South African Tsebo and Moroccan Attijariwafa bank started their pan-African adventure at about the same time, around 2005. The two groups have chosen to develop outside their historical borders for very different reasons. After the merger in 2005 of BCM and Wafa Bank, Attijariwafa Bank had reached an important size in Morocco, with market shares of more than 25%. With a strong entrepreneurial culture, Tsebo wanted to propose new challenges to its employees and better support its clients.
Ten years later, these two groups generate more than a third of their income outside of their domestic market: Attijariwafa Bank is the leading bank on the continent by number of branches (more than 4000), with a presence in about fifteen countries from Gabon to Egypt, and Tsebo has about 40,000 employees in more than 20 (African) countries.
At the Africa CEO Forum 2018 in Abidjan, Clive Smith, CEO of the leading business services company, and Boubker Jai, Deputy Chief Executive Officer of the banking group, presented a few keys for a successful pan-African adventure, during a session moderated by BCG.
1 – Think about your geographical expansion in the long term
Clive Smith: “When we started to expand in other African countries, we were not listed on the stock exchange, we did not have to produce quarterly reports and we had the opportunity to adopt a long-term vision. We conducted very extensive research in Africa taking into account various elements: countries, size of customer base, types of products.”
Boubker Jai: “We operated in concentric circles. Morocco being located in North Africa, we first decided to expand in Tunisia. We then tried to move to Algeria, but have so far not succeeded. We reached the nearest markets, such as Senegal. Between 2005 and 2016, we focused on expanding in French-speaking countries, which are relatively similar to Morocco with regards to the language and banking matters. We started to look more seriously into English-speaking countries in 2016, with a first opportunity in Egypt. With 100 million inhabitants, it is a turning point because of a much larger market.”
We have carried out this transformation process in a timely and rigorous manner.
2 – Transform your organization
Boubker Jai: “We were in a comfortable position when we were in our own market. To step out of our comfort zone, it was necessary to generate changes in our organization to recruit resources originating from our targeted countries and hence enable us to manage larger and more diverse teams. We have carried out this transformation process in a timely and rigorous manner. Today we operate as a single multicultural company, very close to our markets.”
We have developed management structures with local skills.
3 – First and foremost, be local
Boubker Jai: “Africa is a continent composed of 54 countries, each of them with their own cultures and characteristics. It is necessary to adapt, to get to know the market and the local authorities. We are Ivorians in Côte d’Ivoire, Senegalese in Senegal. We don’t have a vision focused solely on profitability, with the risk of leaving the country if the profits are no longer there. We are Africans first and foremost and we have a long-term commitment.”
Clive Smith: “No one knows how to operate in Africa better than Africans. And no one knows how to operate in each country better than the nationals of those countries. We have developed management structures with local skills capable of adapting our services and processes to their countries. This gives us a real strength compared to foreign multinationals.”
Our international competitors have failed in their understanding of cultural diversity.
4 – Train massively
Clive Smith: “When our international competitors tried to establish themselves in Africa, their services and products were at least as good as ours, but they failed in their understanding of cultural diversity, of the lack of local skills. We have developed a very solid training system, adapted to thousands of employees and even with mini MBAs for 300 people over the past year or two.”
Growing up in Africa: BCG’s analysis