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Taking painful executive decisions is all in the job

FINANCIAL STANDARD
By | July 19th 2011

By Kenneth Kwama

When two of the largest companies in corporate Kenya — Safaricom and Kenya Commercial Bank (KCB) — separately announced restructuring of top management earlier this year, the CEOs of both companies kept a happy face in public, but behind the faÁade, the announcements triggered anxiety among employees that nearly disrupted services.

At KCB, all the bank’s senior managers with the exception of the CEO were expected to re-apply for their jobs under a new organisational structure that saw some senior managers relegated and others left out.

At Kenya’s largest mobile company, Safaricom, the situation was no different. As top managers were busy reapplying for their jobs, panic set in among other employees.

The CEO, Bob Collymore, was forced to come out in the open and assure employees of their jobs because tension had heightened.

He clarified that the restructuring the company was undertaking was not aimed at retrenchment, but was a customer-centred move. He said none of the 3,000 employees of the telecoms firm would lose their job on account of the changes.

Meanwhile, at KCB, the anxiety had gone fever high because out of the close to 5,000 employees of the bank, only one man: the CEO Martin Oduor Otieno was confident he would keep his job after the exercise.

"Asking people to reapply for their jobs at that time is one of the toughest situations I have ever found myself in," says Otieno.

"At one time, I was the only man left standing in senior management with a job."

The massive restructuring exercise at KCB was meant to cut operational costs and help the bank increase its margins across its branches in the region.

The move at Safaricom was unprecedented given its history of mega profits because people had expected Collymore to retain the core team. When he decided to shake it, it offered a glimpse into the new MD’s management style.

Management Style

At other corporate giants, the chief executive can shrug off criticism and bulldoze their way. But this was not going to happen at Safaricom. Burning with desire to align the company’s top management with his new leadership style, all the 13 chief officers were asked to reapply for their jobs.

This is because the mobile company had realigned its talent into three main groups: Enterprise, covering the growing IT services segment, Consumer, representing its core telephony and data business, and the Financial Services division, which encompasses the growing M-Pesa segment.

The reshuffle saw the exit of two key managers — Robert Mugo and John Barorot — from the firm’s technical centre. Peter Arina, formerly the firm’s Chief Commercial Officer, was appointed to head the consumer division, while Betty Mwangi, formerly head of new products, took over as head of Financial Services division.

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