Downtown Cape Coast, Ghana

Pulsating business scene

I spent the last couple weeks on assignment in Accra, Ghana. On this trip, I’ve seen more growth than any time since my company started working there in ‘07. This is a period of unprecedented business activity and promising new projects within and beyond the mobile sector.  Meanwhile, new competitors from around the world are streaming in. This corner of Africa’s business scene is pulsating.

Astute businesses here are taking steps to preserve their client base and deepen relationships with their customers. We’re privileged to work with a new generation of African business leaders with the courage and determination to transform their offerings to meet the needs of an emerging class of consumers.

These are exciting times to work with African business leaders who take seriously their mandate for investing in new technologies and business practices.  We’re helping them gain competitive advantages by improving the service systems that support touch points, by adding new service channels, and by harvesting business intelligence, among other initiatives.

Building competitiveness

The most effective strategy for businesses to gain a competitive edge here is to understand and meet the customer needs better than their rivals.  Forward-thinking leaders here know that competing on service will help preserve their customer base and attract new customers even as the marketplace grows more crowded with aggressive new entrants.

Developing insights about customers’ preferences and purchasing drivers helps companies here achieve competitiveness as well as profitability.

It also creates jobs. Thriving regional businesses are Africa’s greatest engine of job creation and economic growth.  That’s why we’re committed to collaborating with leading African businesses, knowing that their success means more jobs and higher living standards across the region.

What it takes to work here

This question comes up frequently in my circles. I think Western companies operating here require a distinctive set of leadership and communication skills. Traditional business skills are necessary but not sufficient to address the complexity and scale of challenges on this continent.

But what’s needed for Western companies to operate effectively in this environment? We’ve explored this question with business leaders in various sectors as well as academics, entrepreneurs, and technology innovators.

Our conclusion is that it’s not enough to bring an open mind. We must be skillful listeners. That means checking our assumptions at the door and listening with the intention of gaining deeper insights about the market and, most importantly, the customer.  Deep collaboration with partners and clients is key.

Africa’s dynamism and complexity require going beyond merely tolerating ambiguity. Ambiguity, a ubiquitous feature here, must be embraced.  “Leaning into” uncertainty is critical to problem-solving in this market.

It’s critical to drop the need for control, otherwise it’s tough to handle the inherent ‘push-pull’ of a region that’s steeped in tradition while it grows so rapidly.

The ability to consider competing, often “fuzzy” options helps us work with stakeholders here to produce the imaginative, yet practical solutions that the region demands.

Finally, operating in the region requires extraordinary levels of patience and perseverance.  Change rarely happens in sweeping strokes here. Instead change occurs through “successive approximations”.  One step forward, two back but always moving ahead.  Patience — never my strongest card — is essential.  (Note: I’m working on it.)

People, Process and Technology – Redux

Succeeding here requires mastery in choreographing people, process and technology, and we help clients focus on all three dimensions — what we refer to as “service systems”.  Of the three, ‘people’ is the most critical and challenging to optimize.

Africa’s leading companies are now investing heavily in their people because they know, in the end, that this the only sustainable ‘differentiator’.

On this trip, I observed how one company in particular, a leading business process outsourcer and partner, transformed its organization into a high performance business by nurturing its talent.  It accomplished this feat by fostering competition among its teams while encouraging buy-in and autonomy among team members.

Watching their evolution over time has been both heartening and instructive. Today, I’d stack them up against any competitor in the world. This kind of innovative, customer-focused organization is poised to meet the needs of customers in any market.

Lessons from Africa

Like all prior trips to Africa, this one was a valuable learning experience on several levels.  I encountered a new generation of leaders and was impressed by their willingness to invest in becoming more competitive. The vitality of the continent’s nascent mobile-web industry is breathtaking.  Keep an eye on this exciting space…

I also learned more about my company on this journey. I’m reminded that what separates us from our peers is our passion for and commitment to producing substantial results for our clients and their customers across the sub-Sahara.  It’s energizing to work on a continent of one billion people whose economic growth is only surpassed by China, and I never forget what a rare opportunity it is.

***

What do you think?  I’d appreciate hearing your perspective.

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Want more info on this subject?  You’re not alone.  There’s a plethora of books about conflicts and coups in Africa, but there are fewer resources about doing business on the continent.  I’ve previously recommended Paul Collier’s ‘07 book, The Bottom Billion, which remains relevant.

In ‘07, TED organized Africa: The Next Chapter, a series of talks which included the first TED conference held on the continent.  The series featured a stellar lineup of speakers on a range of topics about Africa.  Since then, TED has added new presentations about business development in Africa to the series, and  I heartily recommend it.

