CIO East Africa: So, Ken. Why did you feel the need to share your exit on your terms, in your own words, instead of the typical press release?
Ken Njoroge: There are people who are generally interested in the company. Investors, shareholders, and staff members all over the place. I think it is important to carry people with you because I had been on the job for a really long time. It was also a very critical transformation. We are very systemic in powering our customers for a really long time. I don’t think a press statement is sufficient to give full context to a transition.
That makes sense. Did the two of you know (of) each other well before Akshay joined Cellulant?
Ken: We first met in early 2020 just before corona, about a year ago before he finally joined Cellulant.
Akshay, what did you know about Cellulant before joining?
Akshay Grover: I was part of another African start-up so I knew about Cellulant. And that they were smack in the middle of fintech. But you never really know about what is happening on the inside. I started learning more about it after we met.
Ken, did you know Akshay before he joined Cellulant?
Ken: Not at all. I knew of the business Akshay was involved in quite well. I had read about the founder. Then Akshay and I got together, chatted over a phone call, and during one of his trips, we spent a good amount of time face-to-face. I always see any meeting as a hiring meeting, so you probe someone, sense them out, their attitude towards this space and that’s how it started.
What has the transition been like?
Ken: You could say my transition has gone through several stages. The team always knew that I wasn’t going to be there forever. The business was set to outlast us stepping out of it. All from the way the business was run, to empowering people across the organisation and countries. We worked on the transition for 18 months and it was very clear we had a good crop of leaders. We needed to blend it with a lot of outside blood. We started recruiting and Akshay joined beginning of this year. It built what we call the team of 8. I made the decision to transition sometime in September, then I spent a few weeks talking to the board figuring out what it would look like, and working on a plan. When I wrote my article, we started to put the plan in motion. It became clear that we could have Akshay as the Ag. CEO and give the team support and breathing room to execute the company.
You do know it is rare to transition yourself out as CEO. It is rather like the presidency. You wait to be ousted. You don’t really leave willingly.
Ken: That is actually surprising. I think the reactions to the articles, that was one of the things that stick out. And I can understand why people stay. It is incredibly difficult to do. I speak calmly about it but it’s actually a roller coaster of emotions. It’s hard. Very hard.
Akshay: I think one needs to pay more attention. The media likes hype and everybody likes to read about a CEO being ousted. That’s sensational. But then a CEO handing over peacefully …
And what was the transition like for you Akshay?
My journey with Cellulant actually started in the last quarter of 2020 when we finalised my joining them as a CFO. What made it really easy was the culture instituted by Ken and his team; very open, transparent, easy to work with, and blend in. I probably expected it to be tougher to integrate but it just felt very natural. What’s been important is the vote of confidence from the team who kind of said they were okay with a transition from CFO to Ag. CEO as we moved into our next growth plan.
You said they passed a vote of confidence. This was a democratic process?
Akshay: I don’t know if there was any formal voting if that is what you mean. But I would like to believe there was actually some form of consensus around it.
Ken: For most critical decisions, the way that management culture has evolved, we are fairly collaborative in a sense. Even in areas where, as a leader and founder you’re very strong-minded and strong-headed about some things; we carry everybody along. It was not democratic voting, but everybody felt good about it. We looked everyone in the eye and discussed what we were feeling. We had made that decision together with the board, of course, but it was still the Cellulant culture to make sure everyone is comfortable. It helps make the transition and other critical decisions a little easier.
How would you describe your leadership style?
Akshay: I expect there will be some differences that impact the way we move forward and that there would be some form of overlap. Leadership style is such an individualistic thing, but beyond a point, it wouldn’t matter. What I would describe it as participative. I think there is significant value in the opinion of people especially when there is a tight leadership of eight people. There isn’t going to be a ‘my way or the highway’ perspective. I’d like to use the word, ‘transformative,’ outlining the big picture and empowering people to do what they have to do in order to deliver the outcome we all subscribe to.
Ken, what is, or was, your leadership style like?
Ken: This is a question that is always easier to ask the people you lead… Of course, my leadership style has changed over time because the company needed different styles at different points. I would say that I am incredibly strategically inclined. I lead both teams and customers that way. On a day-to-day basis I am strong-minded, I do listen, I foster collaboration, and so on, but I sometimes take positions quickly and can be difficult to move once I take those positions. I am very, very pushy. That’s for sure,
What do you think Cellulant’s legacy will be?
