Why Nigerian businesses don’t scale up.
Before inspirational business coaches Tim Robbins and Gary Vee, there was Nigerian Rhumba, Calypso inspired musician, Mike Okri. His album, Concert Fever in 1989 contained the timeless record “Time na Money” where he sang
“Time na money o, Use your time well, do beta thing, money no dey fall from heaven, do beta thing, money go come. Na true word I dey tell you so.” (Time is money, use it well and profit exponentially)
1989 was a year filled with riots. For the first time, since 1978, when the World Bank started her country classifications in the World Development Report, she classified Nigeria as a poor country needing financial aid. She was steeped in over USD 30 billion debt, mostly short term. The economic policies of the military brass and government at the time had failed the state grossly and there was an acute food shortage, some of that based on activities of rent-seeking middlemen. 1
This was the atmosphere in which Mike Okri released the hit single Time na money, essentially advising Nigerians to scale up their activities and enterprise if they wished for an improvement in their situation.
Every business owner understands scale at some level, meaning the conscious decision by a firm to seek to produce more units of a product or service at reduced costs to the company. Scaling a business is about doing better and being more efficient. In other words, scaling is about more products, using less money.
However, many forget, that the most important thing in scale isn’t only doing more for less cost, but doing more with less time. The inability to do more with less time is the reason why the costs of production are so astronomical in the first place.
Every business book writer will tell you easily that time is the most precious resource, but very few will tell you that the secret to your ability to scale up operations is the concept of scarce time.
Again time is the most precious resource, but that is for people who don’t spend 8 hours in traffic as Lagosians do daily which is 2 hours more than a flight from Lagos to Istanbul, Turkey.2 Commute time to work shouldn’t exceed 1 hour to and another 1 hour from work. This way the employee is able to give another 8–10hours to do diligent work for their employer. Grant the employee another 1 hour to settle down at home with the family and another 1hour dinner time. The employee is left with between 6–8 hours to sleep and prepare for the next day’s work.
People with stunted chronic sleeping patterns can’t be productive at work.3 It is not magical, the body can’t give what it doesn’t have. It will process its rest period. Or its engine will become overheated, meaning sickness and ailments and more absence from work, less productivity, and inefficiency.
Everyone in the world has agreed they each have 24hours in a day. What you do with your 24hours determines how productive you are and how wealthy you are. Spend hours in traffic daily, you will be poor.
The concept of time of service or production is very important. How long does it take to serve a customer or produce a product? This is where the big boys play. In the time it has taken you to read up to this point, which should be between 2–4 minutes, McDonald's would have produced anywhere between 10,000 to 20,000 hamburgers and served between 100, 000 to 200,000 customers.4 This is the secret sauce to their global success. This process doesn’t start with the 17 year old by the counter that takes the order. It actually ends with the 17-year-old, while it starts with how McDonalds suppliers feed and grow their farm animals. How long does it take them to obtain beef? It is a complete process that shows an understanding of time is money.
Nigerian banks are some of the most efficient institutions in Nigeria. In fact, one had said, they are the most scale hungry establishments in the whole country. 5
So imagine how alarmed I was when I was helping a friend out with filling their bank opening forms and I realized that a major bank in Nigeria with over 25 years of operations has 20 pages of information to process to fill a bank account for a sole proprietor. Some of the information items in the account opening package included addresses, phone numbers, email addresses, signature, etc. The form had 18 rows for entering phone numbers, 8 rows for entering email addresses,8 signature points, 14+ rows for addresses for residential, business, and registered address. My conclusion about the funny eureka moment was this form could only have been designed by a low rate printer in Somolu printing business district and not the corporate communications department of the bank or a branding agency. 6,7,8
When next you walk into a bank to complain to a customer service person about being wrongly debited by the ATM machine and needing resolve, and you see her swarmed in activities on her computer, it is most likely because she has to enter 15 phone number spaces for one account opening form before the closing of the business. (That is why customer service personnel are the most overworked in the Nigerian banking system. Someone needs to do a health study into those classes of bank workers).
Little wonder the standard reply to all ATM issues, is; Wait for 24 hours if it doesn’t resolve itself, come back and fill a form. This sentiment is telling you to put your life on hold while the bank tries to sort hers. How many 24 hours do you have to give to a bank in your lifetime?
The Nigerian banking service is really poor when you consider that elsewhere customers can deposit 3rd party checks in their accounts through the ATM and get instant value immediately among other things You then wonder what is the point of collecting phone numbers 10 times when you can’t guarantee the customer is not a criminal.
I remember going into a bank for the first time in the late 80s and we picked a tally number* 297, meaning we had to wait for that many people to be processed before us. People used to spend whole days in the banks.9 We have moved forward in so many ways only to move back again.
This lack of respect for time has permeated every single facet of our life, whether it is trying to register your business, getting a drivers license, an international passport, boarding a plane, getting to and from work, dealing with suppliers for your business, getting to see a doctor in an emergency, receiving deliveries from an online store and getting actionable results from elected officials. Almost everywhere, you thread in Nigeria, you are almost always told to wait.
Poor appreciation for time is largely the reason why 58 million South Africans have a GDP of 368 Billion USD of value (2018) with an average life span of 63 years 10 while Nigeria’s 195 million people have a GDP of 397 Billion USD with an average life span of 54 years.11 This essentially means 4 Nigerians are required to do what one South African can do.
Time is money, and those who respect time will win, the car hire business disrupted the taxi business, the okada rider disrupted the buses and the taxis, and the car hire business. Uber is disrupting all of them because she completes 1,000 trips in 5 seconds!!!! 12 My suspicion with COVID is that remote work and working from home will disrupt them all and real estate prices. Nobody has 8 hours to stay in traffic if they can afford it. Either the winning companies today get it or the smart companies of tomorrow get it.
Today, an overworked customer service person will suffer a heart attack and by providence manage to get to the hospital after being overworked in an inefficient work environment. The doctor who just spent 4 hours getting to the hospital will tell her to please wait. She is in the lobby with her loved ones, waiting to die, just like your business.
Time is no joke.
References
1. https://www.nytimes.com/1989/06/04/world/economic-riots-are-spreading-in-nigeria.html
2. https://www.cnn.com/travel/article/traffic-stress-lagos-nigeria/index.html
4. https://everysecond.io/mcdonalds
6. https://medium.com/@ajileyeb/shomolu-as-a-metaphor-for-nigeria-dcf3c26c6667
7. https://www.sunnewsonline.com/visit-somolu-nigerias-biggest-printing-hub/
8. https://dailytrust.com/shomolu-the-lagos-colony-of-printing-and-forgery
9. https://businessday.ng/lead-story/article/nigeria-returns-to-days-of-tally-number/
10. https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=ZA
11. https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=NG
12. https://everysecond.io/uber
A tally number is a card that gives you a unique number on the queue that tells you when you will be most likely served.
