African Entrepreneurs suffer from venture capital shortage

February 14, 2014

African EntrepreneursLocal Entrepreneurs in Africa are disadvantaged by a lack of venture capital

In an article for Computer World, [November 2013] journalist Rebecca Wanjiku suggests several factors that may be contributing to a shortage of funds for new technology start-ups. There is no parallel with the vibrant venture capital hubs such as Silicon Valley in America or the University spin-off science pars flourishing in Cambridge [American or English versions].

The perceived challenges of businesses operating in Africa as well as the higher costs of due diligence and inexperience of the investors and entrepreneurs in the region have all worked to dampen the growth of venture capital funding for tech start-ups and mid-level businesses on the continent, according to industry insiders.
Local start-ups have held discussions and wondered whether their lack of success in raising big money had racial overtones. Companies run by whites seem to be luckier in securing funds. The problem, however, seems to be more about the perception of inexperience and a lack of contacts than race.
“I don’t think it’s about being white or black, it’s about your network; highly networked Kenyans have an easier time too,” added Erik Hersman, founder of the iHub Nairobi, a co-working space for techies.
“Innovative early stage ventures with the potential to yield high social and environmental impact and requiring less than $500,000 in financing remain the most difficult segment of the SME pipeline to reach,” said Ben White, founder of VC4Africa. VC4Africa is an online portal that brings together 13,000 entrepreneurs, VCs and angel investors interested in Africa. It was kicked off at the annual congress of the African Venture Capital Association in Dakar, Senegal, in 2007. Last year, VC4Africa start-ups secured $80,000 in funding while companies seeking expansion secured an average of $237,000 in funding.
VC4Africa works with entrepreneurs in 40 African countries but the number of start-ups and growing companies seeking funding outstrips the available capital. The lack of in-country funding mechanisms and lack of tech-specific financial facilities from the public sector most likely means that the problems will persist.

Leadership challenges

Leadership challenges abound. The contrast with the developments emerging in China, is stark. A similar sense of the availability of entrepreneurial venture backing is reported in India.


In Chess, Carlsen keeps mum. In Cricket, Cook tells all?

November 14, 2013

In the build-up to the chess world championships Magnus Carlsen refuses to reveal who his support staff are. In Cricket, Australian captain Clarke says England’s captain kindly revealed his Cricket team to him. What’s all that about?

Two little stories about leadership, one from Chess, one from Cricket.

In India there are two sports stories this week about all-time greats. Sachin Tendulkar is playing his last international cricket match; and Viswanathan [‘Vishy’] Anand is defending his chess crown against the new chess prodigy and Norwegian ‘pawn star’ Magnus Carlsen.

Chess trends on Twitter

Yesterday, the official website of FIDE, the international chess organization, announced that chess had become the number one news item of all stories trending on Twitter. The rise of Indian chess owes much to Anand, who has help five world championships (if you include rapid play ones). Carlsen is being hailed as a mega-star who is bringing attention to chess globally .

Magnus keeps mum

At a pre-match press conference, the players were asked out their support teams. Vishy spoke glowingly of his back-up team who help in preparing openings and in studying the play of his opponent. The twenty two year old Magnus thanked him for the information but politely declined the invitation to respond.

Cook tells all

Half way around the world, Australia is hosting their fiercest cricket rivals England. In a remarkable press conference Australia captain Michael Clarke says England’s captain Alistair Cook has revealed the England team to him a week in advance of the test.

What’s all that about?

Vishy says that the players ‘exchanged information’ only after playing the first game. The rest could be no more than mis-information. The same might be true of whatever Cook did or did not say to Clarke.

Was Cook [or Clarke] being a silly billy?

We seem to be entering the region of mind games. Chess is the more obvious mind game, but more many athletes and sporting coaches have gone in for psychological warfare. I have trouble believing the headline that Cook told Clarke the names of the team for the forthcoming test.

Maybe Clarke is trying to make Cook look like a silly billy.


