Client Presentation, Karen, & Beach Trip

As mentioned previously, I have been putting together an assessment of my client’s real estate investments.  In essence, I have been gathering information on what the client currently has, what challenges they face, and what the options are going forward. Yesterday, I took part in my first client-facing presentation in my new role here in Kenya. There are some challenges I faced that are specific to Kenya and other developing economies, while others likely come with consulting in any context.

  • While access to information is an issue anywhere, it was an especially difficult task on this particular project.  I was lucky enough to have audited financials prepared for tax purposes over the majority of the past five years, but specifics like ongoing revenues and expenses were kept on loose paper.  Loan information was personal bank account debits and credits.  There were literally stacks of notebooks with scribblings on them which served as journal entries.from the past few decades. Spreadsheets had hard-coded numbers for entries and contained references to other files which were missing.  One common topic that keeps coming up with my colleagues is how well many of the businesses in this country are doing in spite of themselves.  The financial estimates I gave were oftentimes surprises to the client.
  • Because the company had little to no structure, I had no true point-of-contact to ask for clarification.  There isn’t a CEO or manager I could go to, and since I wasn’t part of the initial contracting phase, I had a difficult time establishing a connection to those within the business.  At this stage, I didn’t encounter the internal politics that others often do, but I don’t doubt that it exists.  Hopefully, the presentation solidified my advisory role and truly gave the family a sense of value that could be created going forward by an ongoing arrangement.
  • The decision to collaborate with a client or tell them what to do.  This is both a culturally-specific and stylistic choice that needs to be made.  I have sensed that in Kenya’s professional world, people are reticent to speak critically or to say ‘no’ to others who are equals or of a higher standing (more on this point in future posts, guaranteed).  At the very least, some information needs to be massaged, and that’s what we did.  We decided to pick our battles, and so pushed hard for some things (mostly basics to professionalize the business) while teaming up with the client come up with ideas of they more strongly agreed with (priority of objectives and long-term goals).

Overall, I believe the presentation itself went well, and soon enough will find out if the project will continue.  Regardless, I learned a great deal from the experience and enjoyed the complexity and difficulty of the work itself.

Behind the house were the gardens and stables

Behind the house lay the gardens and stables

One very cool aside: earlier this month, I was able to travel to the neighboring town, Karen, on the outskirts of Nairobi to visit a friend of a friend.  It was my first respite from the congestion of the city in about two months, and I was grateful for the opportunity.  If Karen sounds like an odd name for a town in Kenya, that’s because it is.  It is named (one way or another) after Karen Blixen, the writer and main character of the memoir and film, Out of Africa.  Her compound still stands much as it did nearly 100 years ago just a short distance from where I was visiting.  In fact, the people I was with are direct descendants of some of Blixen’s business partners and contemporaries.

Finally, most of our team took advantage of the recent holiday weekend by visiting Diani Beach.  We could cut the humidity with a knife, which was a stark departure from the arid, dusty, and windless Nairobi.  The beach itself was great: powdery white sand, warm placid water from the Indian ocean, and hardly anyone around to bother us.  Sadly, the latter may have had as much to do with a drop in tourism following Westgate and the Mombasa shootings as anything else.

The pool and cabana behind our bungalow

The pool and cabana behind our bungalow

Other beach notes:

  • Along the roads roamed packs of baboons
  • I fed a monkey (not a baboon) an apple, which he enjoyed immensely
  • My favorite meal on the continent was in a cave in Diani (Ali Barbour’s)
  • We learned to make homemade piña coladas
  • When travelling around East Africa: always fly rather than drive

Assignments & Westgate Hostage Situation

Over the past few weeks, my colleagues and I have been assigned to the various clients that have been cultivated by our local partner, Equity Bank.  Though we are still working in a very fluid and changing environment, it is exciting to get to get our hands dirty in the actual engagements. While I initially started working with the team assigned to a Kenyan retailer, I have since been moved to a different family business whose story is as intriguing as it is complicated.

