THE STORY OF RWANDA is the story of Africa. Precolonial Rwanda is a story of kings who ruled over expanses of land the size of Western Europe. It is a story of court intrigues, effective administration, and sophisticated culture. It is a story of war and peace, beauty and beastliness, Shakespearean human epic. Colonial Rwanda is a story of forced labor, anthropological deception, and the compulsory cultivation of newly introduced cash crops. Independence Rwanda is a story of Western power plays, local heroes, and client-based relationships. And Post-Belgian Rwanda is a story of ethnic strife, economic decay, corruption, and civil war. I am an African and I love Rwanda because modern Rwanda is a story of resilience, integrity, and hope. I dream that if the story of modern Rwanda continues to be the story of Africa, it will be a good thing for my children and for the whole world.
I work as a strategy advisor in Rwanda and other parts of Africa. When I go to work in our Kigali office, an intriguing thought keeps coming to me. What if the French and Swiss boarding schools, the PepsiCo corporate experience, the Harvard education, had all happened for that single purpose – the purpose to help Rwanda, and through Rwanda, to help Africa? The Rwandan leaders I meet and hug at local functions, the little boys and girls I see carrying water at night in remote villages as I drive back from the countryside, the breathtaking beauty of the thousands hills and softfeatured Rwandan faces, all trigger the same feelings in me; feelings of epiphany, resilience, and pride. The development challenges of Rwanda are great. So is my determination to help Rwandan leaders overcome them.
Claver Gatete is the ultimate Rwandan national leader. He sits two doors down from his Excellency’s office. He is at the center of all important economic decisions in the country. His office window opens on a magnificent tropical garden with exotic plants, fresh cut grass, and birds with colors so beautiful they look like flowers. The top business executives, industry association leaders, ambassadors, representatives of donor agencies, cabinet ministers, NGO directors, come to him for advice. They are the national-level leadership of his country, and they all visit Claver in his stunning presidential office.
An IMF delegation has just left. They saw a lot of people, made demands, but were not pro-actively helpful. Claver Gatete is a frustrated man. He leans back and throws his hands in the air. “When we were school boys in Uganda, we used to have a cruel game. We used to go to the weaker amongst us, bring them to a place with their backs against a wall, and tell them to step back three feet or get slapped. I just realized it today. This is what the IMF is doing to us!”
The frustration Claver Gatete feels is felt by thousands of national leaders around the world. Claver wants to invest in development; he can’t. His Treasurer tells him he only has recurrent budget funds at his disposal. He wants to borrow from private and foreign partners to drive development; he can’t. The IMF tells him his country’s exports are too low and he can’t exceed his debt sustainability ratio.1 He wants to boost exports by providing better support to local exporters; he can’t. The government has no money for that and the donor community is not interested in supporting local business people whom they feel have it too good already. He’s got a Ph.D. in Econometrics. He is looking for a way out. He cannot find one. His problems seem insurmountable. They aren’t.
Two mutually reinforcing goals matter to build the competitiveness of an economy and solve Claver’s problems. The first is about enhancing the competitiveness of key local industries. The second is about creating a culture of innovation and competitiveness in the country. I have the privilege to work with Claver towards achieving these goals in Rwanda.
ENHANCING THE COMPETITIVENESS OF LOCAL INDUSTRIES
Enhancing the competitiveness of local industries is about business strategy and co-operation. It involves making critical business choices, securing tangible investment commitments, and co-ordinating the actions of several industrysupporting players. The first strategic choice is deciding which local industries, by becoming competitive, have the potential to transform the economy. This choice is important because it encapsulates the notion that developing countries have limited human, financial, and institutional resources to allocate. Such countries must therefore carefully evaluate where their few resources will have the most economic impact in terms of sustainable jobs, revenues, and equity generation. Oil dominates the Nigerian economy, but in that country of a hundred and twenty million, about four thousand people work in the oil industry.
