Out of Africa: How Dalberg is reshaping global consultancy

Last week, Dalberg Global Advisors, a development consulting firm with offices in Nairobi, Johannesburg, Mumbai, New York, Washington DC, Geneva, Santiago, San Francisco, and Copenhagen, appointed Mr James Macharia, 33, as its Group Managing Partner.

He now joins the ranks of young Kenyan professionals taking over the leadership of global firms.

As Mr Macharia tells Business Daily’s Michael Omondi, it has been an exciting journey moving from a global managing consulting giant to help bring a successful start up off the ground in Africa.

Tell us about yourself, your involvement with Dalberg Global Advisors in Africa and how you moved from McKinsey to set up shop on the continent?

I first decided to get into management consulting right after finishing my undergraduate studies at Harvard University. At that time, I was fairly sure that I wanted to work in some sort of development organization, but I felt that I needed to build some skills and familiarity with the private sector.

McKinsey, with its reputation and track record, therefore made a lot of sense as a place to start my career.

While there, I quickly learnt that I really enjoyed the challenge of developing original analysis and the excitement of debating different ideas with my colleagues as we worked towards recommendations.

What I was lacking was a sense of passion for some of the questions we were answering, which seemed very far removed from the reality I had grown up with, and so I began to reach out to development organizations, and businesses working in Africa, even though I feared that I would miss the consulting approach.

A colleague then put me in touch with Dalberg’s founder, who had also left McKinsey looking to do work in development, and was setting up a firm that would combine rigorous private sector analytical tools with a commitment to only doing work that positively affected development.  

At the time it seemed like a dream come true and I jumped at the opportunity without really thinking about how hard it would be to adjust from being in a massive global firm where every system and process was in place, to being in a start-up where we still did not even have office space.

Fortunately, we were able to get past the first few challenging years, and managed to attract a lot of like-minded people who wanted to work at a firm that really focused on the issues facing developing countries.

By 2006, the New York office was stable and established, and we had successfully entered several other US and European locations.  

I had always felt that the long term goal for me would be to work in Africa, and so I approached my colleagues with the idea of setting up offices on the continent.

They agreed, and after spending 5 years helping build a start-up in New York, I found myself starting from scratch with 2 new colleagues and an empty office.  

How is the firm positioned now in Africa in comparison to traditional global management consulting firms operating on the continent, and what kind of projects have you been handling?

We have been quite successful at growing the firm across Africa and now have thriving teams in Johannesburg, Nairobi and Dakar. We were actually surprised by how few consulting firms  have more than one or two offices on the continent.  

Those that do, typically act as separate operations in each country whereas we are very much a single integrated team. As a result, we are often one of the few firms that can really offer a fully global perspective to our clients.  

Today, our work in Africa covers a number of categories and has had us deploying teams to almost 30 countries on the continent.  

We provide a lot of advice on organizational reforms and strategies for governments and international organizations such as the UN and African development bank. We also work with investors and companies interested in opportunities on the continent, where we are often one of the few firms that can provide true knowledge of market conditions, potential partners and appropriate strategies.  

I think there is an interesting change happening where development organizations are realizing that the private sector is the key to transforming Africa, while companies are also realizing that the biggest opportunities will be found in addressing the types of needs that were typically considered the responsibility of the public sector.  

We of course believe that we are uniquely positioned to help both sides work better together in ways that impact society and also generate profitable opportunities

Which projects has the firm worked on that you would say have had a big impact in terms of development outcomes on the continent and around the world?

That is always a tricky question at Dalberg, since different people are very passionate about different parts of what we do.  

However, some of my own favourites include our work on the design and implementation of the Affordable Facility for Medicines –malaria (AMFm).

This is a subsidy for effective malaria drugs which we did for the Gates Foundation and the World Bank. Our team worked with governments as well as with the manufacturers and distributors of these critical medicines to see how some changes in the market could result in price reductions of upto 80 per cent for malaria sufferers around the world.  

The program we helped design is now in place and is actively saving lives across Africa, including Kenya where the first consignment of drugs was recently delivered.

More recently, we have been working in Haiti on a strategy for economic recovery as that island recovers from its recent earthquake. We have literally had over 20 Dalberg team members from around the world, staying in tents and advising the government and private sector leaders on how to revitalize the country through investments in health, agriculture and energy among others. This work will influence how over $10 billion in projected public and private investments will be directed through the economy.

Closer to home, Dalberg has helped a leading local corporate foundation to partner with international donors to deliver scholarships and other programs worth over $15 million to disadvantaged and deserving young people around the country.

If we take a longer term perspective, I actually think that some of the work we are doing in advising investors and corporations on strategies for entering and growing in African markets will ultimately be the most important aspect of our work.

Traditionally, we have seen major development agencies like the World Bank and UNDP using their in-house expertise to provide solutions to pressing development problems in Africa, what created the room for the entry of firms like Dalberg on the scene? To what extent would you say that there is significant outsourced consulting work to attract and sustain global consulting firms in small markets like Africa?

I would question whether Africa is in fact a small market. The reality is that development agencies are coming to the same conclusions as corporations, which is that Africa presents vast opportunities for new ways of thinking, and they simply don’t have the in-house capacity to tackle every issue, or even to engage with different kinds of stakeholders.

