Book Review: Leadership Secrets Of The World’s Most Successful CEO’s

What does it really take to be a great and effective leader? Are leaders born or made? ‘Leadership is not an innate characteristic, it can be developed through training.’ Wallstreet career journal did this survey on 300 company CEO’s, and 40% of them believed that their leadership abilities were born in them and 60% said their leadership was developed through experience.

Eric Yaverbaum’s book, is an easy to digest book that collects thoughts of top 100 CEO’s giving their proven strategies, attitude, behavior, philosophy and tactics that they have used to help themselves and their organizations rise.

The major lessons on leadership in this book include:

  • Treat your employees well and they will take care of your customers and your business.
  • Success is not achieved by leadership alone, a good leader ensures he is surrounded by right people.
  • A great leader is an enabler and a facilitator, their style of leadership is humane, if everything is not in harmony with nature and natural process, it is not sustainable.
  • A leader focuses on two or three issues that will affect the future of the enterprise.
  • Never let any relationship, internal or external go stale or unmanaged.
  • Make good, simple, ethical and honest decisions.
  • Focus. You cannot go everywhere but do everything that it takes if to scale your performance.
  • Innovate and identify what makes your company unique and don’t outsource your strategic thinking.
  • Simplify, until it fits one page.
  • Communicate your vision, missions and goals clearly and truly believe and trust the people you are working with.
  • Give people the ability and authority to get things done and hold them accountable for the results. Ask for the best thinking and really listen.

I would highly recommend this book as it gives variety of leadership advice from 100 different perspectives, this makes it unique and enjoyable as you get to see some major yet unique similarities and differences in each of Wallstreet Journal’s then top 100 CEO. If you are already leading, having these variety of best examples can make you an even better leader.

Authored by Eric Yaverbaum; Reviewed by Effie Odhiambo.

Webinar Review: 2021 Economic Outlook and Drivers For SMEs Growth

Hosted by Inuka SME; Reviewed By Patrick Okinda.

In the hypothetical opinion of Dr. Samuel Tiriongo, Kenya Bankers Association Director of Research and Policy who spoke in the webinar; the following are key highlights in Kenya’s 2021 economic outlook.

  • A 0.1% contraction rate of Kenya’s economy by December 2020 which is better than IMF’s projection of 1.0%.
  • The impact of COVID-19 pandemic remains uneven, and recovery non-uniform across countries and sectors.
  • Contactless sectors such as agriculture have remained more resilient than the service sector which remains depressed by lockdowns and cessation of movements.
  • Kenya’s inflation rate has remained low and steady since 2018.
  • The measures taken by government (except on fuel prices) continue to support credit growth despite the uncertainty caused by the pandemic.
  • Overall in 2021, the economy is projected to rebound by 7.6% (IMF projection is much lower at 4.7%) subject to removal of some pandemic containment measures, schools reopening, government policy support, fast paced vaccine rollout to a wide reach and at a waived fee.

The general growth of MSMEs amidst the pandemic is hinged on opportunities for business that will unlock credit, supply of raw materials, demand for goods and services in the local market and sufficiency of operating capital. The risks for MSMEs closure still remain but they can be mitigated through diversification of products and services, innovation, prudent management of resources and changing of business models to accommodate change.

Financial Sector Review: Cost Of Borrowing

In Kenya, the most common on platform lenders are Mshwari (NCBA Bank), KCB M-PESA KCB Bank), Eazzy Loan (Equity Bank) and FULIZA (NCBA Bank). These four credit facilities are very available to mobile phone users with fair to good credit ratings.

In my analysis, each of these four lending platforms has been has been packaged uniquely. Mshwari and KCB MPESA have the closest resemblance as both have set their monthly interest rate at 7.5% which is payable in 30 days. This implies that a loan of Kes.1,000 on Mshwari or KCB M-PESA will accrue an interest of Kes.75 within a month.

Eazzy loan on the other hand will charge an interest rate of Kes.10.83 (1.83%) on the same loan of Kes.1,000. However, the cost of credit on Eazzy app is exclusive of 1% (Kes.10) excise duty and a loan appraisal fee of Kes.50 (5%). This totals the cost of a Kes.1,000 bob on Equity Bank’s Eazzy loan to Kes.70.83.

Therefore it is Kes.4.17 (0.417%) cheaper to borrow Kes.1,000 from Eazzy app than from Mshwari and KCB M-PESA. On the other hand, FULIZA, an overdraft facility by NCBA Bank is the most costly of the four. A borrower is charged a daily rate of 1.033% interest which is equal to a per annum rate of 395.2%. To scale the uptake of FULIZA, NCBA Bank does not give Mshwari loans to borrowers requesting less than Kes.2,000. These on platform lenders charge a high interest rate (way above CBK rate) with the argument that these loans are unsecured (lack collateral).

Review by Patrick Okinda

Opinion Column: Behavioural Finance

How do you feel when you have money? … and how about when you are broke? Isn’t money emotional? Do with me this survey; who / what influences your buy and borrow decisions? You’ll be surprised to learn that it is your neighbours, friends and social media influencers.

Our environment makes us to develop likes and dislikes. So we spend on our likes. We appeal to our emotions when swiping credit cards, buying holiday tickets, taking loans and spending on luxuries. We are always more ambitious to earn more in less time, so we end up borrowing.

We are a society more than we are an economy. We live in social classes and have social statuses worn as jewelry on our foreheads. So when we spend, we do so like our neighbours. This is called neighborhood effect.  It influences our decisions on where to stay, the hotels to go to and what phones we buy.

If born in a poor family, your mindset takes time to adjust into a flashy lifestyle. Kinds born in affluent homes grow with a taste of affluent things and when they can’t earn enough to sustain their parents’ lifestyle, they remain dependent to them for a long time.

So how do you organize your personal finances in a cash led society? Start by assessing your true social status without extrapolating your income beyond its actual average. Then spend on budget, not on emotions or likes and dislikes. Lead a modest lifestyle and live below your means.

Column by Patrick Okinda

Opinion Column: How To Do Business With Government

The three most prominent business models are: Business to Consumer (B2C), Business to Business (B2B) and Government to Consumer (G2C). These three models are helpful when one is positioning him/herself in the market. There is however a fourth business model that is often not sustainable for reasons that I will highlight in the next paragraph, which is the Business to Government (B2G) model. In a B2G model, an entrepreneur targets government as a major consumer of his goods and services.

Kenya has forty eight governments in total, 47 seven of which as are devolved at county level. This implies that 48 entities plus other government agencies, departments and parastatals that procure supply opportunities every fiscal year. These tenders are awarded on merit, as it should be, and there are certain requirements in terms of regulatory compliance, experience, skills and capability to supply goods and/or services to these governments and their agencies. Therefore, a sales department in B2G model is supposed to be keen about tender openings by governments. This can often be done by checking tender notice websites, daily newspapers, alerts from networks with civil servants and email enquiries. Another important step to winning government tenders is by applying to be pre-qualified as a supplier or contractor or a professional service provider in as many government departments as possible. This increases your chances of winning tenders for recurrent yet short government projects.

Government tenders may however be unstainable due to fluctuations in the government’s demand curve, bureaucratic payment procedures which may lead a business into debts, political influence in winning and executing government tenders, unfair competition in winning the tenders and difficulty in pricing goods and services supplied to government as prices are not set by forces of demand and supply as it should be in a free market. If you want to do business with the government, aim at taking tenders that you are capable to handle in terms of magnitude and working capital requirement. It is advisable not to take a pure B2G model as a way to mitigate the risks that come with doing business with and for the government.