A Conversation with Hakeem Belo-Osagie

Accomplished Nigerian businessman reflects on what it takes to be an effective leader in Africa and beyond.

March 29, 2022

What are the unique challenges facing the African entrepreneurial ecosystem? How is the rapid growth of fintech startups impacting the Nigerian economy? And what does it take to become a modern business leader? Hakeem Belo-Osagie, accomplished businessman, philanthropist, and educator, has the experience and expertise to tackle all three.

Few business leaders understand the systemic challenges facing African finance as well as Hakeem Belo-Osagie. For three decades, he’s been a driving force in the Nigerian economy, working across the energy, finance, and telecom sectors. He left a decade-long career in the Nigerian government for the life of an entrepreneur — and he hasn’t looked back. But it didn’t start well, as Belo-Osagie explains:

“I think I mightily overestimated my abilities, and my first entrepreneurial venture in finance was a complete failure, the bulk of which was entirely my own fault. It was a wonderful lesson. And I was able to pick myself up. The second venture of mine, which was a securities trading company, went very well. Subsequent to that, I staged the takeover of a large government-owned bank that I realized after buying was effectively bankrupt.”

Managing a hostile workforce at that bank, UBA, and working with seemingly hostile government regulators, has taught Belo-Osagie about the importance of empathy, patience, and courage. Being aware of how much your employees and regulators really understand about the situation is key to success. When government officials don’t understand something, their instinctive reaction is to say no, the product of a bureaucratic mindset, he says.

Ultimately, Belo-Osagie defines success, especially in Africa, this way: “We have to measure how well we’re doing, not by how many people are on the Forbes cover, or by how many billionaires Africa has, but basically what has happened to the bottom 40 percent. Business success has to enable people to make good sums of money, but it also has to be a system that lifts people out of poverty, large proportions of the overall population.”

Listen to Belo-Osagie’s turnaround story at UBA, his thoughts on the role of regulation in the future of fintech, and what it takes to be an effective leader — in Africa and beyond.

Grit & Growth is a podcast produced by Stanford Seed, an institute at Stanford Graduate School of Business which partners with entrepreneurs in emerging markets to build thriving enterprises that transform lives.

Hear these entrepreneurs’ stories of trial and triumph, and gain insights and guidance from Stanford University faculty and global business experts on how to transform today’s challenges into tomorrow’s opportunities.

Full Transcript

Hakeem Belo-Osagie: There’s a Japanese saying that sometimes you have to jump through a window not knowing what’s outside, and the knowledge of exactly what the problems are is itself a constraint.

Darius Teter: Every entrepreneur has to wrestle with the unknown. The most successful ones develop a skillset to help them deal with the things that they can’t predict.

Hakeem Belo-Osagie: Therefore, I think that if I had known too much about banking, I may not have done it. But in that sense, I wasn’t a professional banker. I was just an MBA who just had that certain overconfidence that MBAs have, that any problem can be analyzed, can be assessed as a problem of management, a strategy can emanate from it, and you should be able to execute.

Darius Teter: I’m Darius Teter and welcome to season two of Grit & Growth from Stanford Seed, the show where Africa and India’s intrepid entrepreneurs share their trials and triumphs with insights from Stanford faculty and global experts on how to tackle challenges and grow your business.

You’d be hard pressed to find a more accomplished person than our guest today, esteemed businessman Hakeem Belo-Osagie. This show isn’t long enough to list Hakeem’s many, many accomplishments. But he has been a driving force in the Nigerian economy for the last three decades across such disparate sectors as energy, finance, and telecoms.

He’s a business leader, a philanthropist, and an educator. He’s on the Council on Foreign Relations, the International Advisory Council at the Brookings Institute, and he’s a lecturer at Harvard Business School, although we won’t hold that one against him. He’s also the new chair of Stanford Seed’s board of directors. Hakeem has a unique understanding of the African entrepreneurial ecosystem and the challenges that it faces. I sat down with Hakeem to hear about his perspectives on the Nigerian economy and the rapid growth of fintech start-ups, his experience taking over a state-run bank in the late ‘90s, and his vision for the modern business leader. Here’s Hakeem, humble and understated as always.

