Standing on the shoulders of giants

At Safaricom, there is Michael Joseph, the widely respected founder CEO and current board chair. Then came Bob Collymore after a decade, who kept building the superstar company to dizzying heights. At the turn of the firm’s third decade, the third CEO's search resulted in Peter Ndegwa – the man now charged with the task of taking East Africa's most successful business beyond the present horizons.

25 Oct 2020 . 364 Views

Anyone stepping into the slot behind the helm at Safaricom would automatically realise that the captain’s shoes are quite large.

They were made and first worn by the steely Michael Joseph, who, in the start-up days, had to walk downtown Nairobi with his band of employees and a bagful of gadgets and lines tied to his waist to help the first customers get started on the Safaricom network.

In one decade, the Safaricom team had built runaway success so much that when the time came for Michael to step down, Daily Nation’s business Editor of the day editorialised that his shoes were too big for his successor Bob Collymore to fill.

Rightly so, Michael laid the foundation with an initial goal to net 20,000 customers and sheer determination to make something out of a new business.

A decision to continually invest in the new network set a foundation for the company to grow beyond the founders’ wildest dreams. Coupled with game-changing decisions: introduction of per-second billing, low denomination airtime, subsidised phones, and the introduction of M-PESA seven years after. The recipe for next-level success was all set and polished.

“All the products and services we launched from day one, from October the 23rd in 2000, were pre-paid. You didn’t have to fill in a form. You just go into a shop and buy a SIM card. The phones were cheap. Even the billing system we charged per second not per minute because the people needed to pay for exactly what they used. All of those things contributed to the initial success of Safaricom,” Michael told Safaricom Newsroom.

Safaricom had become synonymous with Michael, the founder CEO described by the Daily Nation as “one hell of a manager due to his knack for doing the right thing for his firm at the wrong time for his rivals.

“The mood is quite sad here,” Michael told the Daily Nation as he stepped down from the CEO position. “Employees are a bit concerned but determined.”

As it turned out, they were dead wrong. Bob was destined to lead a decade of more trailblazing success and leading Safaricom to become Kenya’s first Ksh1 trillion company by stock exchange valuation.

Bob took over amid a vicious price war with Airtel giving the distant rival a fighting chance. The share price was sagging under the weight of the gathering storm, ebbing to an all-time low of Ksh2.55. Some market analysts had gone as far as suggesting that the sterling success Safaricom had enjoyed would come to an end.

“I took an early position that the price wars were not sustainable, and made a firm decision to strike the tricky balance between offering a competitive price to customers that would also enable us to earn a margin in order to continue to invest significantly in the network,” Bob would later say.

His leadership model was defined by the three Ps: Purpose, People, and Profits. He ensured that they would come in that order, to define Safaricom’s sustainability agenda and that no one in society was left behind.

“There is a new way of doing business,” Bob said. “The way businesses have conducted themselves for decades or centuries is now outdated. Plan A is not working anymore, because all we are seeing is climate degradation, human rights abuses, and corruption. We have to find a new way of doing business, and it starts by businesses saying that the primary purpose is not to generate profits.”

Bob would oversee a period of rapid growth for Safaricom and turn it into East Africa’s most profitable business. Under him, M-PESA grew from a payment platform to the backbone of Kenya’s economy. M-PESA’s contribution to Safaricom’s bottom-line grew to more than a third.

He would lead the company to become Kenya’s first Decacorn as the share price rose past the Ksh30 point. In Silicon Valley parlance, a Decacorn is a company valued at US$10 billion (Sh1 trillion); that is ten times the size of a Unicorn, which is a tech company valued at US$1 billion.

The avid reader and jazz enthusiast also oversaw investments by Safaricom in the arts in the form of the Safaricom International Jazz Festival and the Safaricom Youth Orchestra that would be some of the biggest calendar events in the entertainment scene.

