INTERVIEW WITH KENNETH KWAMINA THOMPSON
What drove the exceptional and even phenomenal growth of the last 3 years?
It was the triumph of business strategy even in an adverse economic environment.
Circa 2012, but this time looking into the future: The election results are inconclusive … the parties are in court providing the highest rated daytime TV soap opera( or reality TV show) in Ghana.
The economy of Ghana is comatose as everybody and every business plays the wait and see game. The silence is at the same time eerie and deafening.
The Cedi exchange rate starts to take a dive. In 2012 November, I had my epiphany at a leadership course at the Wharton Business School in Pennsylvania, USA.‘ The accountant’ was now a convert to the essence of business growth, strategy, culture, innovation and all the latest business jargon.
The‘ Bean Counter’ now had a deep desire to grow DALEX albeit in a much more difficult economic environment. DALEX would need to segment markets, identify competitive advantages, position brands and align strategy. To succeed we would need to innovate rapidly in both markets and products. 2013-2019 was my opportunity to lead DALEX to a 7-year vision with‘ Big Hairy Audacious Goals’. To achieve the new growth goals, the practice of business strategy, culture, etc. would have to deliver beyond the expectations of my Wharton lecturers.
In practice, what did DALEX do?
• Convene business strategy sessions using external facilitators and best practices. These sessions were designed to exploit the in-depth practical knowledge of staff and the external perspective of non-industry practitioners.
• Undertake Design Thinking tournaments to speed innovation where the range of participants were broadened to span markets rather than just industry experts.
• Undertake detailed branding exercises for existing and new products seeking to clearly establish our brand distinctiveness and comprehensive alignment of all elements of business and marketing strategy.
• Take a venture capitalist approach to piloting new ideas and products ensuring that ideas and products were comprehensively tested and learnings were rigorously extracted. The objective was to apply the learnings and not for pilots to necessarily succeed.
How did the strategy impact the DALEX business?
The most significant impact was on the distribution and transaction speed of Salary Loans:
• Distribution was changed from a primarily urban focus to a rural and peri-urban focus. This was literally to move from a‘ Red Ocean’ to a‘ Blue Ocean’ market. Our higher priced loans were better able to compete in the rural and peri-urban areas.
• Distribution changed to a Fast-Moving Consumer Good( FMCG) model. From a branch sales model to an independent agent model. This enabled us to reach every district in Ghana without the cost of“ brick and mortar” branches.
• Transaction speeds were greatly improved by technology in the form of innovative mobile phone apps. The mobile apps allowed independent agents to undertake credit scoring and also initiate disbursements.
• Loan disbursements were made from a single central source over the mobile money platform. This provided several benefits: improving speed of disbursement, removing cash carrying risk of agents, and, providing convenience to the clients through the network of over 50,000 mobile agents.
What were the business results?
Salary loans business results were outstanding: Between Jan 2013 and July 2016, Salary loan disbursements increased by 1,375 % from an average of GH ¢ 800,000.00 to GH ¢ 11,000,000.00 a month.
• Salary Loan sales agents increased from 120 to 2000 persons from 2013 to 2016.
• Salary Loans profits went up by over 500 % from end 2012 to end 2015
What do you say to emerging businesses like DALEX?
Do not neglect strategy! Be different!
38 Business Times Africa | 2016