Some background: What started roughly half a century ago as a way for an enterprising young man to pay for school by selling eggs to his neighbors has grown into one of the most successful family businesses in Kenya, operating in several industries across the country.  Over the past few decades, new ventures have been undertaken by the same entrepreneur, and he and his family have become prosperous.  As is the case anywhere, there are differing levels of commitment by the entrepreneur’s now-grown children to become engaged with the businesses.  Some have worked within the business for the entirety of their adult lives, while others have remained at arm’s length.

A few years ago, the patriarch/founder passed away. Since then, the family has begun to learn the businesses and other family assets are much more sizable than they realized previously.  Piecing together documents and accounts that were only known previously to the head of the family has taken years, and more are sure to crop up in the future. The part of the business that will be the focus of my current project are the real estate investments. Over the coming weeks, I will be taking stock of what the family currently has, and what options and strategies the family may wish to employ to maximize the properties’ potential. This will be a great learning experience for me personally, and I am excited to be on a project where the clients are genuinely interested in embracing changes that will benefit them and their families over the long term.

Child enjoying the 75″ HD screen at the Nakumatt Junction supermarket

Westgate Mall Attack

Over the weekend, a mall in Nairobi’s Westlands district was the focal point of violence, leaving dozens dead and possibly hundreds more injured.  The group claiming the attack is al-Shabaab, a Somali terrorist group with links to al-Qaeda.  While this blog’s focus is on consulting, local businesses, and culture, I would be remiss if I didn’t mention what will assuredly and sadly be one of the largest international news events for Nairobi while I am here.  I cannot put my head in the sand and hope that pretending that terrorism doesn’t exist will make it so.

All the members of my team are safe.  From what I can tell at this point, everyone in my extended network (business school alumni and professional local colleagues) is safe. My guess is that over the coming weeks and months, security around the city will be on high alert, and extra precautions will be taken at every location that may be seen as a target.

One thing I would like to add to the discussion about Westgate is that it is not exclusively an ex-pat, let alone American, shopping area, by any stretch.  Yes, it is upscale, but its clientele includes Kenyans, Indians, Chinese, and basically every other major group that lives in the city.  My team and I have been there, and one colleague works nearby, so we are familiar with the area.

Our thoughts are with the families and loved ones of those hurt or lost by the attack, as well as the Kenyan authorities who will be attempting to restore safety and provide leadership and stability in whatever capacity they can over the coming weeks and months.

Branches & The Frontier

I’ve spent enough time abroad to be a bit jaded by many of the things that may come as a shock to most travelers: poverty, pollution, different customs, etc.  But this week I saw something that blew my mind, which I have decided to write in (abbreviated) MBA case study format at the bottom of this post (apologies to those who haven’t read cases before).

This week our team split up and visited branches of the bank we will be partnering with.  I was extremely fortunate to go to a branch where the loan officer in charge of SMEs was very enthusiastic about putting me in front of clients and allowing me to ask them questions about their businesses.  Some of these businesses were started by serial entrepreneurs, some by women, some by people who had spent time working abroad, and a few who had worked for a multinational here in Kenya.

The entrepreneurial spirit is alive and well here;  the institutional voids and the cracks in the system that create market inefficiencies are slowly getting filled.

The businesses and industries were myriad, as well as the level of sophistication each businessperson possessed.  A few were as meticulous as anything you might see in the US, but there were also those that obviously would benefit from formalized business training.  The one common denominator was that each entrepreneur was incredibly excited to talk about their business.

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An entrepreneur standing next to one of her products, a solar water heater

And now for the Case (A):

Dave stood behind his desk enjoying a hot cup of African tea while staring out the window of his third-floor office in the busy Westlands neighborhood of Nairobi. Getting used to living in Africa had not been the big adjustment many had envisioned, and Dave found that Kenyans, on the whole, were incredibly friendly and helpful.  As he stared off over the rooftops and bustle of traffic, he noticed a mob of angry shouting Kenyan men moving a pushcart on the street below.  The mob was nearly 50 people, and Dave’s first reaction was that it was probably religious. Curious, he parted the blinds to get a better look, and noticed a naked full-grown Kenyan man huddled in the pushcart who had the expression of a man who would rather have been anywhere else in the world at that particular moment.