Akshay: I think Ken has a lot more to say about that. But on my end, I would say a culture of innovation, changing and adapting to the market, which is something that is quite deep in our business, our people, our culture, and our people. There has been a lot of change in the business model through 20 years. I expect a lot of innovation, adaptability, and agility. What comes to my mind is maintaining and growing the culture that we have which I really feel is very valuable to the business.
To what extent should African central banks adjust regulations to push forward emerging fintech and grow the economy?
Akshay: That’s a very trick question. The challenge there for us is that we are in 33 countries. The answer cannot be generic. But, I would say regulators in Africa when I compare to Asia-Pacific, China, and India, and I am not comparing it too much with the developed worlds because the dynamics are very different – implicitly or explicitly, regulators have actually been quite good. Did we have the proliferation of anything like M-Pesa in India and China 10 years ago? The answer is no. Why? Because I think to a great extent, regulation and innovation have been permitted – implicitly or explicitly. It is a very interesting inflection point because what is happening right now is you have more growth across the full financial spectrum. The issue is going to be how quickly regulators adapt to this change by defining the boundaries across that landscape. It’s growing from 1x to 10x.
Ken: On the subtler side, almost all regulators in the emerging markets and developing world, you could say their heart is in the right place. There is a push for financial inclusion, and though their approaches are different in different regions of the continent, the aim is financial inclusion. That is generally supportive. Of course, wider government policies also supporting digitisation. What we see is regulators are learning from each other. Regulators from the region are borrowing from Kenya who has been a lot more liberal and innovative. In many years to come, regulatory push intervention will be a facilitator for digital financial services which is generally good for the economy, business, and financial innovation.
In that case, what is your perspective when it comes to the future of fintech in Africa?
Ken: Fintech is going to be big. The proxy for how far it will go is the level of inclusion and digitisation in the economy. The Kenyan market is a good benchmark. The money flowing from M-Pesa is basically half of the GDP. If you look at that and project it over Africa in the next couple of years, you can extrapolate that the payments market is going to be a $40 billion – $50 billion business in revenue. M-Pesa is also close to $1 billion in revenue in Kenya alone. If you look at the no of fintech companies, their revenue is less than $3 billion. We have maybe 4 per cent of the market. There is a lot of headroom for Cellulant to grow. If I was a young guy, I would like Akshay’s job because you have a company that is well-positioned.
Akshay: If the ease of cross-border transactions and a framework surrounding it could be put together, that would be very interesting. One of the mistakes people make is that they compare Kenya to China and India. That is a huge mistake. You can’t compare a 54-country-continent with a single rule of law in both India and China, because quite frankly it is easy to grow in that space because of a single regulatory environment where everyone follows the same courts and jurisdictions making it easier to grow from a billion to $25 billion. Imagine the complexity in Africa. Prima facie the mobile penetration and GDP might look similar, but the problems needing solving in Africa are different.
Even cheaper smartphone and data prices will help. Know people here think we are at rock bottom, but we are not. I pay my mobile bill in Kenya and it pinches me because I am paying 3 to 4 times what it cost me in India for the same or even less quantum of data. I think I’m getting ripped off. So, I don’t understand why it can’t happen.
Focused effort by large institutions is needed to make transformational changes. For instance, I wanted to get a housing loan and was told it would take six months. It is up to banks and leadership of these institutions to change the name of the game and commit to changes, not just in the fintech industry, but in the ecosystem.
Do you see a cashless Africa? Because this is one of the major ways to ensure financial inclusion.
Akshay: I really do believe that it is very much possible. I think Kenya is showing the way. There are one or two markets in the North. In the next 5 to 10 years, I think this is going to be a reality.
Who mentors the mentor when it comes to mentorship?
Akshay: My mentorship is not someone from the business world. It is more my spiritual guru in India. He has since passed. He had a few governing principles which I follow. They have very little to do with things we apply in the business world. I believe in karma, I believe that you have got to do the right thing. You should not always be attached and focused on the outcome. The more you think about the outcome, the more you’re distracted by what you need to do. Focus on what you need to do and let the outcome take care of itself. Also, be tolerant of other people’s shortcomings. Focus on people’s strengths. On what they bring as valuable. And, finally, I struggle to achieve this one – be a little less materialistic. Focus on what you are doing, and not, again, on the results.
