It was a sunny Wednesday afternoon, the day right after Nigeria’s 59tth Independence Day anniversary. As we finally got to the office, a beautiful receptionist welcomed us. Mr Okere was in a meeting, she told us with smiles, but he would be with us shortly. So, we sat and waited, all the while luxuriating in the ambience of a truly beautiful office environment.
It took over an hour before we could see the man. Apparently, he was having a really busy day meeting with some top executives from various organisations. As the Entrepreneur-In-Residence at Ausso Leadership Academy, Mr Okere occasionally has meetings like this where he teaches the secrets to scaling businesses and succeeding as entrepreneurs.
By the time we finally saw him that afternoon, he was headed towards the company’s cafeteria with the others for a lunch break, but as soon as he saw us waiting at the reception, he cancelled his lunch to attend to us. Nice as always, he apologised profusely for keeping us waiting. He also commended our efforts at Nairametrics because apparently, he likes what we do. And soon, we were climbing upstairs to another beautiful part of the office. Here, we would have the interview before he re-joined his other guests for the concluding part of their meeting for the day.
It’s really fascinating how the man is able to juggle all of his daily activities with such ease. Just the day before this interview, he was busy delivering a lecture on entrepreneurship at Pistis Hub for the Founders Conference 2019. And here he was, sitting before us and smiling, though we had just interrupted his lunch.
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So, we hit him with the questions
As the interview kicked off, we began by asking about the most topical issue at the moment – Nigeria’s Independence Day celebration. After 59 years of independence, did he agree with those who thought that we had nothing to show for it? Also, what was his opinion on the fact that many companies had collapsed since Nigeria’s 1960 independence?
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In answering the first part of the question, Mr Okere noted that it would be erroneous for anyone to believe that Nigeria had nothing to show for her 59-year old independence. However, this was not to claim that we had done so well and should be proud of ourselves, he clarified. He further analysed the situation thus:
“Perception is performance minus expectation. If the expectation is at a certain level and the performance is way lower than the expectation, then you have a negative perception. Because of Nigeria’s unique position and her many resources, the expectation is very high. The performance must, therefore, be equally high to measure up to the expectation in order that Nigeria may have a positive perception.”
In other words, Nigeria needs to try harder to improve. He also highlighted what other well-meaning Nigerians have complained about in the past about a few bad Nigerians giving the country a bad name with their deviant ways. As he explained it, this happened because the country had already failed to measure up to expectation. Therefore, when some Nigerians misbehave as they occasionally do, it rubs off negatively on the country’s image which is already tainted. But all these could change for the better if only the Nigerian Government could strive harder to change the narrative through positive developmental policies. Also, the Nigerian media industry should do a better work of telling better stories about the country, he urged.
His thoughts on collapsed companies
According to Okere, the issue of collapsed companies is not peculiar to Nigeria alone. As he explained, it is a global phenomenon which is backed up by statistics. Citing what he called the stages graph, the businessman explained that about a 100% of companies that start off at a certain time, in three to five years come to what we call the first brick wall. During this period, only 5% of entrepreneur businesses scale through into a phase of growth, meaning that 95% are not successful.
Over a ten-year period, the surviving 5% of companies will experience what he called the second brick wall. During this phase, there are skills that companies are expected to exhibit – skills like capability, positioning, product distribution, succession planning, etc. Any company that fails to exhibit these skills during this second brick wall is going to die. When a company passes through this second brick wall, it either advances to the growth stage or declines. Only 20% of them are able to get to this stage.
“I think the problem comes when a company has scaled the second brick wall. At this point, the corporate governance in such a company ought to have picked up in order to ensure that the business is insulated from imploding on itself. Unfortunately, governance in most companies tends to be weak. Therefore, they go through decline and suffer a slow but painful death.”
Meanwhile, in as much as company collapses are not unique to Nigeria alone, Okere did not excuse the role played by the Nigerian situation in causing the collapse of so many Nigerian companies. As he noted, the absence of basic infrastructure such as stable power supply is a good enough reason to kill off any business. Therefore, the government should take action by exploring ways to improve on the infrastructure (particularly electricity) as well as human resource development, for the sake of building a more sustainable and vibrant entrepreneurial and corporate environment.
Why he stepped down rather early as the head of CWG Plc
In 1991, Austin Okere founded CWG Plc. For many years, he served as the company’s Chief Executive Officer, nurturing it until it became one of the biggest ICT companies listed on the NSE. But in 2015, he chose to step down from this position for no apparent reason. We asked him why he made this decision and he shared his response:
“A lot of businesses that started off as startups become successful businesses once they cross the second brick wall and do the right things to go into advanced growth. Unfortunately, these same businesses are the biggest enemies of themselves apart of the governance issue I talked about earlier.
“There’s a certain optimum point that we have to understand. When a company starts off, the founder is the all in all, the most powerful, all-knowing person. He continues to hold the body of knowledge because he has the vision. But the company is the one that has the governance. So, over time, the founder’s power should come down as the company is picking up in terms of the governance. There is a certain optimum point the two should meet and at that optimum point, there’s always a good balance between the founder and the company. And if the founder decides to step down at that point, there will be other successive CEOs operating in that equilibrium.