Stunned, he looked around the office to see if anyone else had seen this.  No one had.  He wondered whether he should run out to ask what this was about, call the police, or tell a co-worker what he just saw.  Clearly, a decision would need to be made.  Preferably sooner than later.  Dave set his cup of tea down and headed for the door.

Case (B) 

Dave managed to find a co-worker and told him what had just taken place.  The co-worker responded with a chuckle, “Probably a thief,” and walked away.  Text messages were sent to other locals to see if they might shed some light on the matter, and their responses boiled down to: the man probably was a thief; observe, but stay away; these incidents sometimes don’t end well; hopefully the police would intervene before this public shaming went any further.

A call to the police was likely to take hours, not minutes, for officers to arrive, if at all.

I shudder to imagine what happened to the man.  At best, more humiliation.  At worst…

Frontier justice is apparently not terribly uncommon along the frontier.

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Sam, my colleague and UNC (KF) alum, at Kenyatta airport the morning of the fire

Finally, I mentioned that one of my colleagues happened to be trying to travel the day of the airport fire, and he was kind enough to allow me to re-post his photo here. This was before 7am, after being forcibly de-planed mere minutes before scheduled takeoff.

Launch

Finally!

After three weeks of waiting for a stable internet connection, this blog is finally live.  First, thanks for caring enough to visit. This blog will serve as my outlet to the world for the next 12 or so months regarding what I’m doing in Africa both personally and professionally.

A brief intro to both:

Personally: I’m a 29 year-old American, who recently graduated with an MBA in Global Management (with a focus in Finance/Strategy).  I’ve lived and traveled abroad a decent amount over the past few years, particularly in Asia.  However, this is my first time in Africa.

Professionally: I am working as a consultant for a startup non-profit based out of Washington, DC.  Its goal is to provide partially subsidized advisory services to Small and Medium Enterprises (SMEs) in emerging markets, with the goal of helping entrepreneurs (mainly female owners of family businesses) grow their business.  I’m one of six team members in Nairobi, and our sister cohort of seven members is based in Bogotá/Medellín, Colombia. Hopefully, I will be linking to blog posts from other members of our inaugural class, so you can see and understand what others are doing.

During the year, I will be tweaking the formula as to what works and what doesn’t on this site (the layout is clearly temporary).  Any feedback or input is welcome, and the comment sections are (hopefully) open.

What industry is your client in?  What particular projects are you working on?

We are in training and have yet to meet our clients.  We spent two weeks in Washington, DC getting to hear from individuals from across the spectrum: NGOs (World Bank, IFC), Social Investors, Consultants (McKinsey, Dalberg), US government entities (OPIC, Dept. of Commerce), large multinationals (GE, ExxonMobil, FedEx), and aid outreach organizations.

The past two weeks we’ve been in Nairobi, meeting people from our local partner (a Kenyan bank, more on them to come) as well as people working in various parts of International Development in East Africa.

The best way to describe the tone of the past month: excitement. Everyone we’ve spoken with is extremely bullish on Kenya’s potential (despite the international airport, the hub of East Africa, losing a terminal to a fire last week).  People are optimistic that this time things are going to be different.  They have witnessed the rise of countries like China, and are quite justifiably thinking, “Who will be next?”  Africa is in many ways one of the final frontiers left on earth. Though with an increasingly connected world, positive demographic trends around the continent, some decent politicians, and strong pushes against health problems…some countries are positioned to move out of the periphery in the not too distant future.

With that, I’ll sign off.  I’ll leave you with a photo taken from my apartment balcony when the sun finally broke through this past weekend (yes, it’s winter on the equator in Africa right now).

View from my apartment’s balcony (click to enlarge)