Here are some of my prior posts about the sub-Sahara.

I’d appreciate hearing your recommendations about resources on this topic.

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Evening at Cape Point on the tip of South Africa

While the business world is preoccupied with the global economic recovery, a mobile revolution is quietly reshaping the marketplace in the developing world. In Africa, mobile phones are providing access to communications for millions of people who’ve never had fixed communications let alone cell phones. I’ve written before about the impact that such ‘leapfrogging’ is having on African business.  Now, we’re beginning to see exciting and substantial commercial projects taking shape, particularly in the service sector.

By the numbers

To call this a ‘revolution’ is hardly hyperbole. Consider the scale of mobile industry’s growth in Africa. According to a recent report by the International Telecommunications Union, the number of mobile subscribers skyrocketed from 5% of Africa’s population in 2003 to over 30% by the end of 2008.  Today, some 400 million Africans have mobile phones — that’s 100 million more than in North America.

Since only a third of Africa’s billion people have handsets, there’s plenty of room for more growth ahead. But, the interesting story, I think, is how the mobile phone is already remodeling African economies and creating promising, new opportunities for businesses and individuals in the region.

Mobile phones are enabling rural and low income people to join the economy while creating a stable infrastructure for businesses and emerging consumer markets.  Mobile communications are making it possible for new services to develop and thrive.

At the junction of mobile and web

Africa’s mobile subscribers are using handsets to access services that consumers in developed markets typically get from the fixed internet. The junction of mobile and web is a green field for inventive engineers and entrepreneurs.

New, innovative mobile applications are being developed in sectors ranging from banking, agriculture and fishing, medical, education, to government and non-profits.  It seems that every week, we read about a novel way that mobile technology is being used to meet the consumer needs.

M-banking, as mobile-banking is known, is arguably Africa’s most successful mobile-enabled service sector so far. Last year, m-banking initiatives were launched in almost every country across the continent. As banks and mobile operators join forces to deliver m-banking programs, Visa and MasterCard are watching the sector closely hoping to ‘leapfrog’ into markets where no viable payment infrastructure currently exists.

Kenya’s Safaricom was one of the first mobile operators anywhere to roll out an m-banking program, M-Pesa. Originally it was used solely for money transfer but Kenyans are increasingly using M-Pesa to pay their utility bills.

Taking this a step further, m-banking is enabling another layer of services — known as ‘m-commerce’ — where goods and services can be bought, sold or traded. In remote regions where the fixed-line communications are thin or non-existent, m-commerce can enable buyers and sellers of goods and services to find each other.

What’s next?

As new land-based and submarine cable deployments slated for later this year make 3G widely available in many parts of Africa, we’re likely to see m-commerce grow which should mean more investment by the business community and, ultimately, more jobs for Africans and improvements in their quality of life.

Africa’s mobile revolution is bringing as many challenges as opportunities. Governments on the continent must keep pace with dynamic mobile economy by taking courageous steps to encourage outside business investments.   African governments must develop templates for working collaboratively with businesses to enable their citizens to enjoy the benefits of the mobile revolution.

One thing is clear: there’s no stopping the growth of the mobile industry in developing markets, especially in Africa. The mobile phone is helping to put the continent on a path toward greater economic sustainability.  I find it utterly fascinating to see how innovative businesses and imaginative people are harnessing the power of connectivity in Africa.

***

As always, I’d love to know your perspective.

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Want more info?  Here’s an October ‘09 piece in the Guardian, “Africa Calling…” and a New York Times article from the same period.

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It’s been a week since the Port-au-Prince earthquake and images streaming in are helping us to grasp the region’s boundless misery and desperation. Hundreds of thousands have perished, and despite our best efforts, more will die and suffer for myriad reasons including the inability to deliver relief where it’s needed.

Despite the gut-wrenching news, it’s heartening to learn that determined, inventive people are finding ways to alleviate the suffering and, in some cases, save lives.

One of the more interesting stories is about an open-source project called Ushahidi which takes its name from the Swahili word for “testimony”.  The software, developed during the post-election violence in Kenya in 2008, enables text messages to be mapped by time and location.  Anyone with an internet connection, regardless of the device they use to access it, can send a text message, an image or an email. Ushahidi can also store data offline for later synchronization.

During its initial deployment in Kenya, Ushahidi was used to record hundreds of incidents of violence that might have otherwise gone undetected. It’s since been used to document incidents in the War in Gaza,the Vote Report India and Pak Voices (violence in Pakistan).  Ushahidi has also been used to track crime using its Atlanta Crime Maps.