The second set of strategic choices have to do with the type of customer segments, distribution partners, product and marketing scope, local industries leaders should focus on. These types of business choices involve a myriad of industry stakeholders who need to closely work together to articulate clear national visions for local industries. Once critical strategic choices have been made, financial commitments from all local industry players and close co-ordination provide the final critical ingrethents for success.
Achieving all of this does not happen by chance. Systematic approaches are required, and the 5-step industry development process2 is such an approach. It is a collaborative approach where local industry stakeholders work together in industry workgroups to upgrade the competitiveness of their industry. Applying the 5-step process to an industry takes months. It requires the participation of people who have full-time jobs and no prior history of collaboration.
National leaders like Claver are ideally suited to oversee such processes because of the prestige of their office. My role is to secure their participation and commitment. Playing that role is an easier task in Rwanda than anywhere else in Africa because Rwandan leaders are genuinely committed to change. I wish all my clients in Africa were like them. Very few are. Here is how the process works.
THE 5-STEP INDUSTRY STRATEGY PROCESS
The purpose of step I, Analyze Current Situation, is to understand local and international dynamics that are inherent to a particular industry. Research is conducted and presented to a carefully selected industry workgroup to help workgroup members reach a common view on the state of their industry. Step ? is also about facilitating a productive dialogue among parties who may appear antagonistic. Efficient industry-level operations and the ability to create and deliver great products and services depend on a number of inter-dependent local relationships. Local suppliers, universities and businesses, government departments, donors, industry associations are often critical players in manufacturing or service provision processes. Building such relationships requires sustained interaction and co-operation among public and private sector managers whose motivations, reward system, and aspirations are seldom aligned.
The coffee, tea, tourism, ICT, Hides & Skins, Fruits & Vegetables industry workgroups the team and I have assembled in Rwanda are well-established now. Mobilizing members and ensuring participation is always an ordeal for our new consultants. It is a pleasure to see these young professionals blossom into seasoned executives as time goes by. Africa needs their energy, talent, and openness to new ideas. Claver enjoys their company and dedication. It is such a sharp contract from the cynicism and condescendence he so often encounters with the multilaterals. Being a politician, he also likes the live debates that occur at industry workgroup meetings. He gets to engage with Rwanda’s top business community and they seem to think that at last, the government is trying to understand them.
Step 2, Set Detailed Sector Objectives, is about getting local industry players to quantify industry transformation goals in ways that are as specific as can be. Target export volumes and receipts for the industry reflect the strategic objectives of local industry leaders. Such targets must therefore be expressed in a detailed manner that shows not just aggregate numbers, but numbers broken down by product and if possible, geographic segment. For example, the targets that are set for Rwanda’s coffee industry specify not just export tonnage and dollar receipts, but also exports by different grades of coffee. Local coffee industry leaders are now able to declare: “In five years, our goal is to grow from an export level of twenty-five thousand tons – twenty million dollars per year, to a level forty-five thousand tons – one hundred and seventeen million dollars in five years, with sixty percent of these exports being of high-grade quality.”
Getting Rwandan coffee industry leaders to agree on national targets was a delicate matter. Factual data about historical and other countries’ performance had to be provided and discussed so that workgroup members could have constructive debates and make well-informed choices. Both step 1 and step 2 contributed to build the premise of a shared industry vision among previously unacquainted industry participants.
Step 3, Understand Target Customers’ Needs, is the most research-intensive step. Primary customer research is compiled to inform critical strategic choices. Industry workgroup members get to learn about what customers want, how to reach them, and how to serve them profitably. As local industry players get exposed to insightful customer information and get engaged in debates about what customer segment to serve, a greater convergence of views occurs and people from the same industry who may have previously ignored each other begin to develop a productive working relationship. This shift in perspective helps create the conditions for step 4, where workgroup members are asked to Articulate Unique Positioning for their particular industry in the global marketplace.
By the time step 5 is reached and industry workgroup members begin to Develop Action £5″ Investment Plans, buyin for what will be presented as a national industry strategy has already been secured. Industry workgroup members are ready to work together. Operational and financial requirements needed to upgrade the competitiveness of an industry have been identified. All participating parties can make financial, technical, or action commitments. The impact of all commitments can be monitored against tangible volume and receipt industry targets over a set period of time.