The man who loved playing the saxophone would also personally take charge and implement changes to payments made to musicians whose music was on Skiza, the service that offers ring-back tunes. With Skiza, said David “Nameless” Mathenge, artistes now get access to more than 17 million when their songs are released.

“When it started, piracy was killing us, but at least with Skiza, we have a fighting chance,” he told Nation recently.
Beyond arts, Safaricom continued its sponsorship of major sporting activities and events such as the Safaricom Sevens series.

Internally, Bob spearheaded diversity and inclusion efforts in the company to become a strategic area of focus in the business. To date, gender distribution at Safaricom stands at 51% women and 49% men whilst in management we have 35% female and 65% male.

To ensure no one is left behind, there are 131 staff with various disabilities including neurodiversity (dyslexic, autistic etc). This translated to 2.4% of the staff population. Out of this, 53% are female and 47% are male.

During Bob’s tenure, programs such as the Discover Graduate Program (targeting youth), Women in Technology and Women in Leadership programmes were launched to grow the representation of women in technology and leadership respectively.

At close to seven months as CEO, Peter Ndegwa pays tribute to his predecessors and to oversee Safaricom’s transformation into a technology company that goes beyond connectivity and M-PESA, the money transfer and payment platform.

“There is a real sense of responsibility to build on the foundation the company has had. This is a unique brand, a ubiquitous organization, and a household name. I need to enable us to take it to the next decade or two,” he added.
“I feel the sense of responsibility but also I need to be myself. I need to lead as Peter Ndegwa,” he answered.

Part of his leadership is grounded on the vision to continue to be a purpose-led organization, transforming lives and to be customer obsessed.

“We want to be a purpose-led technology company, but the foundation of that is to be customer-obsessed. I believe, and I have worked in business for a long time, that it’s only by looking after our customers, anticipating their needs, serving them well that we can truly be a sustainable business,” said Peter.

The ambition, he said, is to make Safaricom the regional benchmark in customer experience across the region in the next five years.

In effect, the CEO said, Safaricom will be looking to maintain its focus on purpose and become a technology company, building on the foundation set by Michael and the late Bob.

Safaricom will continue with FOR YOU, the brand promise to be more simple, transparent, and honest with its customers launched by Michael in October 2019.

“Safaricom is like this child that you brought up. Now I think they are graduated from the university, now they are going out into the world. I think that’s where we are with Safaricom,” said Joseph.

For M-PESA, whose introduction into the market was overseen by Michael, this means going beyond Kenya’s borders and making it the payment platform of choice across Africa.

At home in Kenya, Safaricom has set up M-PESA for business, dubbed Pochi la Biashara, whose target is Micro, Small, and Medium Enterprises (MSMEs), which employ a majority of the workforce. Pochi la Biashara is intended to enable business owners to separate their personal and business mobile wallets and prevent the reversal of transfers by unscrupulous customers.

There will also be more investments in health, education, and agriculture.
In agriculture, this will focus on innovations such as DigiFarm, the platform launched in 2017 targeting smallholder farmers with information on affordable inputs, e-extension services, and access to markets and insurance.

“DigiFarm was set up with the vision that we have today. What is different today is that now, agriculture and health will be central to our future. We’ll put investments, prioritise resources, and so on and forth,” said Peter.

DigiFarm currently has 1.3 million farmers on the platform. It is now active in 16 counties in the Western, Nyanza, Rift Valley, Eastern, and Central regions.

In education, Safaricom supports Shupavu291, which enables students to access tuition materials on phones. The company also offered data bundles at subsidized costs to enable learners to access e-learning during the Covid-19 pandemic.

Taking office while the country was dealing with a pandemic was undoubtedly not the ideal situation for Peter. However, he has also had plenty of time to assess the task ahead and to arrive at the clarity of the vision needed to go beyond the present horizons.

“We are 20 years old. We want to be here 100 years from now,” Peter said.

This story is part of the Safaricom@20 celebrations. For 20 years, Safaricom has developed new technologies and innovations to support and enable Kenyans to communicate, connect, and go beyond.

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