But the application met its most demanding test after the earthquake in Haiti when the country’s mobile networks were down. Even after coverage was restored, the Ushahidi team realized that they needed a local SMS short code for the system to be widely accessible.

With a little help from our friends

Fortunately, Ushahidi has friends in high places. The team turned to Josh Nesbit, Co-Founder of FrontlineSMS:Medic, who used Twitter to reach a contact on the ground who was on his way to local mobile carrier DigiCel’s command center. With the help of the U.S. State Department, Ushahidi secured short code 4636 from DigiCel which is now being used to record the times, locations, and accounts of incidents.

Ushahidi updates its Haiti incident map with reports of medical emergencies, security threats, relief efforts and logistical bottlenecks.  It provides a filter for mapping earthquake survivors and deaths. Ushahidi also aggregates Tweets and streams from YouTube and Flickr, all of which can serve to orient first responders and relief workers while giving the rest of us a granular picture of what’s going on in the region.

Ushahidi teams in Kenya and Uganda are working around the clock to verify data from Haiti, and a university in Geneva, Switzerland is establishing a situation room there. Meanwhile, Ushahidi’s Boston team has approached Harvard, MIT and other institutions seeking volunteers to handle the massive volume of data pouring in.

As someone interested in how “home grown” technology is used in developing regions, this story is especially gratifying.  Ushahidi is about how inventive people in one developing country have created a simple but powerful “crowd-sourcing” tool to provide assistance in another hemisphere.

I’m concerned that “crisis fatigue” will set in, dampening world interest in supporting Haiti’s relief efforts.  By raising awareness about the on-going challenges in the region, we stand a chance of preventing the potential “disaster after the disaster”.

As this crisis evolves, new unforeseen challenges will arise. Let’s recognize that this is a long-haul operation. Perhaps stories like Ushahidi can serve to focus our attention on the enormous level of humanitarian assistance that’s needed in Haiti, and what we can do about it.

***

Note: Ushahidi is currently seeking volunteers to process incoming SMS reports. Here are instructions to find out how you can help.

> Update (4/6/10):  Here’s an interview with Ushahidi’s Patrick Meier on a range of issues around crisis mapping and validation.

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Want more info about Ushahidi? Here is more on the 4636 SMS emergency code being used in Haiti.

And this is a Forbes piece (11-08), Citizen Voices:  “A Kenyan blogger found a way to get information from the crowd. Now she wants to take the idea to other parts of the world in trouble.”

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Today, there are more than 3.3 billion mobile-phone subscriptions worldwide, which means that there are at least three billion people who don’t own cell phones, the bulk… found in Africa and Asia.                                                                                                                                                                                                  --Sara Corbett, author “Can the Cell Phone Help End Global Poverty?” (NYT)

I’ve been optimistic about the continued growth of mobile services in emerging regions, even through this downturn. If that happens, it’s good news for those who appreciate what connectivity is doing for new subscribers in the developing world. The nascent mobile sector is an enabling engine for other industries in the developing world notably health care, agriculture, banking, and goverment services.

We see continued growth in emerging markets where there are few fixed line communications, low mobile penetration rates, and the arrival of new, highly motivated operators. Look for continued double digit growth (CAGR). Revenue growth (ARPU) will likely lag subscriber growth as companies add more lower-income users. Despite a crowding market, prospects for for growth by incumbent and new operators remains strong so long as they manage their growth with an eye to the future.

The next big thing on the horizon are cheaper handsets that enable service for very low income subscribers.  Handset makers like Nokia are working on it, but reaching a critical, ”ultra low” price point is just out of reach. But we’re moving in the right direction.  Meanwhile, as service is steadily rolling out to areas that had no prior coverage, we’re glimpsing the rapid evolution of the service economy in developing markets.

Our regional partners and we see more promising opportunities for helping emerging mobile companies and other service providers to leverage smart technology, astute  management practices, and business analytics to operate efficiently and profitably.  That works for commerce, and it works for emerging consumers who yearn for something better.

For more on this subject, I recommend: Nokia researcher and behavioral designer Jan Chipchase’s TED talk(2007). He discusses insights he’s discovered about how people in developing regions use mobile technology.  He reminds us, “People want to be part of the conversation.”

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Ex Africa semper aliquid novi — Out of Africa always something new. ~Pliny the Elder

This week marks my company’s 3rd anniversary of working in Africa within our emerging markets service practice. Helping companies in the region to understand and serve the needs of their customers has been enriching on a personal level.  I’ve had the privilege of witnessing the growth of the sub-Sahara’s nascent service industry and I marvel at its favorable impact on a growing number of people in the region.

