By: Olufemi AWOYEMI, FCA
Lagos, Nigeria
June 12, 2007
 

The President/Chief Executive, Transnational Corporation Plc, Mr. Tom Iseghohi, recently at a parley with journalists in Lagos; assured the company’s shareholders of bumper dividends in the year ahead.

He promised to reward those who have bought into the company. “We are going to improve the returns on investments of the over 250,000 Nigerians that have bought into the company”.

Obviously Tom Iseghohi, a well accomplished and highly regarded professional of international repute, who recently resumed as the CEO of the corporation, means well and has the pedigree to appreciate and tackle the issues.

Though he said he had presented a transformation plan before the board of the company, which covers the big picture that includes ceding of some of its stakes to international investors; the mood of the shareholders may not change much.

His enthusiasm was clear for all to see and while not holding brief for the shareholders, we believe we have a stake in the enterprise as a project.

Thus, Tom may want to consider the following points in tandem with his obviously well thought out ‘plans’:

1. He needs to quit the talk about Transcorp being “a platform and terrific vehicle that can impact positively on the economy” and “I am optimistic that the company will drive the GDP to $400bn”. It is a well worn-out cliché that has been over-flogged and frankly speaking, irritating. Fact is that it is closely related to the sad past and ‘emotional’ stigma associated to the brand. In its place he can put actual product and services on the table as evidence of the firm’s relevance and value-chain being used by real people in the market which might actually help people to appreciate the possibilities he seeks to visualise. The Transcorp Hilton Hotel at Abuja might, at this moment, represent the only flagship of the company with revenue growth potentials which can be touted. The rest appear more like conjectures, while the NITEL issue presents nothing more than a fiasco with its unstable leadership and actual drop in lines compared to less-capitalised players in its market.

2. Transcorp in some ways is reminiscent of Nigeria where instability, leadership challenges, incoherence of governance standards & financial strategy and the visible lack of disciplined execution fritter away a great deal of the country’s opportunity and momentum. The saddest point is the over-arching influence of politics over policy. Tom might want to look at the reality of the company’s inorganic creation and attempt to fix the missed ploughing, planting and watering seasons.

3. A viable group exists as an aggregate of parts which in itself, is an entity worthy of standing alone. The self-delusion that Transcorp is a big behemoth is as grand as the expectation that it would solve the nation’s problems. No one company should set itself up for such standards for which it has no control over the building blocks of. The antecedents of such a venture makes it clear that Transcorp’s journey towards being a ‘Cheabol’ has missed some very important stops/signposts. It needs to redress the situation by actually having accountable officers acting as Managing Directors of its component parts/key operations with mandates to deliver on goals and objectives. This will mean re-aligning power blocs in its management team.

4. There can be no company without an empowered support cast. Tom as the Group CEO has to build his first team to reflect his vision of the company from here-on. This ought to have started before his announcement but knowing how serious and time-consuming such a process would take, it is better tackled head on now. The challenge might be how to attract the result-oriented personnel on board to complement the brilliant ones already on ground. He appears more than capable of handling this and one thing is for certain, it needs not be a collection of CV’s and Resumes with Harvard, Stanford, LSE, Oxford, Cambridge and the likes on it While these are great for effects, what he needs are the achievers amongst them – the roll-up your sleeves, hands-on professionals and business managers who understand the requirements for success and managing turn-arounds.

To ensure that he gets non-rent-seekers, this group of people should be engaged only if they would accept a stock-option as a critical component of their remuneration. They should get basic things like car, driver, house and a living wage but would only get the difference in the form of share options in say 3-5 years time when they turn their units/divisions around. These people may come from the Diaspora or local businesses…it does not matter. What matters is that there is no free lunch or 15-minutes of fame type of people in the enterprise.

5. Lastly, he may want to recognise that there are more shareholders in the company beyond the founding shareholders (real and unknown) and the Board of Directors. The number of comments, enquiries and complaints relating to this group who trusted in the project and the leadership; and indeed the Nigerian renaissance which it represents appears not properly addressed.  Specifically some have not been able to verify their certificates, others cannot act on those stocks bought in the secondary market and most annoying of all, no-one knows just what the technical suspension is about and when it would be lifted. There is simply no communication with this group of stakeholders.

In summary, Transcorp like any other business has issues and challenges and it should tackle them head-on using the best practice model. This is not yet the case and there are a lot of question marks on Tom’s appointment itself given the ‘talk’ that he was imposed on the company by the Chairman, the DG of the Nigerian Stock Exchange, Prof. (Mrs.) Ndi Okereke-Onyuike. This can only come back to haunt him should things not go according to ‘their’ plans.

However, Transcorp unlike any other business, has sold its project on the Nigerian renaissance platform and thus built a brand identity closely tied to that of the nation, albeit, the challenges of the nation. This is a questionable strategy in itself.

To truly move forward on the possible actualisation of the project, it needs to do much more than deploy incoherent engagement with its publics. By the way, the institutional investors have not entirely warmed up to the company because of the risk quotients uniquely tied to its make-up.

We can only hope that Mr. Tom Iseghohi’s tenure marks the turning point for the better. If he is unable to extract the concessions and commitments needed from the board to give him a free rein to do what is best for the organisation and he leaves, a number of people will have to account for the failure or/and non-performance of this venture.

We wish Transcorp and indeed Tom Iseghohi all the best in this unique task.

We intend to retain a watching brief on this company and its management.