Hakeem Belo-Osagie: My name is Hakeem Belo-Osagie. I am from Nigeria. I went to university in England and in the United States.

Darius Teter: That would be Oxford, Cambridge, and Harvard, in case you were wondering.

Hakeem Belo-Osagie: I then went back to Nigeria and worked in the government of Nigeria for many years in the president’s office, and then decided after maybe a decade that I wanted to become an entrepreneur. I think I mildly overestimated my abilities. And my first entrepreneurial venture in finance was a complete failure, the bulk of which was entirely my own fault. But it was a wonderful lesson and I was able to pick myself up. And the second venture of mine, which was a securities trading company, went very well. Subsequent to that, I staged the takeover of a large government-owned bank that I realized, after buying the bank, that it was effectively bankrupt.

Darius Teter: This is —

Hakeem Belo-Osagie: This is United Bank of Africa.

Darius Teter: United Bank of Africa or United bank for Africa?

Hakeem Belo-Osagie: I always get it wrong myself. So let’s just leave it at UBA.

Darius Teter: Okay. United Bank Africa. We’ll return to Hakeem’s experience at United Bank for Africa in just a moment. But first, I wanted to hear Hakeem’s perspective on Nigeria as a whole. What are its opportunities for long-term growth and what stands in the way?

Hakeem Belo-Osagie: I am cautiously optimistic about the growth prospects of Nigeria. I think that the fundamentals are as follows: a large population, and a population that I would say is entrepreneurial. I hesitate to use the word as a matter of culture, but, I simply say, has historically been entrepreneurial and that has had a very deep sense that money is to be made, is not embarrassed or ashamed of that, has a sense of initiative, and does not feel dependent on government. And therefore, that set of human resources is a huge advantage for any country as it intends to develop. It does have an oil base, which, even during a time of energy transition, I think, is important. And therefore, if properly used, gives you the capacity to build and to fund an infrastructure, which is very important for the growth of any country or economy.

Darius Teter: Can I jump in right there? So we’ve all heard the term “Dutch disease,” where the dominant commodity sector pulls resources, which more efficiently might be allocated to some other activity than oil and gas. As petroleum becomes a less important part of the overall GDP of Nigeria, will we see a kind of reverse of the resource curse and see more and more investment flowing into other productive sectors, or has that already happened?

Hakeem Belo-Osagie: I don’t think it’s already happened. I think that the initial movement away from oil will be recessionary for Nigeria, because I think that Nigerians have gotten very used to the sense that there’s a flaw that a certain level of oil earnings gives an economy. And I think we will struggle to adapt to that. But I do think that as that situation persists, a certain determination, a certain resolution, will kick in as we now, in a sense, have our back against the wall and now know that we have got to intensify our efforts to develop the economy.

Darius Teter: You mentioned this large population, an entrepreneurial mindset in spirit. I’ve also heard you say in another interview that you’re kind of tired of the demographic dividend that people keep talking about, that having this very wide, flat demographic pyramid is, yes, it could be an asset, but it could also be a liability. Could you say a bit more about that?

Hakeem Belo-Osagie: Yes. The thing is that all of the arguments for why a country can be successful are the same arguments as to why a country can be unsuccessful. So, for example, a large market can simply be 100 million people who have very little income, very little spending power. It can simply mean that you have a problem of overpopulation, you can’t educate all the people concerned, on the one hand. On the other hand, it can also mean that you have a wonderful market within which to test the products, to perfect the products, and then to form the basis of going into exports. So you can go either way.

Now, what I think is going to determine which way Nigeria goes is really going to be the quality of leadership. And it’s going to be the quality of leadership, not only at the business level, but, almost, I would say, in some respects more important, at the political level. Because I think that the political level determines the framework which allows business leadership either to excel, or it constrains business leadership. And just to make an international comparison, if you just look at two countries in the early ‘60s, and I’ll use the Middle East as an example, you look at the United Arab Emirates and then you look at Libya, both had one to one-and-a-half million barrels a day of oil. Both had populations that were not largely educated in the early ‘60s.

