The Group Managing Director of Dangote Industries Limited, Olakunle Alake says the success of any business organization is relative to its adoption and implementation of effective stakeholders’ management strategies.
Alake, who spoke on “Stakeholder Management: The CEO’s Role,” at the Global CEO-Africa Programme, by the Lagos Business school, in collaboration with the IESE Business School, Barcelona and Strathmore University, Nairobi, on Friday, said effective management of all stakeholders is critical to achieving an organisation’s aims on the global business landscape.
He charged CEOs seeking success to urgently identify stakeholders critical to the success of their organizations, such as owners/investors, government officials, regulatory bodies, consumers, staff, distributors, and host communities, and start engaging.
The Dangote Industries boss challenged CEOs to put together a team to handle stakeholder relations, comprising people with adequate international, as well as local exposure.
It is equally important, he continued, to “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 added.
Alake defined stakeholder management as the process of organising, monitoring, managing and improving relationships with people who have vested interests in the business or organization, which they depend on to fulfill their personal goals.
For instance, he said “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.”
Alake stated that an 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 successfully managed both its internal and external stakeholders across Africa, Alake said the company consistently interfaces with stakeholders across diverse cultural backgrounds in all its areas of operation.
The group, it continued, has operations in Congo, Ethiopia, Zambia, Tanzania, Cameroon, Senegal, South Africa, Ghana and Sierra Leone, while “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 advised CEOs to expect diversity in regulations, while managing stakeholders, stressing that “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 differ 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 as they 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 stressed: “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 CEOs to play the role of balancing all expectations/interests of the various stakeholders in other to achieve a win-win situation, commending the collaborative effort of the three great institutions for using the CEOs’ forum to bring together talents and experts with firsthand experience of navigating through the continent’s business terrain to share their experience.