In Summary
  • Do we take succession planning seriously, and how many of our CEOs can authoritatively assert that they have built a strong executive bench from within?

  • It will be very tempting for the board to look back with nostalgia at the tenures of Michael Joseph and Collymore.

  • Yet the truth of the matter is, the technology and business will be dramatically different for Collymore’s successor.

The raging debate about Bob Collymore’s replacement at Safaricom has brought to the fore the critical importance of succession planning.

It was the famous American corporate titan Jack Welch who, having been CEO of the conglomerate General Electric for 20 years, proclaimed that he had such a good executive bench that, if he ever dropped dead, several of them could ably step into his shoes.

CHANGES

Do we take succession planning seriously, and how many of our CEOs can authoritatively assert that they have built a strong executive bench from within?

I see some of our large commercial banks finding themselves in a similar situation as Safaricom. Four of the nine listed banks have CEOs in the two-decade club in terms of tenure.

Still, I urge the Safaricom board to set the bar very high when scouting for Collymore’s replacement. First, this is, by far, the largest corporation in the region, the largest taxpayer and owns and runs the M-Pesa platform that has grown into a systemic financial market infrastructure in the national payments system.

We mustn’t forget that there are several transformative technological changes in the horizon that are outside our hands. The 5G technology will revolutionise data, voice and value-added services. Today, we read about blockchain, Artificial Intelligence, Fintech and the transition to a cloud-fast and cloud-only world.

It will be very tempting for the board to look back with nostalgia at the tenures of Michael Joseph and Collymore. Yet the truth of the matter is, the technology and business will be dramatically different for Collymore’s successor.

Let us get a Safaricom CEO who is best-placed to manage that future landscape.

Collymore’s exit from the scene got me reflecting on the state of regulation of the telecoms sector. What does the competitive environment look like? More pertinent, is there a realistic chance that we may soon get a mobile telephony service provider capable of giving the vastly profitable Safaricom effective competition? I doubt it.

What we have is a case where two loss-making dwarfs have been outspent by a giant on capex as to render them incapable of competing effectively.

COMPETITION

Consider the following. You are in a high-tech sector that is undergoing rapid technological change, you choose not to make any major investment in your business, you sell all your estate assets, you dispose of your towers and you are not spending additional money on spectrum – but still insist that you are still in the race!

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