Interview with Tony Elumelu

Tony Elumelu was the winner of our African Business Icon. He is someone we have followed closely since his meteoric rise to become one of Nigeria’s pre-eminent bankers. Today he is fighting on many fronts and is positioning himself and his company as champions of Africa, by pushing through long-term investment in the continent and […]


Tony Elumelu was the winner of our African Business Icon. He is someone we have followed closely since his meteoric rise to become one of Nigeria’s pre-eminent bankers. Today he is fighting on many fronts and is positioning himself and his company as champions of Africa, by pushing through long-term investment in the continent and also trying to drive competitiveness and entrepreneurship. Talking to his lieutenants, you hear them speak of a man driven, with a workaholic’s schedule, who expects a similar ethic from them. When we sat down with Tony Elumelu – or TOE, as he’s affectionately referred to in the workplace – on a Sunday afternoon in New York during the UN General Assembly meetings, he was finishing a meeting with three CEOs of different divisions within his group, and immediately after our meeting he was joined by Michael Porter, the Harvard management professor, a superstar in the world of business education, known for his expertise in competitiveness and company strategy.

Q | What is your management style and to what do you attribute your success?
I believe a lot that corporate success comes with assembling the right people, motivating them and realising that the boss alone cannot deliver everything. The first thing I did, and I continue to do, is to assemble the right team and make sure they are well motivated, make sure they understand the vision and ensure that resources are provided that will enable those actually involved to push it through.
I also think that something that I do very well is my reaction response time to my executives. It is always good for a leader to come back quickly to his executives with a yes or no position. Where you are undecided about an issue, there are times you might need to reflect, you say, “I will get back to you”.
I think that helped a lot, especially at the initial stage when we had fewer branches, fewer people, so I was able almost to intervene directly. But as you get bigger, it gets more difficult to do so, so you need to now rely on your apostles.
As I promote people to leadership positions, I try to make sure I promote people, not just those who have general competencies, but rather people who understand my DNA, how I do things. That helped to further drive the growth.  
Also it is about articulating a vision and making sure people understand it. If people understand the vision, the destination, the direction, they are better able to support you to realise it. In that way, we were able to carry everyone along and that helped us to rise quickly.

Q | What is your management DNA?
Most of my core lieutenants not only understand my DNA, they have elements of my DNA either by association or by their own background and development. Let me read you an email I sent to one of my managers today.
“I would like you to do the following things going forward;
You should make yourself personally available to your respective teams;
You should have an open and accessible door to all kinds of people. To cancel the booking of appointments to see you, it’s not good: people who are staff, people working, should have relatively easy access to you;
You should read all memos that are sent to you carefully and advise decisions promptly;
You should ensure that your turnaround time is best in class;
Remember that leadership is not about pushing people, it is about reading and understanding them, processing your thoughts and making decisions in a clear and unambiguous manner. It is about prompt, well-thought-out reaction.”
I sent out this memo just a few hours ago but it tells you how seemingly little things make a lot of sense to me. This attention to detail has helped us grow. These are sorts of things that have kept us firmly apart from the majority of companies.

Q |The principles of leadership and management appear to be important to you.
Principles of leadership and management will tell you so much, but there are some ideas that I hold dear. The first thing is not about having the best strategy, it is about having the right people. When you have the right people you get things done.
It is not just about principles of leadership and management. It is about the significance and uniqueness of having the right people work with you – people who understand your vision, people who buy into your vision, people who have the DNA that you have, who like to approach issues the way you approach issues.
You realise that just because you run a big organisation, you alone cannot make things happen. You need to have people who are like you planted in key places. It is not just about technical competencies alone, it is about the ability to do things. It’s about response time.
People need to be guided, directed, pointed in the right direction on time. There should be no ambiguity about how you guide and direct your people. They need to know the destination, they even need to know how to identify the destination when they get there, and they need to know what to do to get there. Organisations that do this well succeed.
Just three days ago, we had an all-day session on how to measure performance. I sat in from beginning to the end. That underscores to me the importance of people. It is not just a cliché. But I am also tough on people. I am a disciplinarian. There are things I don’t accept, and that is what helps me to shape and groom the right DNA in the people I work with. With me, every member of staff or colleague is a friend, but at the same time we know the boundaries we don’t cross.

Q | Do you consider yourself a hands-on manager?
To a large extent. I operate from some point of experience. At times I push some people and say, “Have you run a business?”. Leadership is situational. What is important is to make sure you have right apostles who understand how you approach issues and business, and put them in key strategic positions so that they are happy to continue to enforce that.