The 5-step industry transformation process is the type of collaborative effort that forms the basis of long-lasting and productive public, private, and donor sector partnerships. Public and private organizations need mutually agreed industry objectives, plans, budgets, and commitments in order to work effectively together. High-level forums where top government officials and business leaders meet twice a year can be helpful, but such events can never replace the hundreds of interactions that occur between lower-level public and private decision-makers who work together for the competitiveness of specific industries.
Claver is a national leader who has become immersed in the 5-step industry strategy process. He is excited to have industry objectives validated by the most respected businessmen in his country. He likes knowing where the government needs to focus its resources in order to drive growth and employment. He is happy to hear that the donor community took part in the process and might even directly support his country’s key income generating industries. He has tangible numbers on where his country’s exports could grow in the next few years. The private sector feels energized to be working with government on substantive issues. His boss, the President, is being praised by influential business leaders about his adviser’s bottom-up approach to economic policy.
For the first time in a long time, Claver feels he is not alone. He feels a bond with other economic leaders in his country. He and those who are taking part in 5-step industry transformation processes understand what it will take to make the economy competitive. Claver has realized the power of business strategy, the power of innovation, the power of co-operation. He wants everyone else in the nation to realize that too; cabinet ministers, school teachers, college students, SME owners, hospital nurses, taxi drivers, restaurant managers, everyone.
These dynamics contribute to strengthen my relationship with Claver. He trusts me morey and begins to let his guard down. I get all sorts of insights from him about how the country really works. He wants to instill a culture of innovation and competitiveness in his country.
CREATING A CULTURE OF INNOVATION & COMPETITIVENESS
Creating a culture of innovation and competitiveness is about changing the minds, attitudes, and beliefs of a nation about what it takes to create wealth. It begins with figuring out underlying beliefs and attitudes towards wealth-creation through a mental model assessment survey.3 Mental models that are conducive to the growth of private enterprise and competitiveness are made manifest. And mental models that are detrimental to the growth of private enterprise and competitiveness are also made manifest. The mental models assessment findings can then provide content to national communication campaigns on competitiveness. These campaigns rely on the participation of opinion-leading change makers, on the discerning usage of media and discourse outlets, and on the relentless infusion of inspiring content. They have the power to change the mind of a nation.
There is often a great discrepancy between what local leaders profess about the virtues of capitalism and what they actually do about it. Since the fall of the Berlin Wall and the widespread acceptance of capitalism, political rhetoric on the virtues of pro-business and pro-competitiveness policy has become the norm in developing countries. In reality, government, civil society, donor, and even business leaders’ underlying beliefs on how capitalism should work can sometimes be surprising. The results of such inconsistencies can be quite bizarre, as depicted in the “ping pong” story of Bob Choo, a Malaysian investor I came across in Central Africa.
A senior minister had gone on prime time television to announce the establishment of a “one-stop shop” government department to facilitate investment. Bob Choo got the go-ahead from his headquarters to set up a twenty-million dollars wood processing plant. Five months later, Bob was still fighting to get the ten signatures he needed to set up his factory. He felt overwhelmed and worried. He decided to ask for an authence with the senior minister. Four months later, Bob got the appointment, went to see the minister, and started complaining about the poor way he had been treated by local government officials. He was hoping to arouse the minister’s sympathy and personal concern; “That one-stopshop is not working,” he said, “I am being played from pillar to post like a ping pong ball . . . ping pong ping pong ping pong for nine months.” The minister’s reaction was unlike anything Bob had been expecting: “this is our country, and we can do whatever we want. We can even play ping pong with you if we want to,” the minister said.
