In Leaving the tarmac, Nigerian Entrepreneur and former group managing director of Access Bank Plc shares how he and Herbert Wigwe turned Access Bank, a crisis-prone Nigerian Bank they bought in 2002, into one of the most admired banks in Nigeria and Africa. Aigboje gives the readers a front-row seat to the challenges, setbacks, successes, and failures they had to deal with in the process of building a world-class financial institution in an environment like Nigeria.
The book provides insights, lessons learned, a history of Nigerian banking, banking regulation, and a blueprint for dealing with the government while running a thriving business in Nigeria. It is a story of grit, getting things done, building a great team, the power of timing, and striving for excellence.
As part of the global launch of Leaving the Tarmac: Buying a Bank in Africa, Mr Aigboje Aig-Imoukhuede is offering internships to five exceptional young Nigerians.
I was excited to read the book because most successful Nigerian business leaders/Entrepreneurs hardly share their success stories. It can be hard for aspiring Entrepreneurs to read their own version of their journey. Leaving the Tarmac is a relatable story about the ups and downs of running a business in Nigeria, continuous improvement, learning through best practices, and connecting the dots by seizing the opportunities around you.
Favourite Takeaways – Leaving the Tarmac
Aigboje Aig-Imoukhuede opens the book with:
It is a story that shows how you can build a world-class business in a relatively short time if you lay the right foundations, have good core values, and do the right things. It is also a snapshot of a decade in which an enormous amount has changed in the world of international finance, politics, and power, particularly within Africa.
The Tarmac Story
I was born in Ibadan to parents who were both in the civil service. We moved to Lagos soon thereafter and since then Lagos has been home for me. At the age of ten I was privileged to attend one of Nigeria’s elite Unity Secondary Schools, the Federal Government College Kaduna, which was a thousand kilometres by road from Lagos. The two popular means of travel at the time for schoolchildren were trains or commercial aeroplanes. Apart from my maiden journey to Kaduna to attend the school for the first time, and another occasion when my mother was attending a National Council of Women Society event in Kaduna, which happened to coincide with my travel date, on all my journeys to and from school I was unaccompanied.
On this particular occasion I was flying alone to Lagos, just me and my small suitcase sitting in the departure lounge, waiting nervously for my flight to be called. I was flying Nigeria Airways, then the only way to fly commercially within Nigeria. The airline was a bloated state-owned monopoly that personified all that was bad about government running a business. It was bureaucratic, corrupt and provided an atrociously poor level of service; getting on board a flight required connections with the ground staff and a confirmed ticket never guaranteed you a seat on the plane. But in my innocence I did not know how it all worked.
When the airport staff announced that the plane was ready for boarding there was suddenly a mad scramble as the more experienced passengers leapt to their feet and dashed out to get on board. As I struggled towards the plane with my suitcase I was elbowed out of the way by many people much bigger and stronger than me. By the time I reached the bottom of the steps to the plane the door at the top had been slammed shut, all the seats having been filled. As I stood with my suitcase, watching the plane take off without me, tears streamed down my face and I vowed that never again would I be left behind on the tarmac while everyone else was flying off.
As I stood with my suitcase, watching the plane take off without me, tears streamed down my face and I vowed that never again would I be left behind on the tarmac while everyone else was flying off.
At the beginning of my career I was inspired by reading books about the success of great American and European bankers such as the Rothschilds and J.P. Morgan, and about companies like Sony, Apple, and Hewlett Packard, books that were always readily available in airport bookstores.
Business Literature on African/Nigerian Businesses
There has been very little, however, written about African companies or indeed Nigerian businesses, despite the fact that some of these organizations possess the most interesting business stories of our times, and despite the fact that Nigeria has the potential to be one of the most successful economies in the world if the right business philosophies can be introduced and adopted by the big companies as well as by the politicians and others in positions of power.
Historically the private sector in Nigerian business has not been strong on issues of emotional intelligence. A business community where the hard IQ issues of growth, expansion and profitability dominate so totally is bound to face difficulties in a modern world where a greater degree of sophisticated thinking is needed in order to tackle corporate issues such as risk and sustainability.
In my view the world’s developed economies started out by putting an emphasis on leveraging the factors of production to the highest degree of efficiency with little consideration for environmental, social and other such issues. As their businesses matured they learned to act in a fashion that would ensure their long-term sustainability, particularly as regards their role and relevance to their host communities.
Commercial and Merchant Banks
When I commenced my banking career in 1988 there were two main banking models that characterised the sector; Merchant Banking and Commercial Banking, the first also called wholesale banking involved providing corporate loans, debt/capital advisory services and other financial solutions to large corporate customers, the second commonly referred to as retail banking involved cheque/cash handling services, and other financial solutions to individuals and corporate customers. The leading Merchant Banks maintained technical partnerships with well-respected American Investment Banks and I recall that four Merchant Banks stood out namely:
- Continental Merchant Bank, (Chase Manhattan Bank),
- International Merchant Bank (First Chicago),
- ICON Merchant Bank (Morgan Guaranty)
- NAL Merchant Bank (American Express Bank).
The Commercial Banks were dominated by the ‘Big Four’, namely
- First Bank (originally Standard Bank),
- Union Bank (originally Barclays Bank),
- United Bank for Africa (UBA), a joint venture led by the French bank BNP and
- Afribank, formerly the International Bank for West Africa (BIAO).