Q | Did you have a mentor and was he important to you? I hear that Hakeem Bello-Osagie was an important influence in our life.
Hakeem is a great man but he is not my mentor. I was fortunate to work under Chief Eitimi Banigo. He was my CEO after I left postgraduate school and I learnt a lot from him. Much of what I do today, I learnt from him, the rest I have learnt from experience and from seeing and analysing why organisations have not performed so well.
I believe a lot in mentoring people, because for Africa in particular we need leaders, entrepreneurs, good public sector leaders, good private sector leaders. We believe that with the right leadership, the continent can deliver progress. Each one of us who has managed to achieve a discernible success in business should be involved in mentoring others. It is not just about what I am doing, it is the ability to galvanise and support other leaders who have succeeded to take it on, to help, to mentor others. Recently some of our staff – ex-staff and current staff – have been appointed to key leadership positions across Africa. That is a significant way of making sure we contribute to the people of our continent.

Q | You run different businesses across different sectors, as well as your foundation, banking group and investment groups. Is there a common thread, a common goal? 
There is a common thread. First, we have Heirs Holdings as a holding company, that is a proprietary investment company and we invest in key sectors [financial services, healthcare, power, agribusiness, hospitality and real estate].
We invest in these sectors not just because of the economic opportunities but because of the ability of these sectors to impact on humanity, to make life better for people.
In the area of power, we make money but we also impact society by unleashing the hidden potential of Africa because of lack of electricity, lack of power – in agriculture, the same thing. Our investment model is one that combines economic prosperity, profitability and social impact.

Q | But is there a specific philosophy, a model, behind your investment decisions and your philanthropy, for example? 
We believe in the philosophy of Africapitalism, the intersection of business and impact, fundamental and profound impact.
Africapitalism is a philosophy that believes the private sector has a key role to play in the development of Africa through long-term investments that create economic prosperity and social worth. What the Foundation preaches is about entrepreneurship. The Foundation believes that the private sector has a role to play in developing Africa. The Foundation believes, just like I do, that the public sector has a key role to play in creating the enabling environment for the private sector to do well.
What we are doing in the four business areas is to show that we are not just preachers, we are actually practitioners who are practising what we preach.

Q | But the philanthropic side is to develop leaders, to develop human capital, to develop entrepreneurs?
Those are means to an end. The end point is to make sure that we help to develop Africa. We believe in impact investing, we believe in helping to create institutions that will help those who have business ideas. We believe in mentoring, we believe in creating a network and platform for people who are entrepreneurs. Overall, it is for the support of the Africapitalism philosophy that we hold. Everything we do is about how to empower the private sector entrepreneurs.

Q | What are your thoughts on private equity? 
Different economies, at different phases of their economic development and growth, need different approaches. For Africa, at this point in time, I think it is about long-term investing and that again speaks to the philosophy of Africapitalism.
Africa will need investment in key sectors that can help improve the economy and these are not sectors you move into in three years, four years and then you look for an exit.
The power plant we have just invested in, it took us one to two years to revamp and stabilise current net generation. It will take us three to six, seven years to increase the generation capacity.
When we invested in banking in 1997, we didn’t invest for the short term. We invested for the long run and that is why, in fact, when we invested there were 101 staff and today it has over 25,000 staff. This is part of the benefits you get when you invest long term. Africa needs long-term investment and not short term at this point in time.

Q | Do you think business, governments and associations are doing enough to increase collaboration between different African countries?
African leaders must realise that the private sector is good for development and they should work together to make sure that an enabling environment is created, not just in one country but across the continent. They should realise that it would be to our advantage as a continent if we were able to operate at the same level even without being a common union. I see collaboration amongst the African leaders, especially the leading African countries. That is one thing that will help bring this quickly.
Imagine if the Presidents of Nigeria, South Africa and Ghana went to the AU to address them and to call for mass action for creating a friendly private sector environment and set up a peer-review mechanism that would enable them to assess each other and rank themselves. It would help significantly.
African leaders should share their experience. For instance, what is happening in Nigeria with power privatisation is such  a significant move by an African government and should not end in Nigeria.
The President or leader should be able to share their experience with other African leaders. It will convince them that this is the way to go. State-owned enterprises must give way to private sector businesses; the inefficiency of the state-owned enterprises does not aid or support development.
We need the private sector. We need African countries that have done this work to share their experience with others so that peer support and peer pressure will help motivate.