In many respects, Libya was ahead because it was in the Mediterranean and you’d have thought that its proximity to Europe assisted it greatly. But now when you look at it 50 years later, why has Abu Dhabi, why has Dubai, taken off from desert towns that nobody thought were going to be catapulted to where they are right now? And where is Libya right now? That really came down to the quality of leadership.

Darius Teter: So let’s talk about that. So good governance is a precondition for broad-based, robust, persistent economic growth. Let’s put it that way. So what is the impetus? Because we all know why there’s bad governance, because there are certain interests that are being protected. And in a lot of economies, I’ve worked in many, many countries in my life, it’s usually that very powerful vested legacy interests are doing everything they can to maintain their place and to prevent new entrants to prevent competition. And they do that through all sorts of import duties, export licenses, quotas, regulation that’s designed to reduce competition. Where will the impetus for good governance come? Will it come from countries realizing that they’re all competing for the same human and investment capital and that the winners will be the ones that create a more stable, reliable, predictable playing field?

Hakeem Belo-Osagie: I think it’s going to come in two ways. On the one hand, the crisis or the difficulties the countries endure, in many respects, trigger off a certain introspection. And I’ll just say that if you look at countries like Japan, the crisis of the Second World War, you look at what happened to Europe and you can see the way in which it ushered in years of enormous growth in the 1950s and the early ‘60s. So I think crisis forces people and forces nations to think again and to rethink their model. So I think that’s going to be one impetus. And therefore, I think that, paradoxically, the COVID situation, the energy transition is going to lead to a certain amount of rethinking. That’s one aspect.

The second thing which I’d like to point out, which is usually not often pointed out, comes from what you’ve said about vested interests. I’d like to take a slightly different angle on what you’ve said. I think that there will always be vested interests and there will always be powerful groups who take care of themselves. And I’m not so sure that’s the crucial question. I think the crucial question is: That elite, that is taking care of themselves, what is their long-term vision for themselves and for their countries? Do they have a long-term vision in which they still want to be on top, but they have the sense that they have got to do enough for the base of the population to remain there? And do they have a picture of themselves as being the leaders of great countries? And you can characterize several countries who are very much like that. Or is their vision very extractive? They don’t really care what happens to everybody else.

Darius Teter: They have three passports. Their money is in a bank somewhere else.

Hakeem Belo-Osagie: Absolutely. And so, deep down, they don’t really care. And they don’t have a sense of patriotism. And I see it very much in, for example, I’ll go back to the Middle East. And I see very much that however well-to-do I see some of the leading families in the Middle East, it’s still important that Emirates does very well.

Darius Teter: Hakeem has plenty of experience with extractive elites from the six years he ran the United Bank for Africa. This time at UBA gave him a deeper understanding of these systemic challenges that face African finance, even now. Now, I understand that when you took the government’s shares, what you inherited was a bank with far too many employees, a high portfolio of non-performing loans, and it was not very well managed.

Hakeem Belo-Osagie: And highly politicized.

Darius Teter: So what business does a guy who never ran a bank have jumping into that?

Hakeem Belo-Osagie: Interesting that you ask that question. There’s a Japanese saying that sometimes you have to jump through a window not knowing what’s outside, and the knowledge of exactly what the problems are is itself a constraint. And therefore, I think that if I had known too much about banking, I may not have done it. I may have said, this is just too much. But in that sense, I wasn’t a professional banker. I was just an MBA who just had a certain overconfidence that MBAs have, that any problem can be analyzed, can be assessed as a problem of management. A strategy can emanate from it and you should be able to execute. And that was my going-in approach to the matter.

Darius Teter: Hakeem’s story isn’t just about the problems he faced. It’s about how he solved them.

Hakeem Belo-Osagie: You’ve got to start shifting who are the customer base, how are the procedures improved upon, how do people get into the culture of marketing when they’ve really been accustomed to people coming in to see them as the banker. They don’t see the banking as a service industry. In a sense, a lot of it has to do with the prestige of people coming to you to borrow money.

