SEEING THE BIGGER PICTURE

A company’s licence to operate is not issued by governments, it is issued by the society in which a company operates, and to keep it you need to serve that society, says Bob Collymore.
Robert (Bob) Collymore
Chief Executive Officer
Safaricom
“Technology has given ordinary people, even people who are not your customers, a hell of an impact on your
brand. Technology takes power away from the corporates and puts it in the hands of the consumer.”
Bob Collymore

When Bob Collymore became CEO of Safaricom, people advised him to think about what his legacy should be. He was close to clueless.

“To be frank, I had no idea what it was going to be, but I believed – and still do – that a legacy should be something a bit more enduring and robust than simply increasing shareholder returns,” says Collymore.

So he urged the organization to look ahead, not just to the end of the quarter or next year but 20-30 years into the future. Moreover, he looked sideways at the small but revered group of companies that have been listed on, for example, the New York or London Stock Exchanges for decades. Only a few of the companies that were listed 60 to 100 years ago are still around, but in them he also found the 20-30-year outlook and a willingness to act accordingly.

“If you want to be around for 30 or 40 years, you have to be able to operate with that kind of time perspective. Of course, if you only care about surviving to the next financial year, you can take a short-term outlook. However, I suggest it is a much
better legacy for you and your successors to have a company which is running successfully 50 years from now rather than a company that delivers record results next year,” he says.

From that perspective, many things become apparent that you might not see in daily operations or in the race towards the next quarterly report. Like how markets – in Safaricom’s case, the telecommunications market – will develop more strongly if society also becomes more robust. And how that means that your real licence to operate does not stem from a deal made with governments or regulators, it is constantly being negotiated with a much broader group of stakeholders.

“Technology has given ordinary people, even people who are not your customers, a hell of an impact on your brand. You can go to the most remote part of Kenya and a person will be just two clicks away from the same amount of information as someone in Manhattan will have access to. Technology takes power away from the corporates and puts it in the hands of the consumer,” says Collymore.

At the same time, a new generation – the millennials – is entering society in force and has very different priorities. They do not want to be talked at; they want to be engaged in conversation and to co-create solutions. And they demand much greater accountability and transparency from the companies they engage with.

“What this means is that companies can no longer act with impunity or simply serve shareholders. They need to consider how they can be trustworthy and relevant  partners for multiple stakeholder groups,” he says.

Collymore has been the CEO of Safaricom since 2010. In his own words, the board of the company was looking for someone who saw the bigger picture of how business and society interact, especially in a challenging environment like that in Kenya.

“Honestly, they weren’t looking for someone who was massively competent in technology or marketing. They were looking for someone who could see that the purpose of this business is not merely to create a return on sales or on investment.
It is actually to have a positive impact on the societies in which we work. If you can do that, it makes a much better long-term market,” he says.

True to that strategy, Safaricom has gone beyond just being a mobile phone network. Its payment service, M-pesa, is the largest money transfer service in Kenya and has had a significant positive influence on the crime level by reducing the amount of cash in circulation. M-pesa has been exported to several African, Asian and  European countries. Later developments have added savings, loans and insurance services, making it a strong instrument for financial inclusion. This is all part of the understanding that great businesses need great societies in order to flourish.

However, that realization is not widespread – at least not yet. At the time of this interview, Collymore is planning to go on the annual investor roadshow in a few weeks. He will bring his financial report, of course, and his sustainability report
too, but he has little hopes that investors will spend much time on the latter.

“I bet you 80 to 85 per cent of them will not have read it. But they should, because since we stopped focusing so much on shareholder returns, they have actually risen,” he says. Safaricom shares used to be quoted at around 2.9 Kenyan Shillings and are now at 16, and that is also part of the good legacy.


WHAT’S NEXT?
NO GOING BACK

The move towards a greater focus on sustainability will grow and gain pace, believes Collymore. The logic for him is simple: it’s a one way street.

“Okay, I’m going to sound a bit arrogant here, but once you get it, once you understand that this is the way we need to do business, there’s no going back. When you have that “Aha”-experience, you can’t look back. It would be like trying to make
a wheel square,” says Collymore.