“Unfortunately, if the founder delays way beyond when he is the most useful person in the company, the value of the company drops.” This happened because at that stage, the founder was not the right person to lead the company into the next growth phase, he explained.
His thoughts on current developments at the company he founded
Why then do a lot of founders refuse to step down even when they have outlived their relevance within their companies? Well, the reason is that they failed to develop other interests asides their interests in their companies, Okere explained. In his case, he ensured to develop other interests early on, interests along the lines of entrepreneurship, shared prosperity, and knowledge impartation. He has done this both at Ausso Leadership Academy which he founded in 2018, as well as on an international scale including stints as an adjunct faculty at the prestigious Columbia Business School, his role on the board of the Global Business School Network, and engagements with the World Economic Forum, amongst other important engagements.
At the moment, he only plays the role of Vice Chairman at CWG Plc. We asked him if he was impressed with the company’s current leadership and without hesitation, his answer was an emphatic yes. In his own words, “the current Group CEO of CWG Plc, Wale Adeyipo has been a very good find…a perfect fit,” who has facilitated geometric growth since he took over not too long ago.
His reaction to a recent fire incident at the company
Last month, there was a fire incident at one of the company’s facilities. We asked for an update, the extent of damage, and most especially if the incident could potentially affect the company’s overall performance by the end of 2019. In response, Okere said the incident was quite unfortunate. Luckily it happened at a storage facility and not within an operational facility. This, he implied, made the impact far less than what it could have been. Therefore, he did not think the incident would have any impact on the company’s finances.
Having said that, the businessman noted that infernos have now become a systemic problem in Nigeria because, “there is always one fire here or one fire there.” Note that on the same day the CWG fire incident happened, the head office of Nigeria’s Unity Bank Plc was also ablaze. Austin Okere believed there should be something that could be done to forestall these fires. Preventive measures such as fire drills and constant maintenance were important, he said. Therefore, the fire department should make it a priority.
We discussed CWG’s stock and its “BLS” status
So far in H1 2019, the company recorded a revenue of N3.9 billion as against N2.5 billion in H1 2018. Profit after tax for the H1 2019 period stood at N149.3 million as against a loss after tax of N25.3 million. So, business is doing relatively well this year. However, the NSE says the company’s stock is below listing standard. This is because as a company listed on the NSE’s mainboard, CWG is expected to have 20% free float but at the moment, it currently has 15.97% free float. This situation makes the company free float deficient. We asked he if could explain what this and he did by stating the following:
“The NSE listing conditions are clear, and the concessions conditions are also very clear. You mentioned that the company’s free float should be 20% but it’s currently 4% short. I think that there should be a dialogue between CWG and the NSE because CWG (the way we understood it), had met all requirements. There’s a bulk external owner (which is Abraaj Group) that owns 20%. So, in our minds, the free float was 16+20 which is 36%. But we’re told that the bulk holder does not count as a free float. And we said ‘that’s fine, we are happy to take further action towards diluting the other people that are already there.
“But if you know what the market has been doing, the market has not really been in a floatable state generally. And you don’t just do something for the sake of doing it; you do it because there’s value for all stakeholders. So, it’s not just to take a bulk, but to do it at the right time in order to maximise the value for all stakeholders.”
His thoughts on fintechs and tech entrepreneur’s recent pushback against police harassment
Away from CWG’s stock, Austin Okere talked about Nigeria’s growing fintech ecosystem. He was particularly glad about their emergence because they are here to shake up the Nigerian banking sector which, as he described it, was hitherto “a turgid system… a club that was difficult to join…” He went further to describe the banking industry as an old system which has become rather complacent over time.
He, therefore, implied that fintechs are here to change the game. For one, fintechs would go a long way in the effort to actualise financial inclusion, something the banking sector has not been able to accomplish despite many years. He also faulted banks for failing to provide adequate funding to the real sector of the economy, particularly SMEs. As he noted, CWG Plc was once a startup. If the company had been unable to access adequate funding to meet all its expansion needs, it may never have scaled up. So, banks should do better in terms of lending, else fintechs will beat them to that too.
He condemned the issue of growing police harassment of young tech talents which has become rampant recently. He also expressed his support for those that have come together to provide support to anyone that has been affected by the menace.
The role of Ausso Leadership Academy in building entrepreneurship
Note that the main reason why Austin Okere set up Ausso Leadership Academy is because of his belief that only Nigerians can come up with the right businesses that will succeed and help Nigeria actualise the economic freedom that it yearns for. According to him, when startups have the necessary skills and capacities needed to expand, they can create more jobs and by so doing, enable shared prosperity and economic inclusion.
How does this man relax, you ask?
Apparently, he derives joy in sharing quality time with his family. No matter what he does, he always ensures a balance whereby he finds time to be with his family. This is very important, he said, because anyone who fails to build a supportive and happy home where he/she can feel loved, will always be stressed. And stress is not a good thing for anyone.