Why Do Top Companies Across Key Sectors in Nigeria So Often Fail To Retain Key Salaried “Intrepreneurs” Beyond Five Years?

A couple of things started me thinking today about Nigerian Medium-Large and Large Companies (for want of a better description). I don’t want to put an EBITDA, Net-worth or employee head-count scale on it because they vary so much from sector to sector, and the challenges in the Nigerian Market are not the same as companies of the same value in many other markets globally.

The first thing was, I read a LinkedIn post by Ayodeji Balogun, CEO of AFEX Commodities Exchange. This post made references to McKinsey and Company,  and a Harvard Business Review article of 2017, which in turn references a PWC report of 2014.

A quote from  this HBR the article states:

‘The chief executive role is a tough one to fill. From 2000 to 2013, about a quarter of the CEO departures in the Fortune 500 were involuntary, according to the Conference Board. The fallout from these dismissals can be staggering: Forced turnover at the top costs shareholders an estimated $112 billion in lost market value annually, a 2014 PwC study of the world’s 2,500 largest companies showed. Those figures are discouraging for directors who have the hard task of anointing CEOs—and daunting to any leader aspiring to the C-suite. Clearly, many otherwise capable leaders and boards are getting something wrong. The question is, what?’

The next thing I began to think about is my own ‘LinkedIn’ community. This generally contains the top 3-5 individuals by salary, who are in different executive leadership roles in Nigeria based companies that cross a range of sectors in my career ‘spectrum’

Core Sectors would be various FMCG Manufacturing Sectors, Ingredients and Raw Materials, Engineering Services,  Telecommunications, Data Transport/Storage Infrastructure Providers, ISP/Tier 1 Peering, Renewable/Alternative Energy.

These people generally are not direct sources of opportunity for me, but often yield signposts which are prospects to my next ‘piece of bread and butter’.

High churn in this very important part of my network generates a lot of (unpaid) work for me. Keeping it current is critical.  When I come off the opportunity trail, contacts with these signposts often translate to business prospects or strategic partnerships with my client or employer.

So if one of them chooses to, or is caused to move on, I will notice. I will also have intimate grasp of trends as a collective phenomenon.

Some key players have perceived trends in lead talent sourcing for the Nigerian Market, both inside and outside of Africa.  Perception of talent outside of Africa tends to separate Developed Market Talent Sourcing –  US, Canada, Europe, Australia, New Zealand for example, from Emerging Market Talent Sourcing  – India, Brazil, Pakistan and the Middle-East for example.

Then there are Foreign Africans, versus Indigenous Talent.

Many postulated that cost is a factor.

Nevertheless, a recent article by Prof Ndubuisi Ekekwe, which detailed the top ten or so, salaried leaders in Nigeria, illustrates that the group has individuals reflective of ALL of these sourcing strategies!

While there may be slants to and away from one strategy or the other, there is a uniform problem with these post-holders having a shelf life exceeding five years, unless an executive investor.

Human Resources is generally one of the lowest cost centres in manufacturing and infrastructure-intensive business. It is important that Nigerian Medium-Large and Large Companies concentrate cost-saving exercises on areas where they will make most impact on Cost of Production – namely ingredients, raw materials, production consumables and spare parts subject to short replacement cycles.

As for the top 3-5 Human Assets by cost, the impact on the fortunes of the company will be on the added value they bring to the table, not on whether they saved, or paid a premium of 10 million naira per year on the contract.

These are the people that are brought in and paid a salary to lead a company, and its people on Innovation, Transformation, Repositioning, Diversification,  Acquisition, Strategic Down-sizing and other types of major change as part of a continuous process of Corporate Evolution in dynamic cycles of CONTINOUS IMPROVEMENT.

These are the ground breaking ‘Intrepreneurs’ and the Project Champions of the company’s  most defining projects.

Continuity here is a currency for stability.

Yesterday, I just bade a ‘good luck for the future’ message to one of Prof Ndubuisi Ekekwes’ mentions.

So:

WHY DO TOP COMPANIES  ACROSS KEY SECTORS IN NIGERIA SO OFTEN FAIL TO RETAIN KEY SALARIED ‘INTREPRENEURS’ BEYOND FIVE YEARS?