Giving Back, Putting People First

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How Obi Ezeude of Nigeria, and John&Ingrid of South Africa, are doing it the Yunus Mohammed way, Siaka MOMOH reports.

Microfinance banking icon and Nobel Laureate, Yunus Mohammad in one of his trips to Nigeria some time ago, while speaking to a gathering of business chieftains gathered at the Muson Centre Shell Hall, called on them to embrace social business.

“You can do it. It is not right to think profit only. You can do non-for-profit business and be concerned only with recouping your capital; this is the way to give back to society, to lift the poor out of poverty,” he told the robust collection of bankers and business people.

He argued many of the problems in the world today including poverty, persist because of a too narrow interpretation of capitalism. Capitalism, he argued, centres on the free market. “It is claimed that the freer the market, the better is the result of capitalism in solving the questions of what, how and for whom. It is also claimed that the individual search for personal gains brings collective optimal result.”

Yunus noted that the theory of capitalism assumes that entrepreneurs are one dimensional human beings who are dedicated to one mission in their business lives – maximize profit. He argued this interpretation of capitalism insulates the entrepreneurs from all political, emotional, social, spiritual, environmental dimensions of their lives. “Many of these world’s problems exist because of this restriction on the players of free market,” he said.

Yunus, an advocate of doing things the opposite way, argued at the First Bank-organised conference: “I have said that capitalism is a half-told story. By defining ‘entrepreneur in a broader way we can change the character of capitalism radically and solve many of the unresolved social and economic problems within the scope of the free market. Let us suppose an entrepreneur, instead of having a single source of motivation (such as maximizing profit), now has two sources of motivation, which are mutually exclusive, but equally compelling – (a) maximization of profit and (b) doing good to people and the world.”Yunus told the Nigerian business chieftains gathered that social business will be a new kind of business introduced in the market place with the objective of making a difference to the world.

How?  Investors in the social business could get back their investment money, but will not take any dividend from the company. Profit would be ploughed back into the company to expand its outreach and improve the quality of its product or service. A social business will be a non-loss, non-dividend Company.

Wolfaardts (John and Ingrid)

The Wolfaardts (John and Ingrid) are South African farmers who are doing business in tune with Yunus preachments. They put people first in the running of their businesses. Put against the stand point of whites who in the apartheid days enjoyed the luxury of paying slavish wages to black and coloured labour hands, and still want such to continue now when there is a new dispensation, the Wolfaardts must be commended.

Julie Streicher, a white who witnessed the dehumanization of non-whites, the black man in particular, related the story in details to Siaka Momoh and Fred Mordi who were in Cape Town in 2004 for an SME Award organized by University Of Stellenbosch. Fred was winner and yours sincerely was runner-up.  According to her, “Officially, now, an appropriate and meaningful minimum wage is being pushed but the whites are not comfortable with it; they hold to the archaic view that at least they are providing means of livelihood for those they have hired and as such these ‘fortunate labour hands should be grateful. This is the view that is still being held over two decades after apartheid!”

Profits for people
But at the Wolfaardts, it is a different picture altogether. The Wolfaardts are thinking ‘profits for people.’ Ingrid, one of the white farmers, says “our natural inclination is always to put people first, because we believe that people lead to profit.” She was quick to add that “there is however no guarantee that putting people first will give rise to financial success.

“In the current depression we have in the fruit industry, the advantage we have as a people’s company is that we have 200 people pulling together to make it work and get us through, as opposed to one or two key people in management who have to think up all the plans to make it happen.”

How sincere can an entrepreneur be in respect of this talk of people first when, generally speaking, the ultimate goal of the business person in a free market economy is to make money, make good money? Can the Wolfaardts’ remuneration system qualify as putting people first?

Julie reports them as a duo that always put themselves in the shoes of their employees. She reports them as saying, “We ask ourselves if we are willing to live with that salary, in that house, doing that sort of job?”

And a gauge of the fairness of the Wolfaardts’ remuneration package is reflected in Ingrid’s reaction to meeting her staff in Ceres on a shopping Saturday: “It’s wonderful to see people radiating good health and confidence as they go about their business in town. I am proud to be associated with them. It’s an easy relaxed relationship – greeting Lea with a hug in front of the bank, saying: “How gaan dit (How are you). Gaandit goed met you? (Are you well?)” – That’s Afrikaans for you; there are 11 spoken languages in South Africa and by extension, 11 ethnic groups. I hope I am right? It has to do with normalizing relationships.”

 Beloxxi Industries

The Wolfaardts’ trait can be found in Beloxxi Industries Limited a biscuit and manufacturing factory located in Agbara Estate, Ogun State, owned by Obi Ezeude. Ezeude, whom this writer met a day before his ultra-modern factory was commissioned by President Goodluck Jonathan on August 26, 2010, was one of the largest importers of cream cracker in Nigeria, importing about 600 containers every year from Malaysia by the year 2000. Armed with this robust import business portfolio, he entered into discussion with his Malaysian suppliers to join him to set up shop in Nigeria but they backed out. When he found out they would not bulge, his business instinct made him decide to work on his plan B, which was to do it and go it alone. He applied to US Exim Bank and got $2.2 million facility, and got an Italian firm to supply him machineries.

Ezeude explained when the Malaysians found out he had dumped them, “They were shocked to their bones. They now rushed in with Indomie that we should go into joint venture. I told them I was not interested anymore. They brought in Daily Food; I told them I was not interested. So that was how we started.”

The business kicked off in Ikeja in June 2006, in a warehouse he rented. “We installed our machine and by late 2006, we rolled out. January 2007, we hit the market.  In one month, the demand overshot our capacity. People were waiting two/three months to get our products. With that little signal, I knew that God had answered our prayers. By December 2007 after watching the market trend, we started this Agbara project,” he said.

Soft spot for staff

Beloxxi has over 500 on its staff now. The company recruits people from the immediate area. And its criteria are very clear. They must have passed through SSCE, be living with their parents, and they must have an irrevocable commitment to go back to school. Says Ezeude: “Factory work, as far as we are concerned, is not a profession; it is a stepping stone for kids whose parents are not very rich who want to save some money to go back to school. And if   any of them is in school and is doing well, we augment his fees and if on holidays, he comes back to work.”

Business simulation laboratory

Obi Ezeude’s Beloxxi Business Simulation Laboratory, located in the Annex Building, Faculty of Business Administration, and University of Lagos, is a project built by Beloxxi Industries Limited, manufacturers of Beloxxi Cream Crackers. The lab was set up under a Build, Operate and Transfer (BOT) in partnership with African Institute of Business Simulation (AIBS).

The Simulation laboratory, the first of its type in Nigeria, is a 53-seater non-traditional classroom facility designed, furnished and equipped to afford students of the University of Lagos, a conducive environment to receive practical entrepreneurship training and integrate business theory with practice, using business simulations.

This is giving back to society like Yunus espoused. It is a move other business players in the Nigerian economy should emulate.

This story is a Throwback piece from Siaka Momoh’s Archive.

 

 

 

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