Darius Teter: So I love this point. So I want you to share with me a moment, a critical inflection point where you needed the bank’s leadership and staff to adopt your cultural mindset about what this bank should be. Is this a matter of very slow, incremental change? Was there an all-hands meeting in the conference hall where you said, “Folks, this is who we are going to be”?

Hakeem Belo-Osagie: No, I think there was never one, there were several. But the one that always hits me the most is the time at which I kind of laid out our situation, our financial situation, and why we’re going to have to do certain kinds of things. I did it on a Thursday or Friday and on Monday, the workers and some of the management had taken over the head office building and locked us out. That was a pivotal moment for me.

Darius Teter: Because they knew cuts were coming.

Hakeem Belo-Osagie: They knew cuts were coming and they genuinely thought that I was absolutely talking nonsense. Or in some cases they just could not take change. Human beings don’t like change. And maybe if I was one of them, I would’ve reacted the same. That was the pivotal moment for me. And it was then to just finally go and sit down and talk to a whole lot of them, very hostile environment.

“Mr. Belo-Osagie, why do you hate people so much? Why are you so mean? Why are you so vicious? Why do you like sacking people, just because you are privileged?” And try explaining that the path we are taking is going to lead us to the complete collapse of the bank. And they say, “No, it’s never going to happen.” Climate change, never going to happen. And you’re trying to break it down to them and say, “This is where we’re going to go.” All right, I will go the way you are going, but these are the signs that you’re going to see. And as you see those signs, let’s reconsider. All right. And so I think that moment was a pivotal moment for me, because my fear was, I need to carry them along, but will they realize it so late that we’ve gone over the edge?

Darius Teter: That’s fascinating. So it was your sense that some meaningful proportion of the bank’s employees had no idea about its financial troubles or didn’t fully understand.

Hakeem Belo-Osagie: They didn’t fully understand.

Darius Teter: Did that include managers, senior people?

Hakeem Belo-Osagie: Oh, yeah, managers in particular.

Darius Teter: Did not understand the cash position of this bank.

Hakeem Belo-Osagie: They didn’t understand where it was inevitably going to lead because, previous to that, a lot of the accounts had been falsified. So they were just declaring these profits. But effectively, they were eroding their capital. And a lot of them were not aware of it. A lot of them, for example, didn’t realize that, look, we are banking old customers who are going nowhere. There’s a whole new group of customers that we’re not banking, who are going to be the future, and we need to start banking them.

Darius Teter: Managing a sometimes hostile workforce taught Hakeem about the empathy required to be an effective leader. So you needed to help them understand that this was a crisis.

Hakeem Belo-Osagie: Yes.

Darius Teter: And then you needed to help them have a vision of a way out.

Hakeem Belo-Osagie: Yes, correct.

Darius Teter: And you committed to metrics along the way so that people could see what was happening.

Hakeem Belo-Osagie: Yes. Now there’s another point, though. I also needed to understand why they hated me. I didn’t understand it until that event, until this lady, I remember she came up to me and she just said to me, “Mr. Belo-Osagie, I’m going to give you a chance because you said something in the speech. You said that you don’t like firing people and you told a story about how you read a story to your daughter before she went to bed at night because your daughter asked you, ’Dad, people in school keep saying that your dad likes retrenching people. What does retrench mean?’” So the lady looks at me and said, “The fact that you could actually reach your daughter at night means that you can’t be completely evil.” That’s the exact word she used. Okay. And I think that it suddenly struck me that I had to also think about how I was appearing to them.

And then I had to realize that a lot of the people who came in to change the bank were people like me. And therefore, there were not many people who were like the people who were trying to change. And therefore, there was a cultural conflict as well. And I needed to now start bringing other kinds of people to work with me who were closer to the people I was trying to change. Because they could better sell what we were trying to do. So, for example, if you’re running a company in which they’re all high school-educated folks, and that’s how banks were in those days, and you are arriving with a group of trendy, investment banking types, all MBAs, you’re obviously setting yourself up. But I didn’t see that at the time. But that was a critical event in which I saw I needed to change them and I saw how I needed to change myself.

