The Group Managing Director of Dangote Industries Limited, Olakunle Alake has hinged success of business organisations on the adoption and implementation of effective stakeholders’ management strategies.
Speaking on ‘Stakeholder Management: The CEO’s Role’, at the
Global CEO-Africa Programme, a collaboration by the Lagos Business school, IESE
Business School, Barcelona and Strathmore University, Nairobi on Friday, Alake
identified effective management of all stakeholders as a critical factor to
achieving an organisation’s aims on the global business landscape.
He urged CEOs who are determined to succeed to as a matter
of urgency identify stakeholders who are critical to the success of the
organisation and start engaging them. Alake listed these stakeholders to
include: owners/investors, government officials, regulatory bodies, consumers,
staff, distributors, and host communities.
The Dangote Group helmsman, while tasking the CEOs, said;
“Put together a team to handle stakeholder relations; the
team should include people with adequate international exposure and people with
local exposure. Also, determine and know what the critical stakeholders want;
and, more importantly, know what they do not want.”
“Most importantly, you must be seen to align with local
policies, and the country’s aspirations. This builds a healthy relationship as
well as provides a feedback mechanism. It also provides market intelligence.
Also, constantly interact with your stakeholders.”
He defined stakeholder management as the process of
organising, monitoring, managing and improving relationships with people who
have vested interest in the business or organisation.
“Stakeholders have vested interest in the organisations as
they depend on them to fulfill their personal goals. Staff depend on business
organisations for their wages; suppliers for businesses and contracts;
communities for life-changing projects, and government agencies for taxes and
revenues”, he added.
Alake stated that effective stakeholder management strategy
helps develop and maintain relationships with all parties, mitigate risks,
align business goals and eliminate delays.
He said; “Activities of stakeholders, whether as staff,
government functionaries, tax authorities, regulatory bodies, customers,
distributors or suppliers have a lot of impact on the organization.”
“Their activities can promote and sustain the organisation.
In the same manner, their activities can pull down the organisation. For
example, if an organisation is having a running battle with the tax
authorities, it is possible that some sections of the media will pick the story
that the organisation is avoiding tax. Civil Society organisations may decide
to picket the organisation and cause a loss in customer base.”
Speaking on how the Dangote Group has been able to manage
both internal and external stakeholders across Africa, Alake explained that the
company consistently interfaces with stakeholders across diverse cultural
backgrounds in all its areas of operation.
He disclosed that the company has operations in Congo,
Ethiopia, Zambia, Tanzania, Cameroon, Senegal, South Africa, Ghana and Sierra
Leone;
“Construction is ongoing in several other countries. We have
adopted strategies to enable us manage the diversity in regulation, labour,
regulation, tax regime and legal system across all our areas of operation”, he
added.
He advised CEOs to expect diversity in regulations in its
effort to manage stakeholders;
“We have seen that stakeholders in different countries have
expectations of what the Group should do or offer but the expectations differ
from country to country. Hence, the approach to meeting expectations in each
country is different and tailor-made for the country. We relate with
stakeholders in the countries where we operate and try to meet their
expectations.”
“For example, the expectations of a stakeholder in the
Dangote Sugar fields of Numan differs from the expectation of a stakeholder in
Dangote Cement, Ndola, Zambia. We have a multi-cultural workforce, with our
staff drawn from all over the world. Our multicultural workforce is our
strength. The issue of employment is very sensitive. Some countries insist on
locals and certain ratios for employment. We are sensitive to these issues and
fast track the development of locals to bridge the skills gap. In all, we have
been able to effectively manage all our stakeholders in all our areas of
operation.”
Speaking further, he explained; “As a conglomerate, we have
drawn lessons from operating in countries and subject to different legal and
social/cultural jurisdictions. We have had experiences where some Francophone
countries insist on using paper bagging for cement products, while in some
other countries, they allow for use of polymer bags.”
“In a number of countries, there are weighbridges and
additional cost for heavy trucks. In addition, a number of countries insist on
transporting a percentage of heavy cargo by rail or penalties are incurred if
this is breached.”
“In Ethiopia, a cross-section of the stakeholders (youths)
are insisting on ownership of mineral resources in their community and want
companies to pay them for raw materials extracted. Also, land tenure system
differs, with the government, traditional rulers and individuals in control in
different countries.”
He, therefore, charged the CEOs to play the role of
balancing all expectations/interests of the various stakeholders in other to
achieve a win-win situation.
Alake concluded the discussion by commending the
collaborative effort of the three great institutions for using the CEOs’ forum
to bring together talents and experts who have a firsthand experience of
navigating through the continent’s business terrain to share their experience.
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