After a decade at the helm of East Africa’s most profitable company, Safaricom CEO Mr Michael Joseph finally calls it a day, with a strong advice to CEOs to plan for their succession. Zachary Ochieng reports.
Few people expected that the indefatigable Michael Joseph would hand over the reins at Safaricom any time soon, after steering it to a multi-million dollar company within a span often years. So, when a statement announcing his exit was sent to the newsrooms, both friend and foe were caught unawares. But to Mr Joseph, the announcement did not come as a surprise, given his age and long tenure at Safaricom.
Right time to hand over
“I have been running this company for 10 yrs. It has reached a certain stage of maturity; it’s doing well and the direction is clearly set. I have been working for many years and I am beyond retirement. I just thought it is the right time to hand over to somebody else for the prosperity of the company”, Mr Joseph told CIO East Africa in an exclusive interview.
But unlike other companies where succession of the Chief Executive is only discussed in hushed tones, Mr Joseph has been planning for his succession for some time. However, the process took longer than expected as the right person for the job had to be found.
“From an intellectual point of view, I felt I have done much and I would rather hand over to somebody else who would continue with the company and strive to make it grow even further. Though I have been planning for this for long, the right time hadn’t come because I needed an appropriate successor in place. That is very important and it took a long time”, Mr Joseph says.
Long and painstaking journey
But as Mr Joseph admits, the journey to find his successor was a long and painstaking one. The process began two years ago and while Mr Joseph admits that one may not be willing to relinquish his position voluntarily, he jokingly adds that a succession has to be planned for since in Kenya it is very easy for anyone to be run over by a matatu.
“You may not want to go voluntarily but you have to take consideration of things like being run over by a matatu. So in the end there has to be a successor.”
In looking for Mr Joseph’s successor, Safaricom engaged two international headhunters to search for the kind of person the Board believed would run the company effectively. After going through a long list, a shortlist and eventually an interview list, the Board settled on Mr Bob Collymore.
But as Mr Joseph says, it was not an easy task and ended up taking a lot of time.
“It is very easy to hire a CEO because lots of people want this job. But in hiring the right person for a company of Safaricom’s size and dynamism, you need to look for the person who understands the Kenyan situation, including the country’s politics. That took a long time. We were prepared for any eventuality in case we didn’t get the right person.”
Advice to CEOs
Mr Joseph has a word of advice to fellow CEOs on succession: “You have to be prepared and be brave. It’s easy for one to say I have a good team here that we can promote within or let’s look around in Kenya . For us, we wanted to have the right person to take this company to the next level and we knew that there might be criticism but you need to be prepared for this and you need to do it professionally.”
Mr Joseph says that with a selection criteria that is above board, no questions will arise to the effect that you appointed your uncles or cousins.
“We did the right thing. The Board formed a committee to which I was only an adviser. This worked out well”, says Joseph.
Though his illustrious tenure at Safaricom was marked with ups and downs, Mr Joseph finds it difficult to enumerate his high moments as many positive developments took place under his watch. But he hastens to add that the launch of M-Pesa, the innovative mobile money transfer service and M-Kesho, which revolutionised banking especially for the hitherto unbanked population, stood as out as high moment as that is something he had wanted to do personally.
On the other hand, his low moments came in 2001when there was a network congestion due to high demand, a fault he admits was his. Come 2004 and there were fights over who would take over from him.
“But genuinely, the tenure at Safaricom has been a high for me”, he says as a matter of fact. Being the strategist that he is, Mr Joseph has wasted no time in showing his successor the strategic direction he wants the company to take. Unlike in other companies where the arrival of a new CEO sees a change of guard in key positions, this will not be the case at Safaricom.
Need to maintain the momentum
“Clearly what I have said to my successor is that we need to maintain the momentum now. As little disruption of the company as possible should happen. We don’t want to see a clean sweep when the new CEO comes in.”
Mr Joseph believes that Safaricom has a strong team and the most important thing is to maintain the company’s strategic objective of becoming a big player in the data field and leverage to the maximum on the 3G advantage.
“I believe with our nationwide 3G network which we are expanding rapidly this year with the WiMAX business and our network rollout, we are in a great position to maximise that and we shouldn’t lose that position.”