Leadership stories of the week: Bo Xilai, Glenn Greenwald, Narendra Dabholkar

August 22, 2013

In China, the long-running saga of the charismatic leader Bo Xilai reaches court. In the UK, the Brazilian partner of a Guardian journalist is detained at Heathrow. This adds to the Edward Snowden story of the leaking confidential information to the embarrassment of the US and UK government security agencies. In India, Narendra Dabholkar an advocate of rationality, is killed

As this is examination season, I have added brief notes for leadership students.

The Bo Xilai trial

This story of the rise and fall of the charismatic Chinese leader Bo Xilai continues. This week [August 2013] Bo Xilai goes on trial. A long-running drama reaches a critical stage. The story has been followed and been through over twenty updates in an earlier LWD post. These need to be sifted through as a starting point to evaluating what happened in this complex story of leadership, ambition, charisma, and global implications. Writing a post on the trial requires considerable thought or it will be mostly speculation

The Guardian and the latest in the Snowden spy leaks story

In the UK, The Guardian newspaper makes news itself The background to the story according to CNN:

Lawyers acting for David Miranda, the partner of journalist Glenn Greenwald, said they will bring his case to the High Court in London on Thursday [Aug 22 2013] after he was detained at Heathrow Airport.
Greenwald, who works for The Guardian newspaper, has been at the forefront of high-profile reports exposing secrets in U.S. intelligence programs, based on leaks from former U.S. National Security Agency contractor Edward Snowden.
Miranda, a Brazilian citizen, spent nearly nine hours in detention Sunday being questioned under a provision of Britain’s terrorism laws. He was stopped as he passed through London on his way from Berlin to his home in Brazil.

For students of leadership, we have here a typical ‘story within a story’. An examination of the dilemmas facing the various leaders involved is a worthwhile exercise.

The murder of Narendra Dabholkar

In India, Narendra Dabholkar an advocate of rationality and a kind of Indian Richard Dawkins is killed. The story is being presented as the fate of a modernizing leader threatening traditional ‘superstitions’ and perhaps being killed for his views. This is a version of the dilemmas facing reforming and charismatic leaders.

Postscript

Another UK story. The ‘Best and worse Pensions providers’ are named. I would argue that the review is valuable information, but needs to be recognized as being about ‘best current yield’ rather than ‘best Pension’ providers.


Is Myanmar edging towards democracy?

June 8, 2013

There have been acclaimed signs of movement towards democracy in Myanmar. But racial tensions will present familiar challenges for any new non-military leadership

According to the BBC The head of the UK’s armed forces, General Sir David Richards, is visiting Burma [June 2013] to try to build ties with the country’s powerful military. He also met President Thein Sein (a former General) and leaders of the opposition including Aung San Suu Kyi for ‘serious talks’ on support short of lifting UN sanctions.

Steps to democracy

The release from house arrest of Aung San Suu Kyi and her swearing into Parliament [2012] were given global significance as steps in Myanmar towards democracy.

Under Imperial rule, Burma was treated as an outpost of the British Empire. Regional rule was operated from India, which still shows considerable interest in its Commonwealth partner.

Racial tensions

However, the country still faces the challenges of racial tensions as complex and arguably as intractable as those in The Middle East. The Indian Express outlines the tensions that have bubbled over in Malaysia.

Malaysian police said today they had detained more than 900 Myanmar nationals in a security sweep after at least two were killed last week in clashes believed to be linked to sectarian violence back home.
The two dead were likely to have been Myanmar Buddhists.. and the attacks were [reported as] believed to be the result of violence in Myanmar.
Deadly sectarian strife pitting Myanmar’s majority Buddhists against the Muslim ethnic Rohingya minority has flared since last year, in the country’s western state of Rakhine.
Myanmar called on Malaysia to take action against those responsible for the attacks and protect Myanmar citizens. U Maung Hla, who heads the Burma Refugee Organisation in Malaysia, said violence between exiled Myanmar communities here was not uncommon and was “sometimes due to religion.” The Rohingya have been described by the United Nations as one of the world’s most persecuted minorities. About 800,000 are estimated to live in Myanmar, which denies them citizenship, rendering them stateless.

The long walk

The democratic vision is that Aung San Suu Kyi will lead her country in the fashion of a 21st century Mandela or Gandhi (the two leaders she most publically admires). It is likely to be a long walk to freedom.


