Aliko Dangote: 7 Powerful Business Lessons From Africa’s Richest Man
Many people in Nigeria and Africa wish they could be successful and prosperous like the great Aliko Dangote, The richest person in Africa, but like the proverb goes ‘if wishes were horse beggars would ride one.
The unfortunate thing however, is that wishing for a thing would not make it a reality. You have to be willing to invest time and hard work to achieve any goal in life.
Most of us wish to be captain of industries and CEOs of multinationals, others wants to be the very best in their chosen field of endeavor. Yet, we need certain knowledge and skills to achieve our most cherish goals.
Most people go to the most expensive Ivy League schools to acquire an MBA in other to have the competitive advantage required in today’s work place.
The question remains, how many of these MBAs have the skills and experience to build a company that will one day go public? Your guess is as good as mine.
Statistic shows that most founders and successful entrepreneurs who built and sold companies are either school dropout or first degree holders but have benefitted from real life experience.
Experience they say is the best teacher, but life as it is, is too short to make all the mistakes that will arm you to face life challenges in business.
Knowledge is power only if you know how to apply this knowledge. One way we can learn to be successful is to be humble enough to understudy successful people.
So if by understudying the life and work of Aliko Dangote, the greatest businessman in Africa you can get an overwhelming understanding of the secret of running a world class company, why not?
Follow me as we dissect some of the factors that make Aliko Dangote the most successful black man in the world.
HE HAS THE ABILITY TO SEE OPPORTUNITIES AND RECOGNIZE TRENDS IN BUSINESS.
One quality every business man must possess is the ability to recognizing opportunity when he sees one.
Aliko is an adept at recognizing opportunities and trends. He started from the humble beginning as a commodity trader. He traded in food stables, including rice, vegetable oil and other commodities.
He made the most of it, and for four years. He moved into transport, buying trucks and importing goods. The ease with which he transited from a commodity trader to a big manufacturer is difficult for many business analysts to comprehend.
He benefited from focusing on the big picture (goal) of the business. That is why at every stage of his small business he was always looking for an opportunity to grow and he has the ability to predict the trend before the business world becomes aware of it.
As a cement trader he was buying from local manufacturers and importers.
When the Government found out that the supply was not enough to meet local demand, they grant tax waivers for people to import cement into the country, because he was ready and had been preparing for an opportunity such as these, he swiftly made the change to become an importer.
Gradually he saw the opportunity in manufacturing and metamorphose into a manufacturer of cement producing about 20million tons annually.
This same ability to spot opportunities has led him to diversify into flour. His mill is currently the largest in Nigeria. His sugar refinery located at the Apapa Port is the second largest in the world.
The group is current building factories which are either completed or at different stages of completion in Ethiopia, Cameroon, Democratic Republic of Congo, Ghana, Tanzania, and South Africa among others.
‘’I built a conglomerate and emerged the richest black man in the world in 2008. But it didn’t happen overnight. It took me 30years to get to where I am today.
Youths of today aspire to be like me but they want to achieve it overnight. It’s not going to work. To build a successful business, you must start small and dream big. In the journey of entrepreneurship, tenacity of purpose is supreme’’
– Aliko Dangote
HE UNDERSTANDS AND KNOW THE POWER OF BRANDING AND MARKETING.
There is power in branding. That is one thing that set Aliko Dangote apart from the others. The Dangote brand is associated with shrewdness and excellence of his person.
He built this brand from his days as a trader and jealously guided it as he became a world class manufacturer.
Every entrepreneur knows that if he must be successful he must diligently build his company into a brand the customers must identify with.
In an interview with the Nigeria Sun, He talked at length about the Dangote brand:
‘’My story is that of a man and a brand Nigerians have come to know, to have and to accept. Nigerians are investing in us because they believe in the name Dangote, apart from believing in us we have a track record which we have actually shown.
If you look at all our factories, they have grown steadily and gradually to where we are today. In all modesty, we can say we have done very well. There is no business that we are into and we are not number 1.
The worse one we have, maybe we are second position. That itself is our business strategy. We aim to dominate in our market to lead in every market segment. They have all been run efficiently and professionally by people who really know the business very well.
We have a very good brand name and that is part of what many people are actually investing in. They are investing in the Dangote brand.
They believe in my own business acumen but it is not the only thing that people are investing in. They are investing in the Dangote brand’’ he said.
Dangote is also a good marketer he is never shy of talking with the press always presenting the group unique selling point.
He never let an opportunity to market himself and his companies pass him by. This has given him an edge over the competition.
HE TOOK CALCULATED RISK TO GET THE COMPANIES TO WHERE THEY ARE TODAY.
Many entrepreneurs remain small because they simply would not assume a bigger risk to get their business to where they want it to be. In truth taking risk in business is not for the lily livered.
A lot of people have been wiped out for taking big risk. It is only real entrepreneurs that sees opportunities in very risky areas, yet go in there with the hope of making profit. Business is about taking risk and local entrepreneurs that are not ready to take risk remain small.
Dangote saw the opportunities in the very uncertain and tough business environment in Nigeria. From trading in rice, sugar, and other commodities, he veered into manufacturing in an environment many local and foreign investors see as very risky.
