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Why demand for turnaround CEOs is at all-time peak

L-R: Jubilee Insurance group CEO Julius Kipng'etich, Safaricom HR director Paul Kasimu, Eddie Ndichu, Opera's vice president for Fintech Africa and Perminus Wainaina, chief executive at Corporate Staffing Services. FILE PHOTOS | NMG
L-R: Jubilee Insurance group CEO Julius Kipng'etich, Safaricom HR director Paul Kasimu, Eddie Ndichu, Opera's vice president for Fintech Africa and Perminus Wainaina, chief executive at Corporate Staffing Services. FILE PHOTOS | NMG 

Corporate Kenya has recently seen some top executives exiting one company and walk into another, almost immediately.

Some kind of professional revolving door but only for a small pool of executives.

This group, some of who have since branded themselves as turnaround artists, has had a mix of fortunes in delivering the promises, forcing them to jump ship only so soon.
The list includes Julius Kipng’etich, who exited Kenya Wildlife Service as director and joined Equity Bank #ticker:EQTY in 2012 as chief operating officer before moving to Uchumi Supermarkets #ticker:UCHM as CEO.

He recently left Uchumi to join Jubilee Insurance #ticker:JUB as group CEO.

Eddie Ndichu was recently appointed Opera vice president for Fintech Africa from KCB Group.

The appointment came only a few years after he moved to KCB from Chase Bank. He was previously based at StanChart Bank #ticker:SCBK before moving to Chase Bank.

To put this trend in context, we sought out the views of Perminus Wainaina, chief executive at Corporate Staffing Services — a human resource consultancy in Nairobi.

Here are the excerpts:

Why are we having the same executives moving from one company to another?

Because of their leadership and managerial skills and their ability to deliver results.

They also have strong personal branding in the sense that they are not afraid to engage the media and maximise on every opportunity to ‘sell’ themselves.

These faces are also sought after in order to bring new and fresh ideas on board.

When a company sees the success attributed to a manager such as Mr Ndichu during his stay at KCB, they will want to know what he is doing differently and how the same underpinnings can be applied to their company.

Equity Bank, for instance, poached Mr Kipng’etich from KWS based on his track record while there and his ability as a strategist, factors that catapulted KWS into a corporate-like agency, despite being a State corporation.

Besides, these top managers have branded themselves as change agents.

When they join an organisation and it performs well (regardless of their input), the success is attributed to them making them highly sought out individuals.

There’s also the global trend where organisations opt for the tried and tested or proven managers.

Think of Sheryl Sandberg, who was originally at Google and is now at Facebook.

Does this mean the talent pool at the top is small and ever shrinking?

Having being an HR consultant to Kenya’s medium-sized and large organisations for the last decade, I can attest from an HR point of view that top management roles are a reserve of few.

This can be exemplified by the migration of the same managers and CEOs from one company to another.

These vastly experienced professionals are highly sought after hence their ability to move.

This trend offers insights into the fact that while there are plenty of managers and chief executives working for varied companies in Kenya, only a few have a sustained track record of success.

And it is not only at the CEO level.

Case in point being the current HR director at Safaricom #ticker:SCOM, Paul Kasimu, who was at Kenya Airways, moved to EABL and is now at Safaricom.

Such managers are paid handsomely. Is this justified regardless of whether or not they manage to turn around the fortunes of ailing firms? Several have failed to do so.

The question of whether these top managers are justified in earning millions of shillings whether they deliver or not should be put in perspective.

For instance, if you hire a top criminal lawyer in Kenya to defend you on charges of aggravated assault, he/she should go above and out of his way to put up the best defence.

This would involve comprehensive gathering of data inclusive of exhibits, testimonies, audio and visual evidence.

Assume even after so doing, he loses the case and you are jailed. Are his dues payable as hefty as they may be? The answer is yes, because he did his part.

Similarly, one can argue that these executives deserve their salaries  because a legal agreement pertaining work, salary and benefits has already been signed prior.

If the company feels they are spending too much income on a manager with little to no returns, the option of termination is also valid.

But even then this comes with the burden of severance pay. So the key is to do due diligence prior to hiring and be open to any eventuality.

What challenges do these top managers likely to experience in their operations?

Professionally, they are bombarded with the never ending challenges of ethical dilemmas. Top managers have been faced with ethical impasses, especially in a country such as ours where corruption has taken root.

The decision to do what is right vis-a-vis what powerful shareholders want is a puzzle for most managers.

Another challenge is burnout due to the pressure to deliver under strict deadlines.
Social-wise, such top managers have limited time with their families because work has overtaken their lives.

And of course the timeless challenge of picking the right people into your team. There is always the challenge of making the cut — which employee goes and which one stays.

It’s no surprise then that some end up experiencing a decline in health and emotional well-being, especially in the absence of a support system like friends and understanding family members.

Another curious observation is that most companies are tapping outsiders to head companies as opposed to insiders. Why?

Kenyan companies are tapping managers from other organisations because the outsourced executive has the advantage of neutrality and objectivity in making decisions that will impact the company positively.

They basically come in as a third and objective eye. And make the tough decisions without bias such as firing redundant staff.

Moreover, with the outsider taking over, the temptation for internal influence in critical decision-making matters is greatly reduced.

The outsider manager or CEO is exempt to office politicking and rivalry that would influence his or her decisions and strategies.

They are also outsourced to bring in fresh ideas that are almost unconventional to the culture of that company and also make decisions pertaining departments and goals and how they are contributing or hindering company progress.

That is not to say, however, that organisations cannot nurture their own managers, who would successfully steer the company.

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