Riots at Maruti Suzuki halts production

August 17, 2012

Industrialisation has a bloody history of battles between workers and owners. Are the riots in an India car plant a re-run of industrial history?

At least 90 people have been arrested after violent clashes between workers and managers at a Maruti Suzuki factory near the Indian capital, Delhi. A senior factory official died and more than 85 were injured, including two Japanese nationals in the riot. Maruti, India’s biggest car maker, has halted production at the factory.

The blame game

Managers and workers blame each other for starting the clashes, which follow months of troubled labour relations. The violence at the vast factory in Haryana state is believed to have erupted after an altercation between a factory worker and a supervisor.

Workers reportedly ransacked offices and set fires at the height of the violence. It escalated when they tried to take disciplinary action against the employee as other workers protested and blocked all exit gates, preventing senior executives and managers from leaving the factory. The union denied responsibility for the violence and told local media that it was triggered by “objectionable remarks” made by the supervisor.

Leniency a reason for the riots?

The Times of india suggested leniency towards Union bosses was ‘reason for rift among staff’

it appears now that the management of the auto giant may have made a major miscalculation in handling a labour incident only weeks before violence broke out in the factory. [Union leaders were treated in a more lenient way than workers after aggression towards a supervisor].

Meanwhile, the plant remains closed. The company maintains that it is giving high priority to employee safety and is considering several initiatives to scale up safety in the Manesar plant. “In this direction, the company is exploring the best safety measures in terms of equipment, personnel and on ground training for the employees,” the company said in a statement.

The act of unprovoked violence [on July 18th 2012, but July 21st according to some news reports] started without any specific industrial relations issue.

A backdrop of financial losses

The story occurred against a backdrop of losses attributed to increased royalties to Suzuki.

The main reason for the fall was a rise in royalty payments to Japan’s Suzuki, which holds a large stake in Maruti. Analysts said the increase would also affect the carmaker’s future earnings.one observing: “Raw material costs have been easing but the effect of higher royalty payments will be there in the next few quarters”.

Outside of the increased payments to Suzuki, Maruti performed well during the quarter, “The sudden change in royalty charge overshadows an otherwise strong operating performance,” said Chirag Shah at Emkay Global Financial Services.

A similar pattern of violence

Reuters reported [6th August 2012] that other foreign owned car makers such as Hyundai, and Honda have also experienced troubles at their plants in recent years.

“This is definitely sending a wrong message. Investors will be reluctant,” P. Balendran, vice-president at General Motors’ Indian unit, said of the Manesar violence. “The need of the hour is flexible labour reforms. In 2012 you cannot afford to have a rule which is applicable … from 1956.”

A bone of contention

India’s labour laws, some dating to the 1920s, make it difficult for large companies to fire permanent workers, forcing companies to hire large numbers of contractors – a bone of contention with many unions.

“We knew that something of this sort might happen sooner or later,” said Balendran. “It happened to Suzuki today, tomorrow it could happen to us.”

Latest news

Regardless of the reported stringency of India’s labour laws, the company plans to make 500 employees redundant and will re-open the plant shortly [August 21st 2012]. The challenges to leadership are likely to continue.


Coalition crisis in India?

February 17, 2011

India has a coalition government brought about as a reaction to political crisis. The partnership of Sonya Ghandi and Manmohan Singh now faces a political crisis of its own. In this respect there are parallels with the problems of the UK’s coalition government

India and the United Kingdom both have coalition governments facing tough political situations. But the crises they are grappling with also have various differences, making comparisons difficult. A BBC report [abbreviated below] suggests

An unshakeable understanding between Mr Singh and Congress [party] President Sonia Gandhi and Prime Minister Manmohan Singh ensured political stability in the country. Frequent meetings between the two suggested a neat division of responsibility between party and government.

In the past few months, [in early 2011] the personal equation may have continued, but things have begun going horribly wrong for the Congress-led coalition. Inflation, corruption scandals, a massive and ongoing agitation for a separate state of Telangana in southern India, apparent favours in the allocation of land, the abuse of discretionary powers by state leaders: everything seemed to go wrong at the same time for Mr Singh and his government.