The ascendant mobile industry illustrates the point.  On a continent where few people have landlines due to the high cost of installing cabling, cell phones are bridging the communications gap. In many sub-Saharan markets, like Ghana where we work, mobile growth rates have been approaching 50% annually. While less than 20% have mobile phones now, hundreds of millions of Africans are expected to get handsets in the next few years. Keep in mind that this is a continent of almost a billion people. That’s a lot of potential new subscribers.

I’ve written about how people in emerging markets are using their new cell phones to perform essential functions like transferring money (m-banking). But mobile technology is connecting people in wondrous, new ways every day.  Local entrepreneurs are devising inventive means of helping people meet their needs. TradeNet, a company in Ghana, has developed an eBay-like site enabling buyers and sellers of agricultural products to post their needs and offerings using text messaging.  MPedigree, another Ghanaian venture, lets consumers check the serial numbers of malaria or other drugs to determine if they are legitimate, a pressing regional concern.

Mobile technology is a “disruptive force” that is quietly but inexorably changing the lives of Africans across all socio-economic strata. The industry employs thousands of workers, improving living standards and slowing the region’s talent drain. A recent London Business School study found that a 10% increase in mobile-phone penetration adds 0.6 percentage points to the economic growth rate.  According to Columbia University’s Jeffrey Sachs, “The cell phone is the single most transformative technology for development”.  It’s the region’s best hope for bridging the growing digital divide.

Make no mistake: the challenges of building on the early successes are steep. Despite inroads by equipment makers, handsets are still too pricey for people at the bottom of the pyramid who live on less than a couple dollars a day. Governments and companies must work more closely to make low cost handsets available to more people.  Telecom firms must invest in tools and practices to meet the growing needs of customers as their markets grow crowded with new competitors.   The mobile business is pushing Africa’s service industry forward rapidly.

There is growing uncertainty about how the global economic crisis will affect the region. While developing economies are tanking, analysts believe that regional GDP growth will slow but not recede. And, the region is expected  to bounce back sooner than developed nations.  While I’m not confident in analysts’ rosy predictions these days, I’d wager that we’ll see growth, albeit below the robust 5% rate the region has enjoyed in recent years.

When it comes to Africa, my rule is to always expect the unexpected.  Stability is something that people in the region don’t take for granted. In January, Ghana witnessed a peaceful transfer of power from one political party to another.  But memories of coups and tyranny are too recent and too close at hand to take stability for granted.

I genuinely enjoy working and spending time in the West Africa. It stimulates my mind, quells my restlessness and, at times, tries my patience. Often projects take longer to develop  than seems reasonable to a Westerner, and it’s imperative to figure that into any timetable.  But if you’re wired for adventure, it’s one of the most compelling business destinations on the globe.  I’ve had the pleasure of collaborating with some of the sharpest, most resourceful entrepreneurial minds I’ve ever encountered.  And, there’s nothing like the thrill of making things happen in a region where doing so has such a profound impact on people’s daily lives.  There’s nothing like that.

More on the impact of the mobile industry in Africa from BusinessWeek.

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03b, a Jersey Island (UK)-based company, announced that it is building 16 satellites that will enable lower-cost Internet accessibility over 3G and WiMax networks. These satellites will provide “trunking” or backhaul  coverage zone between +/- 40 degrees of latitude which blankets much of the world’s underserved regions including Latin America, the Middle East, Africa and South Asia.

Fiber cable and the labor for digging fiber trenches in underdeveloped countries is costly by any measure. Mobile operators face prohibitive costs in building transmission capacity between their networks and towers. Using satellites had been long been considered problematic due to their latency or the time it takes for a signal to travel between earth and satellites.

Today’s geosatellites orbit the earth at an altitude of 22,500 and their latency can exceed 600 milliseconds. By contrast, O3b plans to use MEO satellites which orbit the earth at 5,000 miles and can reduce latency to only 120 milliseconds—not that much more than a fiber network. 

O3b which expects to activate service by late 2010 intends to provide speeds of up to 10G bps (bits per second) to regions. The companies collectively invested about $65 million with the total cost estimated at $650 million.

This is good news for “3b” consumers, and probably a smart investment for Google which recognizes that the majority of the world isn’t currently using its services do to lack of access.  With their $10M investment, Google is getting in on the ground floor, so to speak.  Consider this another milestone in moving forward their Android initiative. 

