Some tough decisions Ugandan CEOs make

By Joan Akello

Charles Ocici, Richard Byarugaba, Maggie Kigozi, Kenneth Kitariko reveal tricks of surviving at the top

Survival rates at the top are declining for C.E.O’s in Uganda and the men and women in the top office are buffeted by a sea of pressures. As a result most large corporations, which incidentally are also mostly either government owned or controlled, are operating without top managers. The National Housing and Construction Company, National water and sewerage Corporation (NWSC), and Capital Markets Authority, come to mind.

Others that have had high management resource turn-over include National Medical Stores, National Drug Authority, National Planning Authority, and the Uganda National Bureau of Standards.  Allen Kagina has been Commissioner General of the Uganda Revenue Authority for almost a decade. Although she has performed relatively well, there comes a time for even the best to move on.

But as the current acrimony over the search for a successor for William Muhairwe at NWSC shows, the CEO’s problem start even before he/she enters office. Almost two years since Muhairwe was acrimonious kicked-out, no replacement has been appointed and different power brokers have bamboozled the appointing authority, President Yoweri Museveni.

In the latest twist, erstwhile NWSC board chairman, William Oketcho, was suspended for allegedly delaying the recruitment of the managing director. Oketcho immediately accused the line minister, Ephraim Kamuntu, of sacrificing him to cover for his failures. Similar squabbling happened at the Uganda Investment Authority, Microfinance Support Centre, and the Electricity Regulatory Authority.

Whatever their title; CEO, managing director, general manager, or commission, the topmost managers of a corporation are the pillars of management; they directly make or break the company. The government of Uganda is a major shareholder in over 200 entities, most of which face management issues, some of which have had high management turnover.

Richard Byarugaba’s position at NSSF is closely being watched since the minister of Finance, Planning and Economic Development, Maria Kiwanuka, announced that his three-year tenure was up and the position of CEO was to be advertised.

Byarugaba told The Independent that Kiwanuka’s move was normal and has nothing to do with his performance. However, there is a parallel investigation going on about some of Byarugaba’s investment decisions and, in situations such as these in the past, acrimony has set in.

It is difficult at the top

“In private sector, if you do not perform, you will be fired, that is the bottom line,” says Kenneth Kitariko, CEO African Alliance Uganda, “but a CEO in public sector has a more difficult job with more objectives other than making money.”

He says such CEOs face pressures to sometimes act against their better judgment to satisfy a variety of shareholder interests.

Margaret Kigozi, who was ED at the Uganda Investment Authority for a decade, knows about the pressure.

“There is pressure from parliament, the President, the ministry ordering for something yet the board has not been consulted.

“So who do you report to? The board is supposed to have the ultimate power, but there is a ministry, the minster, your bosses in the executive,” she says.

She says the main challenges during her tenure included lack of clarity in leadership and in her case, her gender. Being a female CEO was not well accepted when she was first appointed in 1999.

There are CEOs like Byarugaba who attempt to steer clear of the politics and dwell on business related challenges of bureaucracy, especially in procurement.

“It takes a long time to do things, you have to buy in your team, buy in staff, the ministry, minister and the board,” he says, “so even if you do something that is right, somebody is bound to complain.”

He says he changed a bit of that at NSSF: “NSSF behaved like a government department that is long known for bureaucracy, many checks and balances, redundant staff. All this has changed since I came.”

He says before, it would take 105 days for the institution to process payment of benefits for eligible savers, now it takes ten days.  NSSF used to pay interest of 3% but it has risen to over 10% on retirement benefits. It now collects over Shs50 billion per month up from Shs28 billion per month three years ago.

Hesays although he has tried to ensure that any change benefits everybody, there are people who try to fight and fail him as CEO.

Charles Ocici, Executive Director Entreprise Uganda attributes this to political influence, the scourge of corruption and conflict of interest.

“Politics is a silent force that does not spare the CEO of any public interest entity. One has to balance professionalism and attend to the political line,” Ocici says.

