Executives in Africa were delighted to be back at AFSIC this year, as Gold Sponsors of this leading Africa Investment Conference. It was exciting to see so many new businesses there looking for investment to back their exciting new ventures, ranging from electric vehicles for cleaner logistics solutions, through to innovative media businesses and start up banks.
When considering buying into a business, most investors invest huge amounts of time and money doing extensive due diligence.
At Executives in Africa, we were keen to get a core message across this year, something we think is a critical element to any investment decision;
‘We believe your Leaders are Your Ultimate Investment’
In addition to having a great product or service, investors typically consider a wide range of factors which they believe will influence the potential return on investment such as;
- Sector and market potential
- Alignment to the existing portfolio/investment criteria
- The stability of the region, local economy, and government
- Liquidity – is the currency easy to exchange, does the business need to import raw materials?
- The current Management Team (often founders/owners and the family)
- Ease of exit and expected time to achieve growth
Whilst all the above are all vital elements to consider and it is important to do thorough due diligence, we believe that, with the right leader, these risks can be mitigated and managed ensuring the business not only survives but also thrives, delivering the returns you need from your investment.
Presenting at AFSIC, Richard Putley, co-Founder of Executives in Africa, gave a great example of the impact a good leader can make;
Back in 2015 we identified a CEO for a Private Equity portfolio business based in Nigeria. This business was operating in a consumer market with an almost like for like competitor. Both were challenged by the availability of imported raw materials and access to foreign currency and needed to navigate a significant devaluation in the Naira amongst other things.
The CEO EiA placed in this role impacted this business by:
- Implementing a bold increase in pricing which enabled the business to remain profitable and moved them from 2nd in the market, to becoming a market leader.
- Improving their Environmental, Social, and Governance impact, including establishing an independent Whistle blowing, becoming ABC Compliant, and being of the 1st Nigerian companies to receive International IMS ISO Accreditation.
- Establishing an extensive training programme including a Graduate Training Scheme and putting key Managers through a company MBA in association with Lagos Business School.
- Driving the business to become an employer of choice enabling them to attract great talent at every level.
This impactful leadership led to the organisation being recognised by the London Stock Exchange as a Company to Inspire Africa in both 2017 and 2019.
The cost of getting the CEO appointment wrong would have been disastrous for the organisation that invested in this business but ended up more than paying for itself over the life cycle of your investment in your business.
So, if the Leader you appoint to run your business can be make or break for that business,
What should you be doing to ensure you get that hire right first time?
Listen to Richard’s full 20-minute presentation from AFSIC on why we believe ‘Your Leaders are Your Ultimate Investment’ to pick up critical tips you can immediately introduce to your hiring process.
Alternatively, either Richard or Sarah FitzMorris, co-Founders of Executives in Africa, would be pleased to take you through how you can outsource this critical due diligence process to experts in the field. Contact us at firstname.lastname@example.org or email@example.com