Bob Collymore: The joy and pain of running Safaricom

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When Mr Bob Collymore received a call to become the CEO of Safaricom, his first instinct was to seek advice from people he trusted.

At the time, Mr Collymore, who turned 58 on Friday, was the head of Corporate Affairs for Vodacom based in South Africa, a position that had exposed him to doing business across Africa. He had also gained considerable experience as a board member of Safaricom.

His first call was to his good friend Mr Peter Matlare, a man who had cut his teeth in the corporate world and had since risen to become the CEO of Tiger Brands, one of Africa’s leading consumer goods companies.

“Peter told me, ‘just be yourself; don’t try and pretend to be anybody else because if you start acting you’ll get tired very quickly’,” Mr Collymore told Lifestyle in an interview last week.

That assurance must have been at the back of his mind when he made his next call to Ms Nonkululeko Merina Cheryl Nyembezi-Heita, a woman who had climbed the corporate ladder to the very top of Arcelor Mittal South Africa, a leading global steel manufacturer.

Ms Nyembezi-Heita, popularly known as Nku, had vast experience in finance, telecommunications, steel and mining.

“Nku, a young black woman running a steel company in South Africa – that was tough. Her advice was simple: deal with people issues, don’t drag it on,” Mr Collymore said.

That somewhat dovetailed into the third piece of advice that came from Mr Michael Joseph, the man who had nurtured Safaricom from a fledgling company in the year 2000 to the regional technology giant that he was about to hand over to Mr Collymore.

SAFARICOM 2.0

“Joseph told me, just make decisions. Even if you make wrong decisions, which I can guarantee you will, just make decisions,” he said.

Mr Joseph assured Mr Collymore he had lived by that principle during his career, and in particular during the heady and uncertain earlier days when Safaricom was a new company, whose future few, except perhaps the converted, could fathom.

In 2000, when Vodafone was bidding for a mobile licence, the company did not expect to sell more than 50,000 lines in Kenya. To his surprise, Mr Joseph would go ahead and break growth records for any Kenyan company in under a decade after making a series of contrarian decisions. When Mr Collymore spoke to him, he had nothing but words of support and encouragement.

“He told me: ‘I am always here to support you, don’t worry’. That was a comforting thing to hear, coming from the guy who helped build Safaricom —  saying that he would be there and he was not going to let me fail,” said Mr Collymore of the transition that gave him the final impetus to take on the challenge.

There was a prevailing sentiment then that Safaricom had matured. A series of regulatory actions had sparked a devastating price war that reduced mobile call rates by 75 per cent. In 2010, just as Mr Collymore’s appointment was being announced, the Indian telecoms giant Bharti Airtel was negotiating to buy Zain Africa for Sh1 trillion ($1 billion). The plan by the Indian operator was to hammer Safaricom to the ground. Investors too had taken a grim view of the company’s prospects and they had sold Safaricom’s shares on the Nairobi Stock Exchange (now Nairobi Securities Exchange) to the point where the company was now half the value it had been listed two years earlier in one of Kenya’s largest and most publicised initial public offering of shares.

The business growth had plateaued, and many pundits argued – wrongly, it turned out – that the mobile telephone market was saturated.

“At the time I was coming in, many people thought this is not really the right time to join a company like this because it can only go down from here but I did not find that very daunting. I said, ‘let me come and do the job and see how we will get on with it’,” Mr Collymore said.

As a veteran of mature mobile markets, Mr Collymore could have been tempted to agree with those who doubted the growth of the sector in Kenya, but for a foreign manager who had been charged with integrating the acquisition of J-Phone into Vodafone Group, he had witnessed firsthand how technology innovation and massive investment in broadband internet had helped revolutionise the Japanese mobile phone and internet markets, he knew better than that. He saw a business with immense growth opportunities, with some offtakes from existing business in addition to some completely new investments that would push the business to the next level.

He devised a plan that he called Safaricom 2.0 that would serve as a blueprint for the next phase of growth for the company. The plan revolved around reorganising key managers and business units around key customers that the company would be wooing — including small business owners, ordinary folks, big firms and the well-to-do, who were mostly corporate managers.

The number of subscribers had reached 13.5 million, with 21,000 agents scattered in every corner of the country. In the six years that Collymore has been at the helm, the number of subscribers has almost doubled to 26 million served by more than 100,000 agents.

PRICE WARS

The company has tripled financial access levels in the country from 20 per cent to over 60 per cent and growing. From the simple “Send Money Home” service that it was initially envisaged as, it has become a banking tool for millions of Kenyans who have never entered a bank – enabling them to save and borrow – and become a key cog in the economy’s wheel.

Last year, Safaricom contributed almost Sh414 billion to the country’s Gross Domestic Product, while M-Pesa has been credited with lifting 800,000 people from poverty, according to management consulting firm KPMG and a recent study authored by Ms Tavneet Suri, an associate professor of applied economics at Massachusetts Institute of Technology, and Mr William Jack, an assistant professor of Economics at Georgetown University in the US.

