Elumelu’s Winning Recipe for Business Success

The Chairman of Heirs Holdings, Mr. Tony Elumelu, recently met with young entrepreneurs across Africa where he shared relevant insights for the survival of businesses. Obinna Chima presents the excerpts:

Startups are globally regarded as the backbone of any economy. That is why in most economies, especially in Asia, they are widely known for their innovation, competitive edge and strong links to global enterprises.

These businesses contribute to improved living standards, bring about substantial local capital formation and achieve high level of productivity and capability. They have also been identified as a vehicle for employment generation and providing opportunities for entrepreneurial sourcing, training, development and empowerment.

While economic turbulence or crises such as the COVID-19 pandemic at times act as setback for businesses, they also present opportunities for discerning entrepreneurs.

To the Chairman, Heirs Holdings and the Founder of the Tony Elumelu Foundation (TEF), it is in the time of crisis that entrepreneurs uncover opportunities to solve problems and position their businesses for success.

Speaking during a hybrid mentoring session with several young African entrepreneurs, Elumelu stressed the importance for entrepreneurs to always define their strategy and set realistic goals.

The Chairman of the United Bank for Africa Plc (UBA), narrated to his audience, the challenges he faced at the early stage of his career, stressing the need for business operators to be committed to their corporate vision.

“When we started at Standard Trust Bank (STB), we came up with what is called the three-tier strategic intent. Tier-one was that we took over a distressed bank. Tier-2 was a bank that was shut down, was not in clearing house and all its offices closed.

“Nigeria’s banking sector then had over 125 banks, it was a crowded space. And the third tier strategic intent was how to become one of the top three banks in Nigeria. And we put timeframe to these. In the first place, we said for the first three years, let’s make it a viable firm; the second one, up to the seventh year, was to make it one of the top 10 banks and the third one was that by the tenth year, to make it one of the top three banks.

“So, we stretched ourselves; it was audacious, it was big, and considering a banking sector that had 125 banks at that time. When we accomplished the first one, it gave us further impetus, energy, power and inspiration we needed to move to the second one. When we accomplished the second one, it also helped us to move to the third phase.

“We actually accomplished the third phase before the set target. We did the acquisition in 2004, merged in 2005; but this was a journey that started in 1997. So, when we got to that point, we couldn’t fold our hands or rest there, we had to come up with another three-year strategic intent,” Elumelu explained.

Speaking further, he said the first strategic intent was to be dominant in financial services group in Nigeria; the second was to dominate Africa and third, according to him, was that UBA should have a global footprint.

“Again, we accomplished the first one; for the second one, today UBA operates in 20 African countries and the third one, UBA today operates in London, Paris and New York and it is the only African bank that operates in the United States.

“So, the story here for entrepreneurs is: Firstly, stretch yourself in terms of your ambition; work very hard; assemble the right people to help you orchestrate and achieve that and as you accomplish each goal, you should not be complacent or to relax, it should ginger you to the next phase. And when you think you have achieve all, strategise and come up with another set of target.

“Keep coming up with strategy until you conquer the world. For example, in food business today, we have McDonald serving the world, you can start by serving Nigeria. You can say that every child that goes to school must eat your product every day, and that aspiration should drive you. So, redefine your aspiration in a wider contest and take it from there,” Elumelu added.

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According to him, to win in business, “the journey of 1,000 miles starts must from one step.”

“For me, it is always important that you outline your goals and put milestones to it. The first milestone should lead you to the second milestone, third milestone and so forth,” he added.

Elumelu pointed out that when he established Heirs Holdings in 2010, “we again defined our strategy and in 2020, that is after 10 years, we took stock and we are happy that again, almost everything we set out to achieve, we have achieved.”

“The key thing to take away is for you to have your purpose or dreams, be audacious as much as possible, then set timeframe — short milestones and quick wins. What this does is that it helps you to validate, inspire, motivate and encourage you,” he said.

Responding to a question on how to ensure that staff key into the vision of an organisation, Elumelu said business operators must appreciate the relevance of people in driving business.

He pointed out that human resources is so critical for any business and the turnaround of the business. Elumelu noted that retreat is very important for business growth, just as he pointed out the need for entrepreneurs to ensure that they take out time to bond with their staff.

