Monday, February 22, 2021 / 09:00 AM / By Olakunle Alake, GMD Dangote Industries Ltd / Header Image Credit: Dangote Industries Ltd
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 said.
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. "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," he said.
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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