Mr Collymore says that heading a company that is growing exponentially has taught him critical lessons.

“It’s been a huge learning experience,” he says on matters technical, marketing and at the psychological level while coping with the challenges of maintaining growth.

“We have had our ups and downs but this has been typical of the 16 years of Safaricom,” says Mr Collymore.

He is a firm believer in tapping the expertise and experience of those who work with him: it is people who run businesses, he believes, not the billions sunk in them in investments.

“You know, there is a kind of a myth around CEOs. A lot of CEO decisions are team decisions and the biggest decisions that I make are about the people that I hire. If you hire the right people then the rest of the operational decisions become relatively easy,” says Mr Collymore.

It has not been smooth sailing though for the man at the top, but the occasional turbulence comes with the territory.

“Mistakes have been made,” admits Mr Collymore, adding that what matters are the lessons one takes away from these mistakes, and using these lessons to strengthen the company.

One of his earliest challenges was engaging competitors in a price war, in what would have certainly been a race to the bottom for all the players had Safaricom not taken a step back and re-assessed its long and short-term benefits of acquiring customers “at whatever cost”.

Mr Collymore had hardly settled in his new job when the brutal price war broke out, sending call prices tumbling by at least 50 per cent and, in some cases, by as much as 75 per cent.

“We were in the middle of a price war that was bringing the whole industry down,” says Collymore.

He had to make the tough call; either hunt with the wolves or run with the hares. If he chose to stay with the cut-throat competition, he risked the very future of the successful company he had taken over. Even the whole industry ran the risk of bleeding money to death. If he took the big bold step to raise the prices back to the levels that made business sense, he risked losing customers – but, on the flip side, this would put the business back on track to push the sustainable business model he had found.

“I know consumers at the time liked it. I mean consumers would like it if everything was free but we have other responsibilities to our shareholders and to the industry as a whole,” he says.

BAD CALLS

To stop the industry spiraling down into a dramatic catastrophe, Mr Collymore decided to increase prices.

“That was one tough decision,” he says. But it paid off handsomely as the company was able to build reserves for which to build the company that it has now become.

Securing the future, he says, was the reason for the price increase and other industry players quietly stopped the price war and followed suit away from the limelight. Since then, the company has made huge investments to grow the business, leading to the rapid growth.

“Our next phase was putting fibre in the ground or putting fibre on poles to serve connected customers because we really do believe in democratisation of data,” he says.

Over the last six years, Safaricom has invested about Sh30 billion a year in improving and expanding its network which now covers about 95 per cent of the population.

It has been a story of bold decisions that appeared nutty at the time but which have been vindicated by time.

“My predecessor took some bold decisions on 3G at a time when people were saying there is no market for 3G in Kenya. I believe that there is demand for 4G, and we continue to invest heavily,” he says.

The company has close to 1,000 4G stations today and, recently, paid out $25 million (Sh2.5 billion) to the Communications Authority for a 4G licence, he says.

He readily admits to making decisions that didn’t turn out too well.

“We have made some bad calls as well (like) when we offered unlimited internet, despite all the experiences that we had with more mature markets. That was not just going to work but still we did it,” Mr Collymore says.

At the time, a good number of subscribers must have suffered from what sociologists refer to as the “buffet mentality”; eat all you can, and some more, because it’s readily available.

“One of the things that we have always been good at is admitting our mistakes and moving on. So we admitted it was a mistake and we told people why we were going to stop the unlimited data,” says Mr Collymore.

The company was also late in building the fibre network, a decision that should have been made earlier but wasn’t, but Mr Collymore sees mistakes as learning opportunities.

“We should have taken a decision early to put fibre in the ground or overhead. I think we are a little bit late in bringing that to the market but we are trying to fix it now,” he says.

Mr Collymore says that in business – as in life – mistakes are bound to happen but what matters is how we come out of it.

“We try to focus on learning than regretting because regret is a negative thing, while learning is a positive thing. So whenever you make a mistake, even if it is in your personal life, you make a mistake and you think, okay, that was probably not the smartest thing to do,” he says.

But even when you get things right, he adds, it is always important to go and look back and ask, “why did I get that right?”

“A lot of people do not do that, because sometimes it can just be luck and if you walk with the wrong assumptions, you are going to make big mistakes in the future. When an airplane crashes, the first thing we must do is look for the black box. So, it’s important to stop and search for that black box, you know. And the reason you look for that black box is to see what went wrong and why it went wrong so that you can fix it. At all costs, go and find the black box,” he offers.

From Guyana to Nairobi

Robert William Collymore was never born with a silver spoon in his mouth. In his own words, Bob started earning at the age of 12 while still living with his grandmother in Guyana. He would make art pieces from plasticine moulds sent to him by his mother who was then in the UK.

