Yesterday I was invited to the UBL 70th anniversary celebrations which got me thinking. It was a nostalgic moment having spent a glorious 2 years there as Legal Director. In attendance was current staff, exec and previous staff. Here are some lessons I learnt. Lessons which our ‘bail out’ companies and political leadership can learn.
1. UBL operates in very difficult conditions. An aggressive taxation regime (up to 80% tax on spirits), high energy costs, massive capital costs and rising cost of raw materials, bad roads when transporting product to rural areas where trucks get stuck for days, counterfeit products, tax evasion by some people in parallel trade (a container of Johnnie Walker with no tax paid can change someone’s life. This is what happens if you over tax goods). But they do not run to government complaining or asking for bail outs. Lesson: work with what you have. Privatise your profit and loss. Don’t privatise profit and nationalise your loss by asking for tax payer’s money to bail you out. Don’t make your loss everyone’s problem.
2. Continuity of leadership. In attendance were a number of former executive members who have since moved on to do other things in life. If I am not mistaken the entire executive is different from the one I was a member of three years ago. We left on a high after doing our part and setting up our successors for even more success than we had. The Company is getting its third MD in slightly over 6 years but it continues to grow. Lesson: Set up systems, work hard, reap what you sow, allow new leaders to flourish and leave the stage when you have something worthy to leave behind so that your successors do even better. How many of these failed bail out companies have had the same Chairman/CEO (usually one man or family companies) who have no intention of resigning despite running down their companies? Their companies don’t need a cash bail out. They need a leadership bail out.
3. Live within your means. I was at UBL when we had not so good looking offices and I am being modest here. But we accepted that we had not made enough money to fix the offices and had to make do with what we had. Fast forward, the company has state of the art offices that make us all proud. This was financed after time and resource accumulation. Compare this to our tycoons who take weddings of their children to Europe, SA and spendoads of money on luxuries like mansions, palatial country homes and square miles of idle unproductive village land and state of the art SUVs costing hundreds of millions. They educate their children in very expensive international schools where tuition for one year can educate one child of mine for 5 yesrs. Now they want bail outs. Compare this to UBL company which uses Mitsubishi pickups (not the more expensive Ford Rangers which MTN uses for MTN is a bigger company, or Land Cruisers of the UN). The execs in UBL drive personal cars and are given fuel or those with official cars have basic cars. Compare this to sons of the ‘bail out tycoons’ who drive cars better than the official cars of the MD of UBL. As for government, I cannot even talk about its wastefulness. …… Lesson: Live large, crash hard! Be frugal, grow!
4. Non interference in technical functions. In attendance was Dr. Martin Aliker, former Board Chairman and shareholder, Dr. Alan Shonubi the current Chairman was also in attendance. In my entire stay at UBL, I don’t remember any of them calling me to direct me on how to do my work. They simply sat back and over saw what I did at Board level and waited for dividends. Freedom to succeed!
5. Performance is the only godfather. The company had a solid culture of rewarding good performance and dealing with pooor performance. It is impossible to stay there as ‘dead wood’ and survive. This is the only way to succeeed. Bail out companies and political leadership, borrow a leaf.
6. Grow wealth. The company had humble beginings in 1946. The founders of the company are long since dead. But what they started has grown in leaps and bounds. How many Ugandan businesses have grown from generation to generation? Each generation comes with its own ‘tycoons’. Who even remembers the tycoons of the 70s and 80s? They are all gone? Why? Lack of structures which could ensure sustainability beyond the lives of the founders. Lack of financial discipline which permeated to younger generations. Remember monkey see monkey do. How will a son of a tycoon who sees his father live large on debt and run to government for bail outs appreciate the value of his father’s business when he inherits it? He will see it as a source to finance luxury instead of being an asset to grow.
7. Intergrity, Intergrity, integrity. Nothing is emphasised more than integrity in UBL. The fastest exit out of the company is to show lack of integrity. You will be exited faster than you came with no fear or favour. Having been at the forefront of this fight, I know what I am talking about. Not even friends (even childhood friends) of key decision makers were spared if caught in the wrong. This allows the right culture and helps you build the right team. How many people are in positions in bail out companies and government but should have been exited long ago?
8. Real Value not cosmetic value. Many of the companies asking for a bail out have been heralded as celelebrated companies. But are they? How much tax do they pay annually in corporation tax (forget PAYE for that is tax off employees). They declare losses year in year out and pay zero corporation tax, have huge overheads and do not manage costs, pay miserable wages to their workers but want bail outs. Me thinks that a big trader in kikuubo who employs 10 people, supplies goods to hundreds of smaller traders, pays tax, drives a simple IPSUM and does not default on his microfinance loan is a better asset to the economy. Do you know the crisis that would befall the banking sector if these ‘tycoons’ defaulted on their loans worth over 1 trillion? Remember these are just a select few. Total ‘tycoon’ non performing loans could be over 2 trillion. With falling real estate prices, the securities (usually real estate) may not even be sufficient to cover the loans. No wonder interest rates remain high because of high risk big borrowers. This high cost of credit is killing businesses and hampering growth!
9. Legacy! Leave a legacy. It was humbling being recognised for our efforts as OBs and OGs (former staff) which our successors have amplified to greater effect. Greater effect which even dwarfs our achievements. All you had to do was mention your name and everyone remembers the good you did. No man is too good to hold onto a position for ever. A good leader leaves even when he still has something to offer. Actually he should leave on a high. He leaves room for the next person to build on his success and even do better than him. He leaves when he is still performing. He does not cling on because he is performing. That is self aggrandisement, having an inflated sense of self importance, selfishness, bigotry, and pride. Bad traits for a leader! Those ‘above’ listen………
10. Get these tycoons off pakasa forum. They are a bad example to anyone who wants to make it in life. They are leeches. If you want mentors get people who have real success stories and have built legacies and companies to live on after them.
For God and my country! Prayers for this country are in order! We are heading in the wrong direction!