In the 10 years he headed Safaricom, Mr Joseph bestrode the East African corporate landscape like a colossus. Little wonder then that his competitors as well as other industry players often misunderstood him, with some equating him to a slave driver. But who is Michael Joseph?
“You must have read articles in the press insinuating that I am a driver and an aggressive person. But to tell you the truth, my character is very much suited to building things”, he says with a chuckle.
Larger than life image
Even so, his larger than life image makes it difficult to differentiate between Michael Joseph and the company he built almost from scratch when it was still part of the monolithic, inefficiency and corruption-riddled Telkom Kenya.
When CIO East Africa suggested to him that due to his ever visible nature, Safaricom would not remain the same without him at the helm, Mr Joseph was very candid.
“I understand that and I think it is my fault because I chose I would be the spokesperson and face of the company. It becomes hard to change that. I know it will take some time even for the new CEO. But I am not leaving Safaricom immediately. I will still remain a member of the Board but I won’t be visible. Eventually the company will rise above that and be Safaricom without Michael Joseph.”
Carefully planned succession
With a carefully planned succession and a clear business strategy in place, not even the sky can be the limit for Safaricom. When the changing of the guard finally takes place at the end of October, Safaricom’s customers should brace for even more innovative products and services.
The incoming CEO Mr Collymore, 52, has been a director of Safaricom for the last four years and sits on the boards of a number of Vodafone’s subsidiary companies in Africa. He has worked in the telecommunications industry for more than 30 years in a variety of roles including that of Global Purchasing Director in Vodafone and as its Consumer Marketing Director for Asia based in Japan. With this kind of experience, he definitely has his job cut out.
Mr Collymore commented upon his appointment: “It’s been a privilege for me to have sat on the board of Safaricom and watch its unfolding success. Under Michael’s leadership, the company has seen tremendous growth. He has been a truly exceptional CEO and whilst I am delighted to have been appointed as his successor, I fully appreciate that Michael’s will be a hard act to follow.” Confidence in his successor
But while Mr Collymore feels that Mr Joseph’s shoes will be too big for him to fit into, his predecessor has a lot of confidence in him.
“The most important thing for me about Bob is that I know him. I know his strengths and weaknesses and I know that him and I will work very closely together and very well. It won’t be a situation where he gets rid of evertything that was associated with Michael Joseph. He understands the company and the reasons for our success and he is not the kind of man that is going to act in a destructive way”, says an upbeat Mr Joseph.
And so as Mr Joseph walks tall into retirement, he is happy to note that the uptake of data services in which Safaricom has invested heavily has been very good. However, the cost of the device-whether a mobile phone or a modem has been a major challenge. Mr Joseph says that while Safaricom has been trying to make the cost of data as affordable as possible, real data use can only be experienced when one uses a smartphone, which is very expensive. However, Mr Joseph says he is working on bringing down the cost of the device.
“If I can get the costs down, we will even be more successful. But I am happy about the uptake and I think we could do more”.
So optimistic is Mr Joseph that in the next five years, he sees Safaricom having 22 or 23 million subscribers and being the number one player in data services offering mobile data, fixed data, TV to your home and Internet to your home.
Telecommunications company of kenya
“We will be the telecomunications company of Kenya in the next five years. We are already there but we will have more international connections datawise”, enthuses Mr Joseph.
His parting shot to CIOs is that a CIO is not the person responsible for the maintenance of deskstop systems or making sure that stytems are working. “The CIO has a much bigger responsibility. A company of our size, for instance, has massive IT systems that require maintenance but they require some strategic thinking as well. A CIO has to think for the future. You have to understand what the future is going to be and what kind of people are going to be available to hire to implement these systems”, Mr Joseph advises.
According to him, CIOs have a much bigger responsibility in seeing whether the right systems are in place.
At this juncture, we end our interview but Mr Joseph is perplexed that we have not asked any controversial question.
So I grab the opportunity and ask him why Mobicom, the leading mobile dealer recently divorced Safaricom after a
10-year marriage and whether it was a case of sour grapes.