Q | Would you say that private sector competitiveness is being hindered or slowed down by government at the moment?
I wouldn’t say hindered. I think they’ve made significant progress in the area of competitiveness of the respective economies, but we can do better.
There is significant room for improvement, but African leaders need to know what is required to make this happen – and that is where the private sector has a key role to play.
That is also where our development partners have a key role to play. We need to let them understand that there is a direct correlation between the success of the private sector and the success of the entire society. They will then use the private sector success as a parameter for success in their associated economies.

Q | And is this dialogue happening between government and business?
It does need to happen. Initially, you had private sector business leaders in Africa living off government and government patronage. You are now beginning to see private sector people who are empowered by the market, so that they can fairly engage the government and say, “If we do this, this will happen, but you need to also see the importance of the private sector”.
If you look at the telecommunications space, which was controlled across the country, we didn’t make much progress in making information available to all.
But today governments across Africa have seen what the GSM revolution has done, so they are encouraged to let the private sector participate and play in the key state enterprises that were controlled by government. That is why, for instance, it has been privatised in Nigeria, so even the masses would see who had this socialist mentality of state-controlled enterprises. But now people have seen that life is better when the private sector takes over some enterprises.
In Nigeria people know the power sector needs to change and now the private sector has got involved – not just the private sector, Transcorp – there is a strong belief that things will get better.

Q | And what has frustrated you the most in terms of achieving your goal?
The environment – but also it does not necessarily frustrate us, because we believe the R in our acronym is ‘resilience’. In business, especially in the developing world, you need to be very resilient to survive. We recognised that and we have internalised it as one of our core values, something that drives us. It is not just about what discourages us, it is about the challenges that we face in doing business. The challenges are things such as the competitiveness of the African economies – making African economies competitive so that we can do business well and also be able to compete with our foreign counterparts.
I have said to people that if you succeed as a manager in Africa, then you succeed as a global manager of other developed markets. It is tough, it is improving, but we still have room to grow. We all must want to get at the media, yourselves, our development partners, international governments, the African business leaders, the private sector. All must work together and we must sit with government for government to begin to know what they need to do to unleash the private sector.
Most importantly, they must know that a private sector is the barometer of the society and that the private sector, as encapsulated in the concept and philosophy of Africapitalism, is key for the long-term development of the continent, because the private sector makes long-term investments and that has been demonstrated.

Q | What can banks do to reduce the interest rates for entrepreneurs?
I think the question of banking is best answered by bankers. But from an investor’s perspective, what I have always said is important is, first, availability and, second, if your competitive environment is right, interest rates will even out, because there is still room for significant value creation in almost all the sectors in the African economy.

Q | What is a typical day in the life of Tony Elumelu?
My schedule is usually very busy because of our different interests. But you have to balance spiritual and physical wellbeing with domestic family responsibilities and with your business and with social relationships.

Q | Are there any issues that keep you awake at night other than jet lag?
Interestingly, jet lag doesn’t keep me awake. Anywhere I find myself, I sleep normally. We are driven, there are so many things we would like to do to help in making our contribution towards the development of Africa, keeping in view our philosophy – which is: you do well, you do good. It is not just about doing well and doing good, it is about sustainability.
I keep thinking about how to buildwto last. I think about how to make significant impact. I think about there is so much I want to do. For instance, I want to set up a fertiliser plant, a chemical plant, so I keep thinking how to make it happen quickly. Those are things I think about, nothing keeps me up at night.  I thank God for that contentment.

Q | The message I seem to get is that it is all about Africa. Is that right, and how are you going about it?
We are invested in 22 African countries. In all the businesses we run or we have invested in or funded, the intent is usually in three parts. First, stabilise or grow the business locally, in the country. Second, to grow within Africa, because Africa is a key market. Third, the intent is always how do we integrate the business with the rest of the world.
We followed this path for our financial services, beginning from Nigeria and expanding regionally. We are following this path again with Transcorp, with a $2.5bn Power Africa commitment. We start from our base and we spread out.
We are trying to create infrastructure for agriculture business and the commodity exchange that we set up is in Rwanda.

Q | And the secret of your success is?
Your research is spot on about my position, or the way I interact with the people I work with. I believe that great institutions are built through people and I am committed to doing so with the calibre of the people we have assembled. I keep ensuring I have the right people at all times. I am involved with recruitment because I know the importance of people. I also participate in ensuring that we share the right vision and everybody understands the vision. So whatever we have achieved, especially this award by African Business magazine, is dedicated to the Africapitalists who work within the organisation, who are associates of our respective organisations.

Q | Hence your friendship with management gurus such as Professor Porter?
Now you begin to understand. We need to keep bouncing ideas off creative people like that, great thinkers, and making sure we cross the ideas with our practical experience.

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