Dangote GM, Olakunle Alake, Hinges Business Success on Effective Stakeholder Management

Speaking on ‘Stakeholder Management: The CEO’s Role’, at the Global CEO-Africa Programme, a collaboration by the Lagos Business school, IESE Business School, Barcelona and Strathmore University, Nairobi on Friday, Alake identified effective management of all stakeholders as a critical factor to achieving an organisation’s aims on the global business landscape.

He urged CEOs who are determined to succeed to as a matter of urgency identify stakeholders who are critical to the success of the organisation and start engaging them. Alake listed these stakeholders to include: owners/investors, government officials, regulatory bodies, consumers, staff, distributors, and host communities.

The Dangote Group helmsman, while tasking the CEOs, said, “Put together a team to handle stakeholder relations; the team should include people with adequate international exposure and people with local exposure. Also, 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 said.

He defined stakeholder management as the process of organising, monitoring, managing and improving relationships with people who have vested interest in the business or organisation. “Stakeholders have vested interest in the organisations as they depend on them to fulfill their personal goals. 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”, he added.

Alake stated that 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 been able to manage both internal and external stakeholders across Africa, Alake explained that the company consistently interfaces with stakeholders across diverse cultural backgrounds in all its areas of operation.

He disclosed that the company has operations in Congo, Ethiopia, Zambia, Tanzania, Cameroon, Senegal, South Africa, Ghana and Sierra Leone. “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 added.

He advised CEOs to expect diversity in regulations in its effort to manage stakeholders. “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 differs 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 and 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 explained: “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 the CEOs to play the role of balancing all expectations/interests of the various stakeholders in other to achieve a win-win situation.