Tag: business growth

Adewale Raji, is the eighth Group Managing Director/Chief Executive, Odu’a Investment Company Limited, a conglomerate with vast interest in real estate, manufacturing, hospitality, telecoms, agro-allied business, etc. In this no-holds-barred interview with Ibrahim Apekhade Yusuf he shares his vision to turnaround the fortunes of a once vibrant conglomerate. Excerpts:

As a conglomerate, what is the weight of the Odua Group of company in terms of finances?

If you look at it from the origin of the business itself, what you describe as Odua Group was founded in 1976 and in fact most of the companies have been around since 1950s. It was created as the business arm of the former Western Region Government extending up to Asaba in Delta State today and all the states of the southwest.

The focus of the founders was a very robust economy based on agriculture, social services and so on. As a result of the scope of what we inherited, you would find us with interest in financial services, insurance sector and some key sections of the economy including hospitality and manufacturing.

How much would you say the group is worth?

Normally with government owned enterprise it is usually difficult to make certain kinds of measurements. But I can tell you straightaway that we are a group that is sitting on an asset base of close to N80bn but it is more of a sleeping asset. The equity holding is less than N1bn. With that kind of asset base you expect a better turn over than what we currently have. We are still far away from where we should be.

The challenge of ownership is to some extent slowing things down. There is a difference between government and business are two different things. But irrespective of ownership business is meant to thrive and grow. With government, that kind of understand is usually very tough. Ownership is 100 per cent government – each of those five states own 20 per cent. The fact that it is not one state controlled is a huge opportunity for Odua Group to make bold inroads in the sector it operates.

To a large extent would you say this is responsible for the underperformance of some of the companies under the Group?

In fairness, that is the truth. It is the truth within the context of that one is the issue of leadership and direction and the other is the realisation of the purpose of the business by the shareholders. But if there is a proper alignment of both, there is no reason why the businesses would not do well. The misalignment between the ownership and purpose of business has really affected the fortunes of the company.

How has it been like overseeing the affairs of the Group this past one year?

My background says exactly the way I see things and what I want to do. I have a background in the private sector spanning over 27 years and rising to the position of sitting on the board of a multinational. When I was brought in, the mandate was clear and it was to deliver on set goals and transform the entire place.

What was critical for me was to understand what I met on the ground and what I met on the ground was surprising to me. There was a lot of money idling away. I found a situation where the purpose and mission was not really very clear to people. Coming from a background where objectives are defined annually, in terms of budget, wasn’t really easy. I couldn’t clearly see the purpose of the business even though there were huge expectations from those of us who are employees and we have to deliver. I met an organisation that was a business but was not operating from that perspective. That represented some challenge.

It wasn’t easy. In my previous environment, what we call budget is a ‘holy’ book where the performance indicators are well-defined. It is not our bosses that would tell us when we are succeeding; we would know ourselves when we are doing fine.

I understand and accept that this is not business as usual and that it is going to be tough to be able to bring about positive change. For every decision taken, we want to understand the processes involved. When we hit our targets, of course, there would be bonuses and certain benefits. Coming to an environment where the budget is not clearly defined, getting people to understand certain things, especially your vision for the business, can be tough. Like I tell people, if we must be in the big league, then we have to start doing things that people in those big leagues do.

What are your short-term, mid-term and long-term objectives and strategies for success?

Being relatively new in the company and with the kind of background I have, I think when you just put something on the table and say these are my strategies, people would say, perhaps, you have come to turn the place upside down and into what it is not.

What we have tried to do is simply engagement with people. What I have done this past one year is to try and convince my board and management staff that we should go into strategic retreat and try to create that vision together and see what it could look like. We asked ourselves a lot of questions and that started pricking our minds and got people beginning to key into what we are also looking at. Also people have to believe that what we set for ourselves we can accomplish.

We are called a conglomerate and if we are a conglomerate are we living up to that billing, we asked ourselves recently. On that basis, we crafted a new mission statement that said what we wanted to do was one, to be a leader in our chosen sectors and that we want to be delivering above par, in terms of growth and profitability.

The old mission statement of the company was that we want to be the ‘partner of choice’ but that is not inspiring enough. I look forward to an Odua Group in the future that when we check the performance and return on assets and equity, we would still be very proud.

So, the vision and mission was recreated to create the atmosphere for success. We are working very hard to get the company competing at all levels and also become one of the most preferred brands in the sectors we currently operate.

As a company limited by shareholders, what are the reaction of the shareholders to the current fortunes of the company?

The shareholders are the five state governments of the Southwest and the decision to recruit from outside is part of the manifestation of their dissatisfaction with what was on ground and that they expect a paradigm shift. I want to give kudos to them for that kind of decision. They have expectation and that is good returns for the business.