“To be quite honest, I don’t know. I don’t know the ttuth. Despite what has been written in the media, I really don’t know what happened. All I know is that one day I got three letters on my desk saying the company had terminated the contract with Safaricom. And that’s all I know. To me it was an enormous disappointment not because of the business as it was quite easy to fill in the gap. The issue was from a personal point of view. I was quite hurt”, Joseph says adding: “Mibocom was very special to me and we helped them a lot particularly during the post-election violence. There was no breach of contract and there was no reason for that to happen. They simply decided there were greener pastures somewhere and they went for it.”
Mobicom ditched Safaricom forTelkom Kenya.
A glimpse into Safaricom chiefs
Who is Bob Collymore?
The incoming Safaricom CEO Mr Collymore has worked for Vodafone Group in various capacities in a period spanning over 12 years. He is currently the Governance Director, Africa, a position he has held for the last four years. From 2003 to 2006, he was the Marketing Director, Asia. He was the company’s Global Handset Purchasing Director from 2000 to 2003.
Before joining the Vodafone Group he was the Purchasing Director at Dixons Group Pic between 1994 and 1998. He has also held various management roles in the telecommunications industry with his longest stint being at the British Telecoms (BT) where he served fora total of 16 years.
Outgoing Safaricom CEO Michael Joseph has steered the company to greater heights with the help of a top management team of 12. We take you through the profiles of some of them.
Michael Joseph – Chief Executive Officer
Michael Joseph is directly contracted by Vodafone for secondment to Safaricom as the CEO of Safaricom, a position held since Vodafone’s original investment in mid-2000. He has extensive international experience in the implementation and operation of large wireless and wireline networks, including operations in Hungary, Spain, Brazil, Peru, Argentina, Korea, United States, Australia and the Middle East.
Mr Joseph has specialised in licence acquisition, construction of new networks, turnaround management and start-up of newoperations during his careerthat spans over40years starting asa pupil telecommunications technician to his current position. He has guided the company from a subscriber base of fewer than 20,000 to over 10 million today.
Mr. Joseph has been the recipient of many awards, including CEO of the Year. Mr Joseph is a US citizen and obtained a BSc. (cum laude) in Electrical Engineering from the University of Cape Town and is a member of the Institute of Electrical and Electronic Engineers (IEEE) and the Institute of Electronic Engineers (IEE), UK.
Chris Tiffin – Chief Financial Officer
MrTiffin joined Safaricom from Celtel Nigeria where he held the position of Chief Financial Officer, having served in that position since 2004.
Prior to taking up his current position he held the position of Financial Analyst and Financial Manager with Tracker Network (PTY) Ltd South Africa and prior to that he held various financial positions with Vodacom (PTY) Ltd in South Africa.
He is a Chartered Accountant.
Les Baillie – Chief Investor Relations Officer
Prior to this he served as the Chief Finance Officer, of Safaricom, a position he held since Vodafone’s original investment in mid-2000.
He has extensive experience in the mobile telecommunications industry having joined Vodafone Group in the UK in 1986.
During his time before joining Safaricom, he held several senior financial positions at director level in Vodafone companies covering networks, service provider, value added services, data and radio paging.
He has been involved in two start-up operations, in radio paging and in Safaricom.
Mr. Baillie is a UK citizen, a fellow of the Chartered Institute of Management Accountants and holds a B.A (Honours) degree from Reading University in the UK
Peter Arina – Chief Commercial Officer
Mr Peter Arina joined Safaricom in November 2004 as Chief Commercial Officer responsible for the Commercial Division which comprises the Marketing, Sales, Customer Management and Commercial Planning departments.
Mr Arina previously worked in Unilever Kenya for 15 years having started his marketing and sales management career there in 1989. He gained extensive experience in Marketing and Sales through holding various positions in those functions. He became the Customer Development Director (Sales Director) reporting to the Chief Executive Officer (East Africa) in May 2001, a position he held until October 2004.
Mr Arina is a Kenyan citizen and holder of a Bachelor of Commerce (Marketing) degree from the University of Nairobi.
John Barorot – Chief Technical Officer
Mr John Barorot joined Safaricom in 2000 as Senior Manager in Operations and Maintenance department (NMC Manager). He has risen through the ranks to become HOD Operations & Maintenance department in 2003 and later in 2005 to this current position of CTO.