The way leaders of a nation think about business, and more importantly the way they act on it, matters for several reasons. First, developing nations cannot and should not be ostracized from the global economy. Since globalization is unavoidable, they must embrace it, find ways to do well in it, and develop attitudes that match those beliefs. Second, in order to succeed economically, public, private, and civil sector leaders must have a clear understanding of their respective roles and how those roles contribute to the prosperity of their country. Third, public, private, and civil sector leaders need business strategy skills as well as an underlying culture that fosters innovation, openness to new ideas, and trust. In other words, they need to develop the right mental models. The minister in Bob Choo’s ping pong story needs to develop the right mental model.
I was part of a team that conducted a mental models assessment survey in Nigeria on behalf of the World Bank. The survey was administered throughout the country to more than 1100 respondents from all walks of life; local leaders, academics, NGO workers, business, health, and religious leaders. This effort and its subsequent analysis revealed a great deal about Nigerian leaders’ underlying mental models. More than 50 questions on critical economic development issues such as “the role of government”, the “impact of corruption”, or “the competence of the private sector” were asked. On each of these issues, the nature of the answers provided great insights. The answers themselves exposed the positions Nigerian leaders held on wealth creation. And the demographic spread of the answers uncovered the level of consensus, or lack thereof, which existed in Nigeria with regard to wealth creation.
For example the survey showed that eighty-one percent of Nigerian leaders expect the “government to take the lead in ensuring the development of the country.” This was not good news from a competitiveness standpoint because it implied that Nigerian leaders are not in favor of a greater private sector role in the development of their country. The study showed that fifty-six percent of respondents feel that “economic growth comes at the price of social equity.” This was also a disturbing finding because such a belief is both inaccurate and competitiveness-limiting. A dynamic communication campaign would be needed to address these findings.
The problem of reconciling poverty relief with wealthcreation has become one of the most serious mental models issue in the developing world. Poverty relief is a legitimate concern for leaders in the developing world. Over the past few years, it has become the principal issue guiding economic policy in developing countries. This trend is understandable, but can lead to misguided policies when the concern for poverty relief takes precedence over the concern for wealth creation. Wealth creation is the only sustainable way out of poverty, and nations whose leaders do not believe this are nations in danger of remaining poor for ever. Countries that tend to over-focus on poverty relief over long periods of time become foreign-aid dependent and get trapped in the expectation that the rest of the world is responsible for their economic condition. In the end, these countries never “graduate” from humanitarian inflows and the culture of begging that goes with it.
Focusing on poverty relief and humanitarian aid is understandable in countries that are emerging from conflict or natural disaster, like Rwanda. However, after a few years of immediate humanitarian assistance, economic policy should shift its focus toward wealth creation. Unfortunately, we still see a number of countries throughout the developing world that still remain dependent on foreign aid for their most basic needs many years, even decades, after independence. In such countries, government officials, the agencies they work in, and the modes of operation they design, are all geared towards maximizing donor assistance. This whole approach becomes a self-induced dependency mindset. It is also one of today’s greatest mental impediments to sustainable development.
It need not be that way. Economic growth can happen together with greater social equity when it is based on the sale of high-value products and services. In turn, high-value products and services can only be made by highly qualified workers who are entitled to high and rising salaries. Nigerians, Rwandans, and all other Africans need to be aware of this. Donor assistance can be of great benefit to recipient countries that can use development aid inflows well while building the future self-earning capacity of the nation. Countries like Ireland, Mozambique or Vietnam, for example, have been quite successful at achieving this balance. People who live in aid-dependent nations also need to be aware of this. The determining element that enables countries to make such mental shifts is the realization that sustainable economic transformation is based on commercial success. It is a mindset-related issue that ought to be treated as such in the framework of systematic communication efforts. Claver and I discuss these mindset change issues at length every time we have the opportunity. We agree on both the means to effect mindset change and the praiseworthiness of the end.
The Rwandan “culture of innovation and competitiveness” has been active for a few years now. It has two main components: Indirect Communication via Opinion Leaders; and Direct Communication to an Internal Target Audience.