Our value proposition is less about outsourcing work that could be done internally, and more about applying a set of tools and a mindset that is different from business as usual. Everywhere we have worked on the continent, we have found that people are hungry for this kind of support and are a bit tired of the old consulting model where retired officials were paid some amount to come and tell you how they used to do things, or worse yet, consulting firms came in, wrote a report based on their experience in Europe or the US and left it at that.

To succeed in Africa as a professional adviser, I believe you now need a combination of new insights, an ability to translate those insights into specific decisions and a good sense of what it takes to practically implement the advice you are giving.

What unique advantage do firms like yours bring to the table in understanding development problems?

I think our unique advantage is something about our diversity and the quality of our people.

Today, Dalberg employs top professionals from more than 30 countries, all of whom have outstanding educational and professional backgrounds, but more importantly, all of them are passionately committed to thinking about development issues.  

We learnt early on, that hiring an outstanding Oxford graduate who did not really care about development did not get us anywhere as those people tended to deliver text-book outputs for clients. Instead, we have tried to focus on finding those high achievers who are excited about the potential of developing countries often because they are from there, or have spent time there.

That, combined with the fact that we have built teams across the developing world, means that we are able to deliver advice that is not just based on one perspective, but is coming from several informed and intelligent points of view.

In this economic environment, how easy is it to attract enough experienced consultants to a niche firm like Dalberg? Can you meet the demand for consultants? Which is your biggest market?

Attracting the best talent is never easy, since everyone knows who the stars are and works hard to attract them.  

In our case, as we have grown, we have seen the group of people we attract get more diverse. In addition to people like myself, who join after spending time with big global consulting firms, we now have some people coming in from other professional services fields such as investment banking.  We are also hiring more fresh graduates at the Bachelors and Masters level.    

For those that we try to recruit, our value proposition is simply about giving them a chance to apply their skills to questions that will actually meaningfully change people’s lives. Over time this has become an easier sell as the Dalberg brand has become one that people at world’s leading business schools and policy schools recognize.  

I also think that the current generation of professionals are looking for ways to combine a sense of mission, with a challenging and entrepreneurial career which is exactly what we try to provide.  

One of my big priorities, is to see us recruit a bigger proportion of our consultants from among top students of universities in the countries where we operate.  

In terms of demand, I think that thanks to our focus on development, a lot of the firm’s work tends to happen in Africa or focus on Africa even when clients are based in the US, Europe or Asia.

It is no coincidence that Africa has been our fastest growing region over the last 3 years, although it looks like our Asia team is now challenging for that title.

In terms of subject areas, we have seen rapid expansion in opportunities around agriculture, energy and financial services, while health remains a big and steady agenda item.  

Finally we are rapidly approaching a point where companies or organizations overtake the public sector as our biggest client.

Where do you see the future of development consulting in the world going and what has Dalberg’s experience working in Haiti taught you?

I think that the dialogue around development and the role of consultants is changing quickly. We are seeing people shift from a purely donor/recipient mindset to one where investment and entrepreneurship play a much bigger role in addressing every development challenge.  

The development consultant of the future needs to be able to work as readily with government, business and the social sector to design integrated solutions that ultimately pay for themselves.  

In Haiti we saw how important it was to get local entrepreneurs and investors aligned with the strategy that was emerging, since ultimately they would need to do a lot of the work of actually transforming the economy and creating jobs.  

At the same time, we had to show them that there was more opportunity for sustained long term growth from partnering responsibly with government and civil society to ensure that their products and services were feeding into healthy growing communities.

It is about business realizing that they have to be creative about models and practices that better their communities while generating profit.

How are your teams organized, how you approach problem solving?

We typically deploy teams of 3-5 Dalberg consultants led by a partner to serve a client. Often, our teams are drawn from multiple offices based on the expertise they bring or the client’s need for a presence in multiple locations.

We also draw from a distinguished panel of expert advisors that include leading academics and former senior officials who can add some specific technical expertise or experience to our team.

For example, on a recent engagement to map the market for solar lighting in Africa, we had a team jointly lead by partners in Nairobi and Mumbai, and a team that also included staff from Senegal and some external experts to help evaluate the technology.  

Ultimately we were able to deliver findings that combined very practical views of the markets in numerous African countries, with a state of the art view of the technology side of things as well as insights into business models that had succeeded in India.

What do you see as your central leadership challenge taking over from the founder? Where do you see Dalberg in 2020?

I expect that my most interesting challenge will be maintaining our firm as a truly global organization that is equally relevant in every country where we operate.

Virtually every other firm we compete with, defines some part of the world as its “headquarters” and the rest as subsidiaries which is very different from how we see things.  

I know it will not be easy to strike the balance between tailoring ourselves to very different environments while maintaining the strong shared culture and values that have brought us this far.  But, I think I am coming into the role at a very exciting time when we literally have gone from one desk and a handful of people to a real international platform.  

I firmly believe that 2020 will see Dalberg firmly established as the world’s leading advocate for a sustainable and integrated approach to the challenges of business, government and the social sector.

I would also like us to continue to provide a different type of platform for people looking to have careers in international development, by helping our staff build skills and then step into other roles outside Dalberg when appropriate.  

I would be tremendously proud if in 10 years time we could point to some of the most entrepreneurial CEOs, inspirational NGO heads, dynamic political leaders and effective development officials and say that they honed many of their skills while working at Dalberg.