen Sita	+ 27 (0) 11 772 3000		[e-mail]

21 Strategic Growth Forum | From strategy to execution

163	1	33	5	1	263 5100
years in Africa	integrated	countries	regions	African	partners staff
	operating			executive
	model

Our Africa footprint

	o
	c
c
oro
M

Tunisia

Algeria	Libya	Egypt

Cape	Mauritania
Verde		Mali	Niger
				Chad

Senegal

Gambia

Guinea

Bissau

Guinea

Burkina Faso

Ghana	Nigeria
	Benin	Central African
	Togo Cameroon Republic

Sudan	Eritrea
	Djibouti

South Ethiopia

Sudan

Uganda Somalia

Equatorial Guinea

Sierra Leone	Sao Tome
Liberia
Côte d’Ivoire	Gabon
	Congo

Ernst & Young office

No Ernst & Young office, but support available

Democratic		Kenya
Republic of
	Congo	Rwanda		Seychelles
	Burundi	Tanzania	Comoros
Angola			Malawi
	Zambia
			r	Mauritius
	Zimbabwe		ca
Namibia			as
			g
			a
	Botswana		ad
			M	Reunion
		Mozambique
		Swaziland
South Africa		Lesotho

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Contact us

Country leaders

Country	Name	Email
Algeria	Philippe Mongin	[e-mail]
Angola	Luis Marques	[e-mail]
Botswana	Bakani Ndwapi	[e-mail]
Cameroon	Joseph Pagop	[e-mail]
Chad	Joseph Pagop	[e-mail]
Congo	Ludovic Ngatse	[e-mail]
Côte d'Ivoire	Jean-Francois Albrecht	[e-mail]
DRC	Lindsey Domingo	[e-mail]
Egypt	Emad Ragheb	[e-mail]
Equatorial Guinea	Erik Watremez	[e-mail]
Ethiopia	Zemedeneh Negatu	[e-mail]
Gabon	Erik Watremez	[e-mail]
Ghana	Ferdinand Gunn	[e-mail]
Guinea Conakry	Rene-Marie Kadouno	[e-mail]
Kenya	Gitahi Gachahi	[e-mail]
Libya	Waddah Barkawi	[e-mail]
Madagascar	Gerald Lincoln	[e-mail]
Malawi	Shiraz Yusuf	[e-mail]
Morocco	El Bachir Tazi	[e-mail]
Mauritius	Gerald Lincoln	[e-mail]
Mozambique	Ismael Faquir	[e-mail]
Namibia	Gerhard Fourie	[e-mail]
Nigeria	Henry Egbiki	[e-mail]
Rwanda	Allan Gichuhi	[e-mail]
Senegal	Makha Sy	[e-mail]
Seychelles	Gerald Lincoln	[e-mail]
South Africa	Ajen Sita	[e-mail]
South Sudan	Patrick Kamau	[e-mail]
Tanzania	Joseph Sheffu	[e-mail]
Tunisia	Noureddine Hajji	[e-mail]
Uganda	Muhammed Ssempijja	[e-mail]
Zambia	Alasdair Stewart	[e-mail]
Zimbabwe	Walter Mupanguri	[e-mail]

23 Strategic Growth Forum | From strategy to execution

Industry leaders

Industry	Name	Email
Banking and Capital Markets	Emilio Pera	[e-mail]
Insurance	Malcolm Rapson	[e-mail]
Asset Management	Chris Sickle	[e-mail]
Public Sector Leader – Advisory	Yunus Naidoo	[e-mail]
Public Sector Leader – Assurance	Kuben Moodley	[e-mail]
Government & Infrastructure	Joe Cosma	[e-mail]
Mining & Metals	Wickus Botha	[e-mail]
Oil & Gas	Elias Pungong	[e-mail]
Power & Utilities	Norman B. Ndaba	[e-mail]
Retail & Consumer Products	Derek Engelbrecht	[e-mail]
Telecommunications	Serge Thiemele	[e-mail]

Invest in Africa is a partnership of companies successfully operating in Africa, that have come together to challenge the misconceptions around doing business in the region, by demonstrating Africa as a credible business destination.

By driving more sustainable investment into the continent and fostering partnerships with local firms, Invest in Africa is working to improve the business environment, support enterprise and provide a leading platform for the private sector in Africa.

Launched in 2012 by Tullow Oil Plc, Invest in Africa is also collaborated with Ernst & Young, and agribusiness and infrastructure provider Lonrho Plc. These and future founding partners are bound together by a code of conduct that outlines their shared vision and belief in sustainable investment, that delivers jobs and ensures the transfer of knowledge and skills to local firms.

Companies already operating in the region are overwhelmingly positive about Africa’s potential, but those without a presence on the continent are surprisingly pessimistic. By harnessing the first-hand experience of its partners, Invest in Africa works to tackle this gap between the perception and reality of doing business in Africa, by demystifying the investment process and creating new partnerships that drive both business growth and wider development. In 2013, our focus will be on launching the following initiatives:

• Developing local content capacity

Working with other investors, indigenous firms, local communities and governments to improve the quality and quantity of local suppliers — particularly around transparency, sustainability and the credibility of anti-bribery and corruption measures. This will be delivered through the “African Partner Pool.”

• Commitment to sustainable investment

Bringing together firms who already work in Africa and have a shared belief in the long-term positive impact of driving greater sustainable investment within the economies in which they operate — delivering jobs, growth and economic diversification. This will be realized through our Sustainable Investment Code of Conduct (SICC).

• Improving the business environment

Coordinating with governments and communities to convert shared investor challenges into opportunities that will improve the business environment, and further demonstrate to the international investment community that Africa is truly “open for business.”

These initiatives will initially be launched in Ghana, followed by Kenya and Uganda. While these are the priority markets, the reach of Invest in Africa is far wider, and our operations on the continent will grow in parallel with our expanding membership.

There is compelling evidence that investment is the most effective way to create jobs and expand prosperity and opportunity. With the rapid growth of African economies and increasing demand for goods and services, we are convinced there has never been a better time for businesses to invest in Africa.

www.investinafrica.com.

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Ernst & Young

Assurance | Tax | Transactions | Advisory

About Ernst & Young

Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 167,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential.

Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services

to clients. For more information about our organization, please visit www. ey.com

© 2013 EYGM Limited.

All Rights Reserved.

Africa Business CenterTM (ABC)

Michael Lalor

ABCTM Leader

Tel:	+ 27 83 611 5700
Email:	[e-mail]

Sylvester Taku

ABCTM Executive

Tel:	+ 27 83 411 0005
Email:	[e-mail]

Charlie Pistorius

ABCTM Analyst

Tel:	+ 27 72 355 9253
Email:	[e-mail]

Sarah Custers

Marketing

Tel:	+ 27 11 772 3300
Email:	[e-mail]

Fathima Naidoo

Press Relations

Tel:	+ 27 11 772 3151
Email:	[e-mail]

@ EY_Africa www.ey.com/za

This report has been produced in collaboration with Oxford Analytica.

The opinions of third parties set out in this publication are not necessarily the opinions of the global Ernst & Young organization or its member firms. Moreover, they should be viewed in the context of the time they were expressed.

EYG no. CY0452

SGF Brochure

This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Neither EYGM Limited nor any other member of the global Ernst & Young organization can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter, reference should be made to the appropriate advisor.

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