Founder instinct should not be casually dismissed by professional managers or consultants. Some of the strongest commercial judgement I have encountered resides in entrepreneurs who know their markets with extraordinary intimacy. The difficulty arises when that knowledge and authority remain permanently concentrated in one individual.
economics, customer behaviour, regulatory structures and operating risks. Regional strategy needs to be built market by market rather than assumed from geography.
The financing landscape itself is also broadening. Bank lending remains central, but businesses increasingly need to understand private credit, growth equity, venture capital, mezzanine structures, asset finance and blended-finance solutions.
Each form of capital carries different costs, risks and expectations. A company financing long-lived assets with short-term working-capital debt, for example, creates a different risk profile from one matching the tenor of financing to the economic life of the investment.
For this reason, capital structure is part of corporate strategy. The sophisticated CEO increasingly needs to understand capital almost as deeply as the CFO.
Strategy needs to move closer to the economics of the business
Most established companies now undertake some form of annual strategic planning. The difficulty is that the resulting plans often contain objectives that are directionally sensible but strategically undifferentiated: grow revenue, improve customer service, digitise, enter new markets, develop talent and improve efficiency. These may all be desirable. They do not necessarily constitute a strategy.
After working on both sides of this problem- as an executive responsible for delivering plans and later as a consultant helping organisations develop them- I have become increasingly convinced that the quality of strategy is revealed by the choices management is prepared to make: Which customers? Which products? Which geographies? Which channels? What capabilities? At what margin? With how much capital? And what are we deliberately choosing not to pursue? This is particularly important in regional businesses.
East Africa may increasingly operate as an economic bloc, but it is not a homogeneous commercial market. Kenya, Uganda, Tanzania, Rwanda and the wider EAC differ in consumer purchasing power, channel structures, regulation, logistics, taxation and competitive intensity. A regional strategy therefore needs to be constructed from the underlying economics rather than from a map.
For a consumer or industrial company, management may need to understand
Founder instinct should not be casually dismissed by professional managers or consultants. Some of the strongest commercial judgement I have encountered resides in entrepreneurs who know their markets with extraordinary intimacy. The difficulty arises when that knowledge and authority remain permanently concentrated in one individual.
profitability by country, product, customer, channel and route-to-market. Aggregate revenue can otherwise conceal significant cross-subsidisation.
One customer may appear strategically important because of volume while destroying value through discounts, credit, returns and high service costs. A smaller customer may generate considerably better cash returns.
A strategy is stronger when management understands not merely where revenue originates, but where economic profit originates.
Digital businesses have reinforced an old lesson
East Africa ' s digital economy has transformed financial services, retail, logistics, communication and customer acquisition. It will continue to create new business models and challenge established ones.
But the experience of technology companies across Africa has also reinforced a basic principle: digital scale does not eliminate the need for viable unit economics.
The evolution of Sokowatch into Wasoko, and Wasoko ' s subsequent combination with Egypt-based MaxAB, is instructive. The broader African technology sector has had to adjust from an era in which growth and gross merchandise value could dominate investor conversations to one in which margins, cash consumption and credible pathways to profitability receive considerably greater scrutiny.
For somebody who has spent much of his career in physical distribution, the parallels are striking. Whether an order is captured by a salesperson with an order book or through a sophisticated digital platform, somebody still has to finance inventory, pick the order, move the product, manage returns, collect cash and earn sufficient contribution to cover the infrastructure supporting the transaction. Technology can radically improve those activities. It cannot make their economics irrelevant.
This should not be interpreted as an argument against technology investment. The more useful lesson is that technology is most valuable when it improves the underlying economics of the business.
A distributor using digital tools to improve demand forecasting, reduce stock-outs, increase truck utilisation and lower sales-force cost-to-serve is creating tangible economic value. A manufacturer using data to improve yield, preventive maintenance or inventory management is doing the same.
Artificial intelligence will extend these opportunities further, particularly in forecasting, customer analytics, process automation and management information.
The appropriate measure of digital transformation is therefore not the number of applications deployed. It is the improvement in productivity, customer economics or decision quality that those investments generate.
Management capability is an economic variable
There is another constraint that receives less attention than finance: the depth of senior management capability. Many East African companies have grown from entrepreneurial businesses into substantial organisations within one generation. Their management architecture has not always developed at the same pace.
This is something I experienced directly while leading a fast-growing, private-equity-backed business. Scale changes the management problem. A business that could once be managed through relation
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