After our strategic retreat, the board came up with a three-digit growth target over the next five years. We are going for a 250 per cent growth in five years. We have shared our vision with our shareholders and that it would be a mix of the old and new. At this stage there is a belief but I think we need a reinforcement of that belief by starting to deliver on the expectations of the shareholders.

Are you planning on going public soon?

At this stage no because when you say you are going public, you are calling people to come participate in success. But before you can do that you need to create something that can convince everybody and raise their appetite. The decision to go public cannot be one for the management to take. Our biggest task now is to take the business to the next level. If we do that then maybe we can convince them into taking some decisions as regards the business.

The company has been having these past months. Maybe you want to shed more light on the issue?

As a result of the direction we want to go and my role in guiding that process to ensure it’s a team effort without abdicating the responsibility because at the end of the day the overall accountability lies with me as the chief executive. That is what brought the misunderstanding.

The truth about it is that we are into hospitality business and as we all know, the branded hotels are the ones who own the future in the industry in Nigeria because they command respect, have high standards and attract patronage.

As the chief executive of the Group, the overall accountability lies with me and that is why I need the backing of everybody including the board in whatever decision and direction I think would be best for the company. The board room mostly leans on democracy and sometimes democratic decisions are not business decisions. The wrangling came as a result of some of these issues but then it was a minor issue and we have moved on as a Group.

Is your appointment based on tenure?

Senior people in any management team would not take up roles that would not be defined by tenures. I was on the board of PZ Cussons for eight years, I had settled down so much there thinking I would retire there before coming to head Odua Group. My appointment is tenure based and it’s for five years.

In five years where would you want to leave the company?

I would take it from two levels, from the point of view of stakeholders. Let us talk about the shareholders; I want to see an organisation that shareholders would be happy with in terms of performance and returns, in terms of the dividends that they are receiving.

Apart from the shareholders, the second angle is to see all that the founders of the Group set out to achieve at its creation and which is to give equal opportunity to all and make it the pride of the entire region.

What steps are you taking to revive your interests in the hospitality sector?

We have all agreed that we want to see a sustainable hospitality business and when we look at the Lagos Airport Hotel and the rest, we are hoping to go through a transparent process to make sure that we have a recognised partner that we can work with. We have not chosen a partner yet but we are in the process already.

Most of the Group’s investments have largely been within the Southwest. Are looking at extending to other part of the federation and beyond the shores?

If you take a look at successful conglomerates in Nigeria today, you’ll realise that even though the products are nationwide, the point of manufacture is not. Take Unilever for example, their factories are in Agbara and Oregun but their products are everywhere.

That is the approach we want to take. We want to get to the level where we would start putting out national brands regardless of where they would be sited. We are also working very hard to become an international brand as well.

How would you assess the operating climate for businesses in Nigeria?

The truth about it is that the environment in Nigeria is not very favourable to manufacturers in Nigeria for so many reasons including power and government policies. But then there are businesses that have been surviving in Nigeria. While some could look at these as challenges, others see them as opportunities.

A lot of companies in Nigeria today use natural gas to generate their own power supply. For them, the cost of diesel and running generators is too outrageous. So, many of them now run their businesses with gas turbines and are doing very well. We have indeed seen people who have weathered the storm and overrode the tide to remain successfully in business in Nigeria today. There are opportunities in the economic climate more than the challenge, that’s how I see it.

Are you looking at introducing new products and services into the market soon?

The best companies in Nigeria are into manufacturing and I do believe that as a Group we also need to go back into manufacturing. What that means is that we need to go back to the era of creating brands. There is a lot of work going underground to get us back where we belong as far as the manufacturing sector is concerned.

To what extent has the management and employees of the company keyed into your vision for the organisation?

This is the key reason why engagement was part of the process from the time that I assumed leadership of the company. There is an acceptance by all that we can actually grow from where we currently are to where we want to be in the not too distant future. We also understand that we would require a mix of the old and new to get the desired result.

We need to acquire additional talents from outside. Talents attract every other thing and that is what we are looking for at the moment. We are strongly relying on ideas, finance and expertise. With those three things, we believe we would move mountains.

We are running an administration of inclusiveness. It is not just about the management but also about the employees as well. It is a way to make everybody responsible and make inputs to the type of success that we want to see very soon.

How do you motivate your staff? Do you apply the stick and carrot approach or something entirely different?

Nobody likes to talk about the stick; instead people are only interested in the carrot. What needs to be clear to people is what you stand for. It has a lot to do with ethics, integrity and professionalism. The moment people know what you stand for, they would naturally know how to relate and work with you.  So, inclusiveness has been very key in moving the company forward since I took over the leadership role.