Darius Teter: You’ve been involved as an investor, as a mentor, or somehow tangentially involved in some of the biggest tech startups on the continent. And I was going to ask you, there seems to be a lot of frothy excitement about health tech, ed tech, med tech, fintech, and a lot of new capital flowing into these sectors. Does the market justify this level of excitement and energy and is there enough for everyone to grow in just the Nigeria market? We’ll go to the continent in a second.

Hakeem Belo-Osagie: The first thing I’ll say to you is that there’s really nothing unusual about the excitement. There was excitement about the banking industry in Nigeria at one time, and we had 100 banks at one time. There was an excitement at one point about the oil and gas industry. And we had about a hundred groups who were all setting up their Mickey Mouse oil companies. And in a sense, that is probably in my view, a good thing, because what it does mean is that rather than a government agency, only allow three or four powerfully connected groups to dominate an area. You have a huge amount of competition. And then, inevitably, there’s going to be a shakeout. Some are going to survive and be very strong and very profitable. And many others will just go by the wayside. Now, in the early years, everybody will be doing well.

But inevitably, what then happens is that some can no longer continue to lose the money that they’re losing and the special breaks are no longer there, and they will fall by the wayside. And I’ve seen it in the oil and gas industry, we saw it in banking in Nigeria, and we’re going to see the same thing in tech. And out of this, I think a couple of very strong groups will emerge, which have a combination of … the basic model is very good. It’s a good model. The second element of it is that they have had to make that adaptation from brilliant idea to effective management that successfully scales and handles their transition. And not all groups can do that. And then at the same time, it’s also got to maintain a good relationship and understanding of the national regulatory environment, which, in a sense, forms the basis of competition.

Darius Teter: That national regulatory environment may be the biggest key to whether these tech start-ups, particularly in finance, can succeed.

Hakeem Belo-Osagie: I think that the fintech companies, they will go much farther than people expect. And the only thing I think that will restrain them is going to be regulation. It’s a regulatory environment that thinks “banks” and sees the protection of the existing banks as number one.

Darius Teter: I’ve heard you say in a previous interview that for a lot of businesses, how you manage the government is 50 to 60 percent of your work in a place like Nigeria. What does that mean?

Hakeem Belo-Osagie: That means that because the government is such a critical market player, in the sense that it’s either buying services or, where it is not buying services, it is providing services on which you depend. It is writing the rules of the game. And it has such an overwhelming power within the judicial system in which, yes, you can enforce your rights. But the time taken to enforce your rights, you may no longer exist as a company. Now, if that mindset is accompanied by a mindset on the part of the bureaucrats or the political officials that we have the right to exercise this power, then you find yourself having to work, having to deal with that entity, the government.

Now, a lot of young people of course have grown up in an environment in which government was a bad thing. The less government, the better government. They’re children of the Reaganite and the Thatcherite generation. Now my generation is, in that sense, different. We’re from the L.B. Johnson, the Kennedy generation, it was a good thing. What it does mean is that they’ve got to move away from thinking of the government as a hostile group. But a government is some identity in which you’ve got to explain to them what you’re doing. They’ve got to understand the technology. They’ve got to understand the ecosystem. And many of them simply don’t understand it. And when government officials don’t understand something, the instinctive reaction is to say no.

Darius Teter: Right. It’s so much easier to say no. It’s much less risk. I’m absolutely stunned at the number of start-ups in this space and all the neobanks and nonbanks and all the things that they’re providing. Now, I’m going to stipulate that there is a role for regulation to protect consumers.

Hakeem Belo-Osagie: Absolutely.

Darius Teter: Put yourself in the shoes of the Nigerian regulator. I think it’s NTIDA, I don’t know which agency it is. But what are they doing to stay current and to create a regulatory environment that serves the function of regulation without strangling the market?