Indirect Communication via Opinion Leaders: these activities entail a number of outreach activities to ensure that key opinion leaders and influencers are exposed to the principles of competitiveness. It is based on the main messages captured from the mental models assessment survey, which are then integrated with competitiveness principles in order to engage local opinion leaders. Messaging opportunities to engage opinion leaders and influencers such as speeches, university courses, presentations, public lectures, panel discussions on local radio & television provide the platforms through which the national debate on competitiveness happens.
The President himself mentions the importance of competitiveness relentlessly at every speaking occasion . Targeted opinion leaders and influencers include but are not limited to senior press executives, government officials, professors and teachers, NGO leaders, and prominent business people. International thought leaders in competitiveness-related fields, such as Michael Fairbanks and Michael Porter have also taken part in punctual indirect communication efforts on competitiveness in Rwanda.
Direct Communication: ideally, a local PR or Advertising firm should be hired as part of a culture of competitiveness campaign. That firm should be directed to handle all direct communication activities and to disseminate all indirect communication events to broader internal authences. The content of what the PR/Advertising firm disseminates should be informed by mental models assessment survey results. Branded Radio programs, testimonial interviews, editorials, market linkage forums, award & prize competitions are all activities to consider.
In Rwanda, we did not hire a Public Relations or Advertising firm, because members of the team and I decided to assume that work ourselves. In between industry workgroup meetings and business research, each one of us got to give speeches at local high schools, write newspaper articles, or participate in “village councils” about competitiveness with rural dwellers who thought we came from Mars. I even got a badge of honor for collapsing from exhaustion on national television during a live broadcast on competitiveness.
Claver has become the poster face of the “culture of competitiveness” campaign. The public response has been amazing. The business community is showing a renewed interest towards issues of quality customer service, and logistics. Civil servants have become interested in ways to generate income for local communities. College students have been changing course in their studies in order to seek opportunities in potentially booming local industries. Army generals have become conscious of what role they could play to support the tourism sector. There is a new sense of confidence that is almost palpable.
Two years went by since national strategies for the coffee and tourism industries were passed by cabinet. In the meantime, the “culture of competitiveness” communication campaign has created tremendous momentum.
Plans are in full gear to migrate coffee exports from ordinary grade coffees to high-grade Arabica coffees. The investment required in new coffee trees, washing stations, cupping laboratories, grower training, marketing initiatives, and specialized infrastructure comes to eighty million dollars over eight years. In return, nearly five hundred and forty million dollars in exports are expected over the same period, with a growth in annual coffee exports from twenty-two million dollars to one hundred and seventeen million dollars.
In tourism the chosen strategic course is to migrate towards high-end eco and cultural tourism offerings. The investment in national park facilities, new lodges and hotels, guide training, transportation infrastructure, cultural site upgrades, amounts to one hundred million dollars over eight years. In return, nearly four hundred million dollars in tourism receipts can be expected over the same period, with a growth in annual tourism receipts from fourteen million dollars to one hundred million dollars.
Claver briefs the President every month on all execution issues related to the national coffee and tourism strategies. The results are phenomenal and make them both look like heroes. In both industries, the country is ahead of plan with regard to yearly volume and income targets. Both domestic and foreign investments in those two industries have soured. International press references to the country’s tourism and coffee success stories have become too numerous to mention.
Claver is sitting at his desk, reflecting on the economic transformation underway in his country. His gaze stops at the pile of letters he has received from coffee growers in the past few months. Many of those letters have endearing spelling mistakes and flowery language thanking him for his efforts. The authors talk about how they are now able to send their kids to school, buy medicines for their families, and do home repairs that were long overdue.
Another IMF delegation is scheduled to arrive soon. The lawn outside Claver’s office window has been freshly cut. The smell of cow dung used to fertilize the soil makes one’s nostrils palpitate like butterfly wings. The bright sunshine pouring into the room brings with it a mysterious, almost mystical energy. Claver thinks of the IMF delegation. He thinks of how they are going to make him stand back against the wall. He thinks of how they are going to ask him to step back or get slapped.
For the first time, he thinks of how he now knows how to walk through that wall.