Ken, who leads the leader?
Ken: I’ve never really looked at mentorship as one person. I’ve drawn, and continue to draw, a lot of learning and listening to almost everyone around me. There is never a single conversation where you don’t learn something new and practical, whether big or small. And always, people like us, who are stubborn, driven, and so on, find that once in a while, most of my progress is always in those moments I manage to listen.
What qualities would you say are lacking in modern leadership?
Ken: I don’t know if you can answer that question right…! Because there are all kinds of flavours of leaders everywhere. But I think – I don’t know what Akshay thinks – that there is one statement that guides me a lot and every time I see messes caused by leaders, including myself, is that harmony is when what you think, what you say, and what you do are consistent. Everywhere I see there is a problem with the leaders of a moment or situation, I see one of those things is missing. Everywhere you see a mess, that is missing.
Akshay: I really do subscribe to what Ken has said. I think what you say, what you do and, what you think and, being consistent with that is very important. I see another thing increasingly becoming a trend and that is this ‘get rich quick’ philosophy. You know, that, let me get this round of funding, thinking about funding round to funding round, building my business with funding from 10 million to 15 million to 20 million. And you are in this chase, which is about value, yes, but what about building a successful business? What about becoming sustainable and building valuation. All of the good things in the world will happen. You will get listed etc etc. I feel like there is just this mad rush created by the example of Silicon Valley, created by one funding round to the other, and not focusing on the fundamentals of the business.
This is all very true. What are some of the learnings and lessons you have come across as an exiting CEO?
Ken: Take care of the people and the people will take care of the business. That does not necessarily mean kumbaya. It means obsessing over their needs and growth. It is tough sometimes because you push people into uncomfortable zones, push them into opportunities that are bigger than their shoes, and provide support. If you do all those things, they come through for you. For a leader to trust that numbers will follow if you relentlessly do that.
As a leader, don’t hesitate to share the load. You don’t need to have all the answers. There are times you will have them and times when you don’t. Have no shame in going to the team and customers.
Be incredibly transparent. This has been one of our guiding principles. We have to put the cards on the table. It doesn’t really matter if we agree on them or if how we talk to each other. A team will often always recover from disagreements and things we say in the heat of the moment. When things are always open, trust is not lost. And when there is trust, people do things together. I hold these dear as principles I carry forward. When I reflect on my 18 years at Cellulant, these are the moments I take home.
Akshay, what do you expect this opportunity to bring out of you?
Akshay: I think Ken has left very big shoes to fill. The reality of it is that no one can be the founder of the business. What you feel as a founder for a business is very hard to replicate as a professional whether you are CEO or CFO. But, notwithstanding all of that, I think there’s a very common view around the table over the last couple of months. What is the outlook for the business? This is not a typical scenario where there’s one new CEO coming in with a new strategy or roadmap to be designed. We agree on all of it. That is the great thing, and that is the opportunity. It is really about us executing over the next few months. And really up to you Carol to be writing how Cellulant has become one of the most valued fintech next year.
What are your expectations as to what Akshay brings to the table?
Akshay has said all of it! I will be on the board supporting him and available as a friend and colleague in between board meetings when he needs support. And some tough love with the board to get us there.
What’s next Ken? Will you found yet another company?
Ken: Found another business? No… Am I going to run another business? No. I am done with that part of the journey. But I still have a lot of energy within me. What I will intensify is stuff I have always done such as providing hands-on mentoring and coaching for CEOs of scale-up businesses in tech. I have been doing it for free over the last few years. I want to scale it up and see if it can become a business for 70 per cent of my time and 30 per cent to CEOs of large companies who want to digitize. I’ll probably be very choosy and do that for one bank and one telco across Africa.
Akshay, any last words?
Akshay: Ken and I have had many opportunities for last words over the last couple of weeks. I will just say I think, Ken, we all want to live up to the legacy that you have created at Cellulant and that we are able to deliver on the worldview that we took on as a team. And as you said, we will see you in the board meetings, so I am really not sure if it is goodbye in any case.
This article was first published in the May 2021 issue of CIO East Africa magazine.