Hakeem Belo-Osagie: What I think they need to do more of, and I won’t say that they’re against the tech companies because I’ve experienced this kind of situation when we first started a securities trading company. We had to spend a lot of time talking to the banking supervision to say, we’re not a bank.

Darius Teter: We’re not taking deposits.

Hakeem Belo-Osagie: We’re not taking deposits. And then to start encouraging them, why don’t you go visit other countries that are, say, five years ahead of Nigeria, so you can get a sense of what the future is like? And then you can then talk to other regulators who’ve experienced this and who have seen that it’s not as frightening as you think it is. And then the next thing is that you’ve got to let the regulators know, in a way that’s not condescending, that they need to understand the issues and they’ve got to hire into the central bank a lot of people who are younger than they are, who understand that.

I believe that participants in the marketplace have to share with them, ”Look, there’s some funny things that are going on and we admit it, and these are the steps we will take to ensure that it won’t happen again.” So therefore, there’s a certain amount of self-regulation that needs to take place. And sometimes you’ve also got to call yourself out because that builds a certain trust with the regulator so he doesn’t see it as us and them.

Darius Teter: What about if the real force behind the regulation is not visible, that there are very powerful, entrenched interests actually turning the dials? And I can think of examples where IMPSA tried to move, for example, into South Africa and the banks saw this coming from a mile away.

Hakeem Belo-Osagie: Yes.

Darius Teter: And said, “No way are these guys eating our lunch. We’ll do what they’re doing when we’re ready. This is high risk. Trust us, we’ll be there eventually.” How much of that sort of “the Wizard of Oz behind the curtains” is going on here?

Hakeem Belo-Osagie: Okay. Yes. Now where the incumbent waves the national flag, they’re the strongest. So the IMPSA one into South Africa to me is expected. The existing banks will wave the national flag and wrap around, “We’re protecting our nation against these foreigners, with these bizarre ideas.” Now, what would be interesting is how they react to a South African IMPSA or a group of younger techies inspired by an IMPSA, maybe even funded by IMPSA. And they then pose the question or say, “Look, you, the large incumbents who grew up in the apartheid regime, what have you done for lending for the poor folks? How have you been inclusive?”

And we think we are taking a shot at that. And why should we be regulated out of that competition? Now that to me would be the interesting challenge. And that to me is something that may happen. So I think that even within countries like Nigeria, I think the biggest issue that a lot of the public has about big banks is that it hasn’t, in a sense, benefited the wider population in the way in which telecom has. So with the telecom companies, it started off, only the well-to-do had phones, right? But today, the poor have phones and pricing has steadily dropped. We haven’t had that same inclusive aspect to banking.

Darius Teter: Given Hakeem’s vantage point on African finance, I wanted his opinion on some of the questions that we explored on season one of Grit & Growth about fintech and about the future of debt for small businesses.

What will it take to make credit affordable to SMEs that want a $100,000 capex [capital expenditure] loan in the African continent? Because, if I have to say we have 1,000 alumni from our program, and these are typically, about 30 percent of them are tech or tech-enabled, but most of them are not on some kind of hockey stick growth trajectory. Or if equity was available to them, they’re actually not interested in giving up ownership of their company. What they want is reasonable, affordable credit to grow and build their business. And I don’t care what country you’re in, with a few exceptions, the complaint is that it’s just not there. Banks are just not interested in that business.

Hakeem Belo-Osagie: Let’s look at it from the point of view as to why don’t the banks want to go into that area. I think that it comes down to the following issues. One is, there’s got to be enough data that can predict who repays and who doesn’t repay. So I think that the question of what data is predictive and how can you accumulate it, I think that’s one, in a very big, important aspect.

Then I think the second important aspect is what is the technology that can allow us to access these customers and utilize this predictive data in a manner that drops the cost of doing so, because ultimately, if the cost of acquiring a customer, going through the transaction, and making enough successful repayments, that cost has to be less than the revenue generated from giving the loan. And I think, ultimately, I think that’s a question of technology, data, and how it is done. And I think that as you begin to crack that question, that problem, you will then begin to make progress there. But I don’t think that can be done in the traditional manner in which we have sought to do it till now.