Long considered a man of unimpeachable integrity, Mr Singh coasted to a second term as the prime minister of the world’s second most populous nation [in May 2009]. With the opposition in disarray, the Congress-led United Progressive Alliance government appeared to be on a roll.

The Phone-licences scandal

The corruption scandal erupted anew in February 2011. Anil Ambani, chairman of the Reliance Communications, has been questioned as part of a probe into a phone-license selling scandal:

An ongoing investigation is looking into whether mobile phone licences were sold at below-market prices in 2008. Claims that the government lost more than $30bn (£18.6bn) in revenue have caused months of political conflict and shaken investor confidence. Reliance Communications shares have declined 30% in value this year, making them among the worst performers on the Bombay Stock Exchange’s main Sensitive Index. As well as hurting the stock market, the scandal has caused political turmoil in India.

Earlier this month, federal officials arrested former telecommunications minister Andimuthu Raja. They alleged that Mr Raja violated guidelines in the second-generation (2G) phone license sale, and conspired to favour certain telecom companies. India’s chief auditor said in November that the 2G licences were sold for about a tenth of their value. The government has questioned the figure, claiming it is too low.

Above suspicion

Mr Singh seeks to defend his own impressively high reputation as an ethical leader. He claims that the coalition must remain “above suspicion” (the quote referring to Shakespeare’s play and the necessary status of the wife of Julius Caesar). Extreme ethical leadership presents its own dilemmas. Symbolically it places unreasonable demands on most leaders to be seen as beyond reproach, the idealism of a Caesar’s wife. This is a lot to expect of frail human beings in general, and perhaps of politicians in particular. Mr Singh may retain his personal reputation, but the rough-house of politics may make the claims harder to maintain for the coalition in its entirety.

Back in England

Which brings us nicely back to Mr Cameron, Nick Clegg, and their coalition government of conservatives and liberal democrats in the UK. Currently, [Feb 2011] Mr Cameron, while not aspiring to the ethical status of a Caesar’s wife, risks political trouble from his commitment to the Big Society concept. The coalition now risks further unwanted evidence of tensions as Clegg and Cameron lead opposing factions arguing for (Clegg) and against (Cameron) in a referendum for an electoral reform to a transferable vote system.


Cameron is “Napoleonic” ?

July 30, 2010

David Cameron is labelled “Napoleonic” by a former political opponent who later joined his coalition Government. But the term was used to convey the strengths and weaknesses of the great General’s leadership style

Nick Robinson of the BBC [JUly 29th 2010] tells of conversations he had in the run-up to the General Election [May 8th 2010]. David Cameron, he was told, was the only leader in European politics who could be described as “Napoleonic”. Robinson interpreted this to mean he was the only leader who could successfully make policy decisions confidentially and unilaterally.

Neil Sherlock, an adviser to this and many previous Lib Dem leaders, rang to remind me of what the Tory leader had said in a Radio 4 documentary I had made about Disraeli. Cameron had praised Dizzy for outmanoeuvring Gladstone on the issue of political reform and quoted a historian who said that the former Tory PM had “taken a leap in the dark and then leapt again”. Neil’s view was that anyone who could appreciate Disraeli’s bold risk-taking was capable of replicating it. Chris Huhne told me and his party that Cameron was the only Napoleonic leader left in Europe. In other words, whatever the Tory leader said became Tory policy. Both were proved right.

It is tempting to push the analogy a little further. A Napoleonic leader might be expected to

charm would-be opponents into becoming faithful followers

make bold unexpected tactical moves which enhance his reputation

make bold strategic moves which risk his entire venture, and

acquire “nodding donkeys” around him rather than colleagues who influence his plans

This week the Prime Minister has been particularly Napoleonic. He has been accused of media blunders and political naivity. In America he stated that Britain had been a minor partner to the US in 1040, at a time when America had not entered the war (regardless of Hollywood interpretations which suggest otherwise). In India he remarks which were seen as ill-judged regarding Pakistan’s dealings with terrorism. Napoleonic, but are they bold tactical moves or evidence of a dangerous stategy?


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