He remembers his grandmother fondly: “I was always a bright child but I was always a lazy child. I’ve said that my grandmother spoilt me and made me get away with things I shouldn’t have done.”

He would also make little brooches from coconut shells and from these art pieces for sale.

However, he landed his first “real” job when he was 16 when he worked in a department store in the UK, where he would report to work at 6 am to open and would be the last to leave after sweeping and locking up.

He says that this job taught him some of the valuable lessons that have propelled him to his current role.

He moved to the UK to join his mother in 1974, where he completed his formal education. He continued to practise art this time as a painter.

However, his mother insisted that he gets a formal job, and used her networks to get him a position at the British Telecom.

And, in the last five years, Mr Collymore has been the force behind taking M-Pesa, the world’s most successful mobile money deployment, to scale.

And he loves being in Kenya and leading Safaricom.

“I wouldn’t voluntarily leave unless the board fires me or my time is up,” he says.

He was appointed to his current position in October 2010, although he had been sitting on the company’s board before while he served as the Governance Director for Africa at Vodafone.

Besides his job as CEO, Bob is a leading socio-economic commentator on the continent.

He is very passionate about corporate responsibility and has demonstrated a keen interest in causes relating to maternal health and diabetes through the work of the Safaricom and M-Pesa foundations.

He sits on the United Nations Global Compact Board, which champions the need for corporates to embrace sustainability in all their practices.

He is also known for his love for flying helicopters, art and jazz music. He also loves reading and cricket. He is a good listener, and always credits his staff base of more than 4,000 for the exploits that have placed Safaricom on top of its league.

Mr Collymore married Wambui Kamiru at an invitation-only purple-and white-themed ceremony in Nairobi last April.

His wife is the founder of The Art Space. According to her blog, The Art Space is an independent commercial art gallery situated on Riverside Drive in Nairobi.

The Guyanese born Mr Collymore was in 2012 awarded the Moran of the Burning Spear (MBS).

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My five favourite books and songs

WHAT I’M READING:

Reclaiming Conversations, by Sherry Turkle: This may sound like a paradox given my line of business, but I’m really worried about our society’s growing dependence on their technology. Are we losing the art of conversation?

Homo Deus – A Brief History of Tomorrow, by Yuval Noah Harari: This very readable book combines history, theology, technology and genetics to take you on a wild ride into our future. The conclusion? Our challenges as a species are just beginning.

The Inevitable, by Kevin Kelly: Very thought provoking look into the forces that are driving our future. What will we think? How will we make decisions? This book expanded my sense of wonder about the awesome power of technology.

The 3rd Chimpanzee, by Jared Diamond: You may be seeing a theme here… I like books that provoke thought into what drives trends. This is my current read. It’s all about our history as humans as well as how we are evolving and it’s fascinating stuff. Did you know our DNA is separated from a chimpanzee’s by just 2%? And are we still evolving?

Leadership in the Age of Rage, by Umair Haque: Another one of my favourite topics at this time. All of the world, our leaders are failing us – and yet how do we move forward when we need them more than ever? What can the effective leader do to regain trust? If I was to recommend just one book to our politicians this election year, this would be it.

WHAT I’M LISTENING TO:

Joey Alexander – Countdown: Unbelievable piano genius from a 14-year-old. He sends shivers down my back every time I hear him. My wish for the year? To have him play at our Safaricom International Jazz Festival.

Arun Ghosh – A South Asian Suite: Arun is a brilliant British Jazz artist who is one of the artistes joining us at this year’s Jazz Festival in February. This Indo-Jazz album is my current go-to for happy music.

Miles Davies – Autumn Leaves: A classic Jazz artist on one of his most iconic tracks. A good one for the unwind.

Nina Simone – I Want a Little Sugar in My Bowl: One of my all time favourite artists. It takes me back to my early days as a kid trying to grow up in Britain when I was starting to explore music.

Sauti Sol – Kuliko Jana: My list would not be complete without these young men who make me so proud. They take their craft seriously and they’re making waves globally. I’d just be happier if they would buy new clothes that don’t have holes in them or are so tight.

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Career Path

  • January 1978 – July 1994: Various Management Roles at British Telecom
  • 1994 to 1998: Purchasing Director for Dixons Stores Group, the largest electrical retailer in the UK
  • December 1998 – July 2000: Handset Purchasing Director, Vodafone UK
  • July 2000 – April 2003: Global Handset Purchasing Director, Vodafone Group
  • April 2003 – April 2006: Marketing Director, Asia, Vodafone Group
  • September 2006 – February 2009: Governance Director, Africa, Vodafone
  • February 2009 – September 2010: Chief Officer Corporate Affairs, Vodacom
  • September 2010 – Present: CEO at Safaricom

 

-nation.co.ke