All of them had been indigenised as public companies quoted on the Nigerian Stock Exchange; their ownership comprised the Nigerian Government as well as the general public. Employees of the big four started at the bottom rungs of the career ladder rising through the ranks as clerical officers into positions of management in a somewhat pseudo colonial working environment.
No Knowledge is wasted
Immediately after law school I joined Continental Merchant Bank3, one of the yuppie merchant banks. I soon discovered that I enjoyed the practice of banking far more than functioning as a legal officer and decided that at the right time I would make a move to core banking, a decision I have never regretted. My three years as a legal officer, however, would prove invaluable throughout my banking career. Nothing is ever wasted when it comes to accruing knowledge, experience and skills.
Chapter 2: Buying the bank
The ability to sustain the change required to turn around a distressed bank depends more on the quality of its leadership and the strength of its values than the expertise of the management consultants who are engaged to try and put things right.
I chose, however, not to dream alone of owning my own bank. I made sure my professional colleague and friend Herbert Wigwe drank some of the same entrepreneurial juice and managed to get him thinking along similar lines. We were the same age, born just one month apart, and both of us had parents who were civil servants. We both went to Federal Government colleges, which were fiercely competitive and where you were taught how to be independent. Our colleges had also afforded us an understanding of Nigeria and the true meaning of federalism, given that Unity Colleges were melting pots of Nigeria’s many ethnic and tribal groups. We both understood the importance of forming alliances and making broad friendships. Herbert was a chartered accountant and economist and I had studied law. We had both chosen to get into the banking sector after qualifying and having met through mutual friends in 1989, we both ended up working at GTB in 1991.
Herbert and I had worked well together at GTB, where he had managed the entire portfolio of corporate banking relationships. Between us we felt highly confident of succeeding in the gargantuan task we were taking on, although we could not possibly have predicted the financial turmoil which was to rock the world, including Africa, over the coming decade, and the enormous scale of the changes that would take place throughout the Nigerian banking system. Herbert attended the same three-month senior management programme at Harvard the year after me, by which time I had already planted the seeds in his mind about the possibility of us buying a bank together. He tested the idea against everything that he learned in the classroom in Harvard and returned to Nigeria at the end of the course feeling as certain as I was that this was indeed the right way to go.
I liked the idea of having a partner for this venture because I believed that this way we would have ‘four eyes’ of leadership instead of two, which is always a good idea in any situation, particularly one as complex as building a bank
Buying the Bank at 36
Despite this hitch we had become the owners of the bank in March 2002. At that time I was still only thirty-six years old, but I already had had ten years of senior management banking experience at GTB, where I had risen from being middle manager to working next to the managing director at the top of one of the best-run banks in the country and had been privileged to learn the secrets of building a highly successful business.
At the beginning of the new century the ten largest Nigerian banks accounted for around half of the industry’s total assets and liabilities, while most of the rest of the country’s banks each had a capitalisation of less than ten million dollars. Even the largest bank only had a capital base of US$240-million, half the size of the capital base of the smallest bank in Malaysia.
Beyond bribes, leakages and theft of public funds, the truly debilitating consequence of corruption is the fact that in any nation where corruption is rife, merit cannot have its way. In a globalised world the ability of individuals, companies, industries and entire nations to grow and develop on a sustainable basis is a function of their competitiveness. Corruption has implanted the virus of mediocrity in several aspects of Nigerian life to the point where our performance in many fields of endeavour is much worse today than it was fifty years ago.
Lucifer Effect theory, which argues that within all men lies an inherent capacity to do evil.
Products can always be imitated by competitors but service delivery cannot. Service, therefore, was inevitably the battleground for increasing our market share and we had to ensure that we continuously redefined our service standards to attract and retain our target customers. While we were able to deliver an extremely high level of service in our first five years, the challenges of rapid expansion and inorganic growth became a major issue and we struggled to maintain high standards of service across the entire value chain following the acquisition of Intercontinental in 2011.
There are too many unexplained coincidences, accidents of timing, events of chance that can only be attributed to the Almighty.
We were determined that we would not become a paternalistic organisation, which was how the godfather-run banks had operated in the past. We wanted to maintain a competitive, professional edge. We were determined to resist the temptation to go soft before attaining our goals. We didn’t, for instance, intend to go for large, grandiose offices and we kept our office doors open for anyone who wished to pop in and discuss any subject.
‘The Access Way’ – Crafting the Access Bank Culture
Whenever I read the stories of successful companies such as Sony and Hewlett Packard, I was always struck by the amount of time they invested in thinking through their corporate cultures. They would have the ‘Sony Way’ or the ‘HP Way’ all written up so that new recruits knew exactly what they were buying into. We wanted to do the same and so together with Bolaji Agbede, head of Human Resources for Access Bank plc, we wrote a guide called ‘The Access Way’ and created an electronic archive of past events, internal memos, etc., so that new employees could have points of reference by which they could connect with the history of the company.
Expect the Unexpected:
As is often the case, even in the most well-planned operations, the unexpected happens. Irrespective of how many times I watch Zero Dark Thirty, the film about the hunt for Osama bin Laden at the moment when one of the US Military helicopters unexpectedly crash lands my heart skips a beat. My experience of mergers and acquisitions has taught me that however robust your due diligence is, what you discover when you go into the acquired institution is always different from what you expect to find. The gap between expectation and reality will depend on how well you did your due diligence, and how cooperative the target company’s management team has been.
All the Best in your quest to get Better. Don’t Settle: Live with Passion.