There is much public scrutiny and therefore they have their work cut out.

Kenneth Kitariko  says sometimes the public scrutiny scares some CEOs into inaction while others either ignore the negative publicity as they go about fixing the mess such companies usually find themselves in.

They are usually under- staffed and under-funded,  and are riddled with corruption where individuals and companies that do business with government do not want transparency in bidding and want to get  jobs based on “who they know” rather than “what they know’.

“There is the fight for jobs which encourages intrigue, malice and accusations which can be extreme and can give any CEO headache,” Ocici said.

Tips for survival

Ocici adds that CEOs of public entities should develop policies and operational manuals that clearly spell out the standard operating procedures.

You can quote company policy to justify your actions, he says although some of the manuals he is familiar with; like that of Kyambogo University, are inadequate for the job.

“Guide the minister or the political leadership prior to appointing the board of directors, you will either fight or have to live with an impossible board if you fail to guide in setting up a governance structure for the entity,” Ocici says.

Ocici says that this will help you in internal controls such as hiring and firing employees.  The other trick is to ensure that you keep your staff busy to avoid any becoming an agent for gossip that could tear the company apart.

Ensuring complete clarity on roles and duties for every employee with clear deliverables and targets is important.   Most public entities have idle employees who are not promotable and cannot do any job but are paid salaries.

Ocici says the day you are made CEO, ask all heads of department to write status reports candidly (without fear or favour) and use it as an inception report.

You must establish the situation the previous CEO left the company; he or she might have been very good in public relations but poor at implementation.

Set up a confidentiality box where every employee identifies what is right or wrong in the company (but do not ask for names), three things to be done.  Every employee must know your motive; you are new and want to find out how to start running the company

Hire an independent consultancy firm to handle the feedback and write a document on the findings. Some of these findings will be categorized into management, indiscipline such as staff who sabotage CEOS, fraud, mismanagement of funds, debts.

The final report from the firm is what the CEO should present to the board as an Inception report so that a decision is based on the current happenings of the company and the board is in position to understand the situation the new CEO will have to deal with.

Kigozi says that CEOs should try to follow rules and regulations despite the pressure and conflicting demands from various government departments.

Failure to do that “will get you into trouble very quickly,” she says.

She says it is best to devise a code of conduct that stipulates work ethics, ways to share information and emphasise on transparency.

One management consultant who interacts with many CEOs says Byaruhanga could be having problems because he did not get information from staff who knew about the previous bad deals such as the Temangalo land scandal that involved Prime Minister AmamaMbabazi.

“Details are emerging three years since Byaruhanga took over NSSF.  The board and everybody including the finance minster are asking him for an explanation. He would not have been in this situation if he had presented the board an inception report,” the management consultant told The Independent on condition of anonymity.

Byarugaba says, however, that “everybody knew the mess within NSSF such as the delay in paying clients, procurement flaws.” He says, therefore, it was easier for him to make deliberate changes such as a new strategy, improve on corporate image, and reduce operational costs.

He says it is the CEO‘s job to improve on efficiency through boosting the relationship management model, and not merely using the law to coerce employees and clients to comply.

“We had 100 cars to run 24 offices but they are less than 30 now, which would consume Shs 450 million   a month but now it costs about Shs 50 million.

Byarugaba says every CEO should balance efficiency to customers and costs.  Since the customer is king, one has to improve on branding; customers service delivery channels, but also motivate staff.  He says he had to cut on number from 700 to less than 400 respectively.

He adds that the cost-income ratio, which is one of the main measures of performance as it shows the rate at which operating costs are changing against operating income, has dropped from about 35 percent in 2010 to about 17 percent currently.

With all the intrigue in institutions like NSSF and the external pressures, it is always unclear if CEOs of public entities like Byarugaba can keep their job. Survival at the top other than performance often becomes the priority. Byarugaba has apparently chosen to stick to performance. Will the good performance indicators save him? Possibly, but anything is possible when you swim among sharks.