Want more info?  Download this PRI (Public Radio) Podcast, Google to invest in internet start-up (4:30). 

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In my lifetime, conditions have grown immeasurably better, freer and more prosperous for a majority of humanity, yet hand-wringing about the miserable remains the reflex mode for most coverage of planet earth.

Nowhere more so than in Africa, from which I’d just returned when the e-mail landed. During a short stay in Ghana, which will hold free elections in December, Vodafone had bought a majority stake in Ghana Telecom for $900 million (entering a fiercely competitive mobile-phone market) and I’d heard much about 6 percent annual growth, spreading broadband and new high-end cacao ventures.

Accra, the capital, is buzzing. Russian hedge funds are investing. New construction abounds. Technology enables people in the capital to text money transfers via mobile phone to poor relatives in the bush.

I think most of Cohen’s points are well taken. He doesn’t mention the discovery of oil off Ghana’s coast and the country’s fiber projects or the investments being made by multinationals in the country’s business infrastructure.  The business climate in the region is improving, albeit in successive approximations.  The country’s services sector — chiefly teleco and financial services — are contributing to Ghana’s high annual growth rate.  Inflation is a growing concern, but so far it’s been manageable.  The process leading up to this December’s election should be interesting.  So far so good.

It’s also true that Africa’s success stories aren’t newsworthy to many news consumers.  We mostly hear about war, corruption, disease and rampant poverty.  On this point, I recommend Charlayne Hunter Gault’s “New News Out of Africa: Uncovering Africa’s Renaissance,” — it’s  chiefly about South Africa, but pertinent to the problem of media coverage across the continent.

If Ghana’s political environment remains stable and forward-looking, the country will be in a position to contribute even more of its stalwart intellectual capital to a “globalized” resource (R=G) community in the coming years.  So, even if the global media is fixated on the region’s challenges, the numbers will support a different story.  So look for Ghana and other gazelle nations of the sub-Sahara to lead the way.

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Here’s an interesting piece in Time (July 31, 2008), The Creative Capitalism Roundtable, featuring a conversation with Bill Gates, CK Prahalad and others sharing their views on creative capitalism and the Bottom of the Pyramid.  Their conversation led to a discussion of the telecom industry at the BoP:

 Stengel [Managing Editor - Time]: C.K., I know that Bill was influenced by, by your work, and one of the questions I have, and I guess it’s a question both about creative capitalism and how you see it, is that, when it comes to cell phones for Kenyan farmers for example, isn’t this just good old fashion capitalism in the sense that it’s a recognition of a market that people hadn’t figured out how to profit from, and now, and now they are.

Prahalad: I think it is, but there’s a twist to it, and I think it’s an important twist. If you look at traditionally how we have looked at all this product and services especially high-tech products like cell phones, we would never have gone to the poor. But, I think that growth opportunity is there, as the cell phones have demonstrated. Also, it is changing the asymmetry of information, be it the farmer, who can now get prices, weather conditions, or someone who can make small transactions with SMS messaging, suddenly the asymmetry of information which is the essence of poverty — that is why people are poor, they don’t have access to information — that is changing very, very dramatically. What is happening in the cell phone industry, three billion people are connected for the first time in human history, I think it will be four billion soon. That I think gives me tremendous confidence that we can really take Bill’s idea and see it through to its logical conclusion, which, for me, is how to democratize commerce.

Food for thought…

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How should businesses respond? We see exciting opportunities for companies to leapfrog the traditional approaches that firms in developed markets have struggled with in the past.  Firms that make the most of their business intelligence and continually seek out new ways to gain new insights about their performance and their customers should have the upper hand.

There’s no magic bullet. Ultimately, it boils down to getting the fundamentals right. Simplicity and agility are critical.  But companies that tighten up their business processes and align their people around a clear, customer-focused strategy can gain a serious competitive advantage.

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Imagine some of the most inspired and provocative writers, artists, scientists, business people, teachers and leaders – drawn from myriad fields, from across the country and from around the world – all gathered in a single place, ready to teach, speak, lead, question and answer – all interacting with an audience of thoughtful people, who have stepped back from their day-to-day routines to delve deeply into a world of ideas, thought and discussion.

I haven’t had a chance to sample many of the video clips yet. But one of the more enjoyable so far has been Walt Mossberg’s entertaining talk on The Future of the Internet and the Rise of the Cell Phone.  Among other things, he suggests the interesting, broader implications of the device “formerly known as the cell phone,” (aka smart phone).

Want more?  Visit Mossberg’s and partner, Kara Swisher’s informative site, AllThingsD. 

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