Mr Barorot has had extensive training and industrial attachments in many countries including UK, Belgium, Hungary and South Africa amongst others. He is responsible for the cellular network planning, network rollout, network maintenance and network quality.
Mr Barorot is a Kenyan citizen who has over 16 years experience in the telecommunications industry. He holds an upper second class Bachelor of Technology degree in electrical engineering and communications, from Moi University.
Robert Mugo – Chief Information Officer (CIO)
Mr Robert Mugo joined Safaricom as the Chief Information Officer (CIO) in June 2008. He is responsible for the IT systems and infrastructure at Safaricom with a key focus on ensuring that they support business needs. He is also responsible for development and implementation of IT strategy and related budgets as well as providing executive level input for the company’s strategic planning and execution.
Mr Mugo has over 13 years of industry experience and has carried out IT projects in a number of African countries. Prior to joining Safaricom he was the Chief Executive Officer of Flashcom Limited, a CDMA based wireless telecommunications operator. He has been General Manager and Technical Director at UUNET as well as Corporate Head of Technical Operations at Africa Online.
He has also been Vice Chairman and CTO of the Telecommunications Service Providers of Kenya as well as a board member of the Telecommunications Network Operators Forum (TNOF) and Africa CDMA Forum (ACF).
Mr Mugo is a Kenyan citizen and holds B.Sc. Electrical & Electronics Engineering and MBA Strategic Management degrees from the University of Nairobi. He also holds certifications from Cisco, Microsoft and Checkpoint.
Safaricom’s key milestones
1997 – Established as a department of Telkom Kenya to offer mobile phone services.
2000 – Vodacom group Pic of the United Kingdom, the world’s largest telecommunication company, acquires a 40 per cent stake and management responsibility for the company and re-launches the operator.
2001 – Launches ATM top up service in September, 2001 as a venture between Safaricom and Standard Chartered Bank. The service enables pre-paid subscribers who operate accounts with the bank to top-up their credit through any of the teller machines available countrywide.
2002 – Made the first profit, a net profit of Ksh 753 million (US$ 10m) on revenues of Ksh 9.2 billion (US$ 120m).
2003 – Launches Safaricom online in partnership with Wananchi Online. This was the first mobile internet and email service for both business and individuals
2004 – Becomes the first operator in the country to launch General Packet Radio Services (GPRS) services in July 2004
2005 – In May 2005 launches Sambaza, an airtime sharing service that enables our prepaid subscribers to share airtime with their family and friends.
2006 – Launches Enhanced Data rates for GSM Evolution (EDGE) services in 2006
2007 - In March 2007 launched M-PESA, which is a mobile payment solution that enables users to complete financial transactions by mobile phone. This killer application became the global standard for mobile money transfer. M-PESA goes international August 2007.
Formally granted licence to operate a 3G network by the Communication Commission of Kenya in October 2007. The company paid US$ 25 million for the licence.
2008 – Commercial launch of the 3G services giving its subscribers access tc high-speed mobile data at superior speeds of up to 7.2Mb per second. Acquire; 51 per cent of One Communications Ltd is a Kenyan holding company anc through its subsidiaries provides various data communication services including fixed WiMAX access services. Launches IPO in 2008. Safaricom Share-price to cost Sh5; Shares attract thousand! ; IPO floods Rwanda; Safaricom IPO oversubscribed; Safaricom IPO draws global investors attention to Africa.
2009 – Enters corporate data market with the acquisition of Packet Stream Dats Networks Limited. Incorporated in 2003, Packet Stream Data Networks wa: licensed by CCK to provide various data communication services including fixec WiMAX access services.
2070 – Announces intention to acquire the ownership of two informatior communications technology (ICT) companies namely IGO Wireless Limited ane Instaconnect Limited. IGO is a fixed wireless data services operator whik Instaconnect is licensed as an Application Service Provider engaged primarily ir the integration of data solutions.
Partnerships: M-Kesho launches May 2010. M-PESA/EQUITY partnership. Phon« banking service targets 10 million M-PESA subscribers. Subscriber base rises.
Awards: Safaricom awarded Best Telecom Company of the year at the Business Africa Awards 2010 in London.
Michael Joseph Retirement-June 2010. Robert Collymore appointed CEC as from November 1 2010. Robert has been on the Safaricom Board since 2006