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Corporate leadership tips from Kemsa

By Mohammed Guleid | November 2nd 2015

In Kenya, parastatals are Government-owned companies with the objectives of generating revenue and serving the public. They ought to drive economic growth. The success story of China would be nothing without its state corporations.

These are corporates that have outgrown the local economy and carried the Chinese story beyond its borders.

The poor performance of parastatals in Kenya is cliché. The epitome of the leviathan of government bureaucracy is in parastatals. Since time immemorial, governments have sought, but failed, to cut wastage, instil discipline, promote efficiency, reduce corruption, cut red tape and generally ensure a handsome return on investments from parastatals.

From Kanu, to Narc to the Grand Coalition to now the Jubilee coalition. Not that all of them are under par performance. Not at all. In business school, case studies are used to see how best practice has been applied in real situations to make a difference for better. One of the best cases written by the Harvard Business School was the one on Costa Rica.

How the tiny South American country's leaders managed to attract foreign direct investment. And how Intel, a giant American techonology company's decision to invest in a microprocessor plant in 1997, led to the transformation of that country's economy. In total, Costa Rica received an investment of $300 million or the equivalent of 2.1 per cent of its GDP.

President Jose Maria Figueres made an example of his country. Of how to create shared value for his country and a business entity. What is more, because of the demands by Intel, Costa Rica became a more competitive economy in the region, propelling it to a First World status. There are many examples to learn from. Costa Rica is just one of them.

I want to use a parastatal that to me is punching above its weight despite the numerous challenges. Setting up the health function was never a walk in the park for most counties. There are certain parts that are in constant motion at all times; from the personnel, the equipment to the drug supplies. From where I sit, you are never guaranteed of all. All must work in concert.

Where I come from, these things are not guaranteed, but a guarantee for drugs is given. It is where a capsule of an antibiotic means the difference between life and death. And I sought to know why. Our drugs supply from the Kenya Medical Supplies Authority (Kemsa) are always on time, in the right quantity and the correct prescription.

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Three weeks ago, Kemsa scooped the coveted Best Enterprise of the Year Award, a prestigious recognition from the European Business Assembly. Kemsa Chief Executive Officer John Munyu was also feted with the Best Manager Award. Kemsa overcame stiff competition from companies from over 30 countries drawn from various fields including entrepreneurs, health industry, financiers, diplomats, leaders of chambers of commerce, business associations among many others.

You know what, public entities can be managed efficiently and become competitive with optimal results being achieved. The recognition of Kemsa on the international arena negates the deeply rooted historical perceptions that good things only come from the private sector. Kemsa is a shining light. I learnt that Kemsa had overhauled its business strategy to adopt a more customer-centred approach demonstrating that public enterprises have the ability to adopt and implement best practices (Remember Costa Rica?).

And this didn't start last year or the year before. Since 2008, Kemsa has witnessed a 360-degree transformation from a non-performing parastatal that bore the blame for the challenges the public health sector faced at the time to an international award-winning authority. It has shifted from a push medical commodities supply system to a demand driven and not for-profit commercial entity.

Kemsa has adopted a self-sustaining capital mobilisation tactic that has eliminated the reliance on the Exchequer for financing of its operations thus making it independent and guaranteeing continuous medical commodities supply in line with market needs and demands.

Having coined the Medical Super Store business model, Kemsa has enabled counties' health care delivery system function by allowing them to shop for what they want and at their convenience using Kemsa's web based Logistics Information Management System (LMIS) technology. The more than 6,000 public health facilities that Kemsa serve can comfortably purchase medical commodities on real time basis removing unnecessary delays and improving the order turnaround time.

The continuous investment in technology and staff empowerment has seen a complete staff culture change among the Kemsa staff and blends in a combination of good attitude which impact on work performance, industry relationships and ultimately determines future success. Most importantly, Kemsa has aligned its business model to the devolved health care system in order to retain and maintain the delivery of quality and affordable healthcare services further grounding its commitment to improve the health Kenyans.

All this speaks of good leadership that encompasses a transformative mindset, a vision for positive change and dedication to improve the health of Kenyans by streamlining the medical supply chain management.

Kemsa's success story is proof of the fact that with the right change ingredients, a public entity can be a shining light.

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