Darius Teter: Although Hakeem sees entrepreneurs bringing real progress, he also preaches patience.

Hakeem Belo-Osagie: The thing I want to point out is that as always in lots of new ideas, you’ll always have those companies that have the basic idea and can speak to it. And then you’ve got another set, which is usually a subset who approach this thing with intense and unrelenting rigor.

Darius Teter: You mean on execution and operation.

Hakeem Belo-Osagie: There’s always sometimes, in some companies, a desire to move very quickly because you have this sense that you’ve got to move quickly for your competitors and there’s money flowing in, investing in you, and there’s the danger that you then launch and you then grow before you have all of these issues totally figured out.

Darius Teter: Is that pressure coming from the investors or from the founders?

Hakeem Belo-Osagie: In some cases, the investors. And I think that part of that is due to the fact that we still have, and I would call it a US-imposed, three-to-five-year cycle in investments. And I say US-imposed, not because the US government directed it, but because the timing in the United States for a lot of these things is three to five years, and then you —

Darius Teter: Strategic exit or something.

Hakeem Belo-Osagie: Exactly.

Darius Teter: You get your money back out.

Hakeem Belo-Osagie: Exactly. Now, in my own experience as an entrepreneur, three to five years, I was still turning around. I’d realize that I needed to pivot a little bit here. I realized that I’d got some hires wrong. And I found it was really somewhere between years five and seven, or six, seven, eight, that I now felt I was in my stride. And then you started to get the truly phenomenal or exponential growth. And it had a solid base.

So I do think that we need a longer time horizon. So there’s got to be more patience in the capital. And also, the founders themselves need to acknowledge that they’ve got to do very diligent work before they roll things out. On the one hand, you’ve got that vision. And I hate to use that word, but you know what I mean. But you’ve got to reduce that to the series of steps that you need to move from where you are to where hopefully you wanted to go to. And if I have a worry, it is that I know a lot of young folks who — they’ve got that big picture, but that the boring bit of this step and this step and this step, which is often mundane, tiring, and exhausting, that is crucial.

Darius Teter: And as a founder, you have to be more than just diligent. You’ve got to be able to trust yourself and your process.

Hakeem Belo-Osagie: Courage is vital in whatever you’re doing. You’re really leading people down a path in which you pretend you can see the end of the tunnel as a leader, but you can’t really. But you have a sense that this is roughly where you need to go. I often quote [Robert S.] McNamara, who talked about “the fog of war.” And I deeply believe that there is also a fog in business. There is so much that you don’t know, and I think great leaders have the ability to live with not knowing all the answers, but being able to carry people along and solve those issues as they come along. And having the flexibility to make those changes and having the sense of security of saying to themselves, “Don’t know everything, but I’ll solve it as it comes along.” The founder has got to have an appreciation of the complete array of talents that he or she needs and of bringing them together.

There will be some folks who are particularly good at solving the technical problem. There are one or two folks who their forte is operations and just executing. There are one or two folks who are going to be very good at the fundraising element of it, constantly thinking about the cash flow analysis, warning that the spend is very high and don’t think you have as much runway as you think you have. And so I think that all of these talents really have to come together and I think a founder has to appreciate that it’s only a genius that is good in everything. That’s why I think the business history, which all founders worldwide study, has to let them know that, yes, there was Bill Gates, yes, there was Steve Jobs. But without a doubt, there were two or three other people who worked with Bill Gates, who you don’t hear as much about, but who were indispensable to the overall success. And the same with Steve Jobs. But the way it is, one person gets a disproportionate share of the limelight and therefore, it creates a misleading sense of why you’re successful.

Darius Teter: I love the mindset point because so many founders in their early days are being called on to solve problems that are way outside their comfort zone. And they have to do it. But they also have to understand that at a certain point, that’s going to slow the company down. We call it post-heroic leadership where you don’t have to be the hero of every story, right? And for technical challenges for which there is a solution, you just maybe have to spend some money to find it.