In his (Aliko) early days of his foray into manufacturing, he was indebted to banks to the tune of about $50billion according to Uzoma Nwankwo who was head of risk management and later director of finance at the Dangote group. ‘’I recalled Dangote coming to see me.
Dangote was transforming his trading company into manufacturing and had solicited a loan from the bank.
The bank gave him the loan because they saw the potential in manufacturing but was worried how he would pay back’’. Uzoma said, Uzoma who now runs his own financial consulting firm said at a point Dangote was indebted to banks to the tune of $50 billion.
And he continued to sell his properties in London and the US to underwrite his businesses. At this point he was building the Obajana cement factory. He got to the point where he had to request for a meeting with the banks.
In the meeting he told the banks that they have a choice to either support him finish the factory or push him into bankruptcy.
Providence was on his side the bank saw his vision and gave their support to finish the factory. A few years later the factory became profitable and the loans were paid. That was a close shave.
‘’The banks believe in my brain, they believe in my capacity and ability of doing things and they would come long. When they see the plan they would ask:
Do you have 20 or 30 percent? I said yes, I have it they gave it to me and it is done. They need me also, because without a good entrepreneur all the money that the bank has would become stale. They won’t need the money.
They just don’t give you their money. They have to see that it’s going to have very good returns. When we presented Obajana cement project the banks asked: Will this be possible?
Will this concept work? For an entrepreneur, everything starts with a dream which we turn into reality’’ – Aliko Dangote
HE SYSTEMIZED THE BUSINESS AND EMPLOYED SMART PEOPLE TO RUN THE SYSTEM.
No successful businessman can run a business as big as the Dangote group without systemizing it and putting round peg in a round hole to run the system.
Today the group has branches all over Nigeria and in sub Saharan Africa. When asked how his numerous companies is been managed. He said:
‘’my companies all operate as separate entities. They are all on their own. Each company has a board and their own management. They are all linked to the head office.
What we do here at the head office is to monitor what they are doing. We have the responsibility of making sure they perform. Each company has its own budget and we hold them on their budget.
There are some things that we have shared services. Things like legal, human resources, corporate branding. For example a company likes Obajana which is a billion dollar investment, since the day we went for the opening I haven’t gone back there.
But it is operating, it’s giving people their cement, they are selling and we are counting our money every day. So I don’t need to be there.
But we are looking at what they are doing. And in areas where they are going off course, we are pushing them back to make sure they operate according to the rules and regulations’’
HE INVEST IN BUSINESSES WHERE HE HAS COMPETITIVE AND COMPARATIVE ADVANTAGES
When he started cement trading in 1978, Dangote was concerned he would not be able to compete with Lefarge, the French multinational that had been the dominant cement suppliers for decades.
But he didn’t doubt the market potential. Before the entrance of Dangote into cement importation, Nigeria as a country was consuming 10million -15million ton every year while Lefarge was manufacturing less than 1million tons domestically.
The rest was imported. Dangote now has plants across the country producing about 20million tons of cement and exports to Ghana. He plans to produce more 15million tons by the end of this year.
He has tactically stocked to the businesses he has preference for from his days as a trader of commodities because that is where he has the experience and skill to outwits and outsmart the competition.
His knowledge of the sugar, salt, cement and other commodities gave him the competitive edge and advantage. Although as a shrewd businessman he has proven his mettle and has grown in confidence to test the murky water of the oil sector.
If his refinery the size of both Warri and Port Harcourt refineries combined comes on stream it would alleviate the problem of importation caused by the moribund refineries in the country.
HE POSSESSED GOOD NEGOTIATING SKILLS
Years ago his negotiating skill was tested to high heaven when he bides to take over the moribund Benue Cement Company. The natives saw him as an usurper coming to take away their birth right.
He failed many times to take over the plant. After series of hiccups he triumphed, in the process earning an MBA himself from the University of Hard Knocks. Since then he has won many battles in the art of negotiation with the banks, Governments and even the locals in places where he has his plants.
As a businessman, without a good negotiating skill you won’t go far in business. Dangote is a master in the art of negotiating that’s why he is in most Africa countries.
A case in point was when he went to Tanzania and tried to make an investment of $600million to build a cement factory to ease the shortage in that country domestic supply.
Dangote said the Tanzanians were skeptical. ‘’ They didn’t believe us at all. They thought I was one of these Nigerian 419 scammers who try to scheme people out of their money’’ He said ‘’’or just one of these clever Nigerians who would come and be lying to them’’ Not long after his visit, his name appears on a list of the world’s wealthiest people, and the Tanzanians realizes they’ve been talking with Africa’s richest man.
HE GIVES BACK TO LIFE
HE knows the importance of giving back to life. The Dangote Foundation has made so many donations and continued to make donations to a worthy course. The foundation has committed huge sum of money in the area of education, health and economic empowerment. Some of the donations the foundation has made are:
Donation of the sum of $500,000 to UNICEF to fight the outbreak of measles which affected many state in Nigeria.
Donation of the sum of $6.4million toward the building of a world class International Cancer Center in Abuja in 2009.
Donation of two dialysis Machine to Lagos General Hospital Marina, in conjunction with the rotary club of Victoria Island.
Donation of $2.6million to flood victims in 2012, among others too numerous to mentioned.
Recently he gave out millions of dollars to the African Union to fight the Ebola scourge ravaging many part of Africa.
Written by: Patrick Paul Lukpata