“We prioritised the fact that if we want to succeed, it is going to be driven by our people. For me, at that stage as CEO, it was important that I was involved in all recruitments, even up to the drivers, in making sure that we get it right. Today, I still spend a lot of time in getting people on board. That prioritisation is important.

“I also spend a lot of time on posting because putting a round peg in a round hole is critical for business success. Where you put a staff for maximum productivity is also very important.

“So, I think the right policies, the right culture, the right indoctrination and the right believe system would help you to win in that battle. But let’s not kid ourselves, this generation ‘Z’ people can come in the morning, leave in the afternoon and get another job in the evening.

“So, people is very important for the success of any business and we need to prioritise it and leadership should be involved in the selection process, how they are managed and you need to create a relationship with people who work with you,” he added.

Speaking on access to finance which remains a challenge in the continent, Elumelu said: “My advice to everyone is that you need funding. And if you can get funding at reasonable terms, please get money to drive your business. But don’t raise money for social consumption. If you raise money, let it be for productive purposes; just use it to make an investment.

“What comes from that investment, take it or leverage the process of that investment to develop your business. Be careful with the terms and conditions of the funds you are getting because there are some that can kill you as an entrepreneur.”

He explained: “When we started, we took over a distressed bank and if we were looking for someone to fund it, nobody would do it because they would not be convinced. But we saw opportunities and we understood our local market. And it had never been done in this part of the world that you take a distressed financial institution and turn it around.

“Only the paranoid succeed in business because you have to always ask yourself: What if this doesn’t go well, what if you are not able to do this or that? That is the discipline that comes when you are an entrepreneur.

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“When we started STB, there were risks we took that then we can’t even try 10 per cent of such risks today, because you have to look at the collateral damage. Detach yourself from the business opportunities and look at it with rigour. Don’t always look at success, also look at the effects of failure.”

For entrepreneurs who do not have first mover advantage, Elumelu advised then to be focused on developing the right product that can stand completion and keep pushing.

“Put in place additional benefits for customers. It is good if we have the first move advantage, but when we don’t have it, we can play catch up and play it very well, even better than those who had first mover advantage.

“So, I don’t want us to be discouraged because we are not the first, I also do not want us not to get into a space because others are already in that space. Be purposeful and set out your strategy. Like I said earlier, when we started banking, it was a crowded space, 125 banks, then later there was a shake up and it reduced to about 20 banks. So, let us never be discouraged by first mover advantage,” the entrepreneur advised.

He also advised entrepreneurs to ensure that groom their staff and share relevant knowledge with them.

“For me, I try to commoditise knowledge; I try to share everything I learn,” he said, saying “business leaders must try to replicate themselves in others, so that just staying where you are, you will know your apostles (staff) are doing what they ought to be doing; you also know their weaknesses and limitations and know where to step in to fortify them. When you have apostles almost everywhere, then you will have things running, even if you are not there.”

Responding to a question on why entrepreneurs must take media and communication very serious, which he said has become part of his business strategy, Elumelu said: “When we started in STB, we had done so well in the third year and we were going to post N1 billion profit. One of my colleagues, Charles Nwodo, a Divisional Director then, advised that we needed to introduce ourselves to the world through the media. But I didn’t believe in that then.

“I felt what we were doing should just speak for us. Then we published and people started asking questions and saying all sort of things and some said we were ‘cowboys.’ I didn’t understand then that in the world, if you don’t tell your story, the world would tell that story the way they wanted. I had had my baptism and I learnt fast.

“So, you have to build your story and talk about what you are doing. I think it is actually being proactive and carrying the market along.”

He noted the importance of mentorship for business operators, saying they are required to draw inspiration and strength from.

“Steve Jobs and Micheal Jackson were my mentors. Those were great men with the power of hard work. The world sees the finished product and they say Micheal Jackson is talented, but he pushed himself to become great at what he was doing, until his last day. At times, he would spend several hours without eating. That was what helped me when I was rising.

“Second was Steve Jobs. This was a man from nowhere who founded the first company to cross $1 trillion in market capitalisation even when he was gone. Most people die and their company goes into extinction, but even in death, his company is still rising. Also, your parents are always the first people to inspire you and I was fortunate to have had great bosses.”

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