Hakeem Belo-Osagie: Yes.

Darius Teter: That type of leadership can work. But for what we call in the Stanford program, adaptive challenges, challenges to your strategy, competitive landscape, exogenous shocks, without a team you’re lost. And if the team thinks that you’re going to have all the answers, they’re not going to come up with any.

Hakeem Belo-Osagie: Absolutely. And I think it also introduces and confronts this issue of trust. Trust in the sense that here you are, you’re in a country in which there are different ethnic groups, different religious groups, and you’re going to have to work with people often that you don’t know in a society which is not heavily structured, in a society in which there is not as much rule of law as elsewhere. And therefore, the need to work with people that you trust becomes essential. And oftentimes, the problem of the founder is that he has difficulty in trusting other people because he’s heard so many stories about how A trusted B and B took off with the company.

Darius Teter: Hakeem’s views on leadership reflect his broader views about the individual and the collective in what truly makes a business successful. You were a guest keynote speaker at the Stanford Africa Business Forum earlier this year and you made a comment that business leaders in Africa are overrated.

Hakeem Belo-Osagie: Yeah. I really think that! I think that for two reasons. And one, it’s because, does this kind of businessman in Africa really have, as his ultimate objective, only the maximization of shareholder value. We have the debate in the United States all the time. Part of me thinks, in the United States, it’s a slightly easier question simply because this is already a very wealthy society. Now, in Africa, the imbalance of power, the skewed nature of power, is even worse. So to me, one of the things that worries me a lot is that we’ve spoken a lot about how business should be in the forefront, the government should leave and hand it over, but we still haven’t found how, for example, the private sector, which is supposed to be heroic, how does it deliver low-cost medicine to 80 percent of the population? How does it deliver, can it deliver, infrastructure that goes outside of the capital city and of one or two other commercial centers? How does it develop low-cost education and health for everybody? We haven’t.

Darius Teter: But I think you’ve answered the question you didn’t want me to ask also, which is that it’s not that you have to abandon the maximization of shareholder value, it’s that your success should matter to someone other than you.

Hakeem Belo-Osagie: Yes.

Darius Teter: When we try to pick companies for the Seed program, of course we like social enterprises that are commercially viable. But the question I always ask is: If this company grows 10x, will it matter to anyone other than the owners?

Hakeem Belo-Osagie: Yes.

Darius Teter: Are they solving a problem that I care about, that people there care about? Are they solving a meaningful and important problem?

Hakeem Belo-Osagie: But that problem is even more acute in Africa and therefore more and more and more, we have to measure how well we’re doing, not by how many people are on the Forbes cover, not by how many billionaires Africa has, but basically what has happened to the bottom 40 percent. Are we able to say, as the Chinese can say with many things we don’t like about their political system, but they can say, “We, over the last 40 years, have lifted X 100 million out of poverty.” And I think that business strategy, business success, has got to be a strategy that, yes, enables great companies, allows people to make certain effective and enterprising people to make good sums of money. But it has also got to be a system that lifts out of poverty large proportions of the overall population.

Darius Teter: I think this is the most compelling part of Hakeem’s outlook, that success on both the micro and macro level is never about just one person, it’s about everybody. It’s reflected in how he leads his views on regulators and his hopes for the future of the continent. It’s a vision that we at Stanford Seed share and it’s why he’s such a good fit for us. I’d like to thank Hakeem Belo-Osagie. We’re lucky to have him on the podcast and as our board chair. Hakeem’s philosophy aligns so well with what we’re doing here at Stanford Seed and we’re excited to work with him to make our programs even better. This has been Grit & Growth with Stanford Graduate School of Business. And I’m your host, Darius Teter. If you like this episode, leave us a review on your podcast app. It really helps us to share the stories of these incredible entrepreneurs with as many people as possible. To learn how Stanford Graduate School of Business is partnering with entrepreneurs throughout Africa and South Asia, head over to the Stanford Seed website at seed.stanford.edu/podcast.

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