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September 26, 2018

Businesses Don't Fail - Leaders Do

Bankrupt: Kenya Airways on Thursday announced a Sh29.7 billion pre-tax loss for the financial year ending March 2015.
Bankrupt: Kenya Airways on Thursday announced a Sh29.7 billion pre-tax loss for the financial year ending March 2015.

Watching the unfolding saga of KQ last week, it was easy to see that there would be an instant blaming of external factors. Let me say it here and now – rubbish. The whole terrorism, tourism numbers thing doesn’t hold any water.

You and I know it, so I will not insult your intelligence by wasting another word on it. Many comparisons were made between the massive failure at KQ and at Mumias and those comparisons are spot on – I’ll explain in a moment.

But please note, on the very same day at about the very same time the Kenya Airways results were being released, the KCB half year results came out. KCB Group’s profit before tax grew 13 per cent in the first half ending June 2015, riding on increased earnings from new business lines and the international business.

Well done Mr Oigara – however don’t feel awful that we didn’t focus on you at all. Two things - if it bleeds, it leads and KQ has a big knife wound that won’t clot. Secondly, nobody expects anything less from you.

Now back to the patient bleeding on the floor in the emergency room – KQ. Once you strip away all the excuses, the fuel hedging, the purchase of the massive Boeings and the Ebola issue, we really must get down to why we lost millions daily and no-one called for an emergency landing.

I believe you’ll find only one plausible reason for the failure of the singular biggest carrier in Africa after SAA - poor leadership. Corruption plays a part, but corruption in and of itself is a mark of damaged leadership. Businesses don’t fail – leaders do.

Mike Myatt is a contributor for Forbes and a man I love to read. He writes the way a bare knuckle boxer fights. Please look him up.

His article came to me about three years ago as I was working on my exist from the studio to the c-suite. Today, I’m paying homage to his radical thinking by not messing around with what he said in 2012 - Businesses don’t fail – Leaders do. Repeat that phrase to every guy who is whining that the business environment is hard.

So why do leaders fail? Myatt says right off the bat, Lack of Character: It doesn’t matter what your title is, if you don’t do the right things for the right reasons you will fail. In Kenya, its ego, a need to show up people, a kingpin mentality and forgetting who the ultimate boss is – the consumer and shareholders.

In the case of KQ, I recall a CEO who once told me that when he complained to top management about the awful experience from check-in to landing, he was told “boss, you don’t have to fly KQ.”

Leaders who don’t display character won’t attract it or retain it in others. Look at the limping, bleeding businesses in our midst. If the leaders have character, so do the people they seek and hire and that DNA is reflected in everything they do. My friends – businesses don’t fail, leaders do.

Lack of Execution: This one is Mohammed Nyaoga’s favourite peeve. He says we all look good on paper, but we fail on execution. Everything boils down to execution, and ensuring a certainty of execution is job number one for executive leadership.

Talk is cheap. It doesn’t matter how matter times you go before the board and layout grand plans and projections, if you don’t do the work, you will fail.

Another area where leaders fail and happily take the business with them down the shaft, is when they embark on a flawed strategy. It is said that companies tend to succeed by design and fail by default. Myatt says “show me a company with a flawed strategy and I’ll show you an inept leader”.

Let me say it again for good measure, businesses don’t fail, leaders do.

In the wake of the collapse of Uchumi a few years ago (back in ICU today), the beheading at Mumias Sugar, the death of KCC, the near death experience of Kenya Airways – it’s very easy for someone to simply send all the managers home.

I agree, but with a caveat – send the top leadership and board home as well. It is the job of leadership to recruit, mentor, deploy, and retain management talent. If the management team is not getting the job done, it’s not a management problem, it’s the fault of executive leadership.

Show me a leader that blames his management team for failure to execute and I’ll show you a poor leader.

So watch carefully over the next few days – if we start picking on managers to fire to cover our own arses, then tell the top leadership to pack and go as well. Same thing with the auditor general’s report.

There are people who won’t like the idea of being asked the tough questions and will quickly blame their direct reports. The buck stops with the people who get paid the most bucks.

This one I have borrowed straight from Myatt and it rings true for business and as well government. The truth is nothing stifles productivity and creates conflict like a toxic culture.

That’s why we are told that culture eats strategy for breakfast. All the plans in the world don’t matter if the culture of the organisation is ‘whatever.’ So in the fine words of Myatt “If the lunatics have gained control over the asylum, be sure to fit leadership for a straight-jacket as well”.

When the television shows and the interview circuit is done, it is my hope that the Kenya Airways board and top management will do what needs to be done. Yes Mbuvi Ngunze is a great guy – but he and his team knew there was a problem even as he took over from Titus Naikuni. He didn’t come into Kenya Airways, he served as COO before.

Last year when he announced the financial results for the period ended September 30, 2014 the airline announced a net loss of Sh10.5 billion – how we got to double that figure in eight months is an issue we must investigate soberly.

There are difficult decisions to be made in the coming days and months and leadership will be displayed in making those decisions. Bottom line…businesses don’t fail – leaders do.

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