Global multinationals throughout Africa are increasingly filling their top leadership teams with executives from the continent – a move away from the historical trend of appointing mostly expats to key positions.
Research into the leadership landscape in key economic hubs in Africa, shows that local leaders make up the vast majority of executive teams of multinational organisations in Africa. Only 35% of executives in the leadership teams surveyed were expats and, of these, 30% were expats from other African countries.
The findings indicate that, contrary to some perceptions, there is indeed a notable pool of local talent ready and able to take up senior leadership roles, and that companies are increasingly willing to take the step to do so, instead of merely jetting in leaders from head offices around the world.
The soon to be released annual Jack Hammer Executive Report Volume IV, The Africa Report, researched the makeup of the executive teams of 36 multinational companies which successfully navigated expansion and growth in Africa, including General Electric, Siemens, Unilever, Microsoft, Coca Cola and Procter & Gamble.
The research interrogated several key data points among the top leadership in these companies, including qualifications, salaries, roles and leadership pipelines, gender transformation and individual track records.
We can say with great certainty that this research has debunked the notion that multinationals would rather not appoint local leaders to key roles. But companies still fill at least one of the two key leadership positions with an expat, although the gap is closing.
The research shows that 58% of companies had an expat as Chief Financial Officer (or equivalent) and 61% of companies had an expat as CEO (country head or equivalent).
It is not surprising that 61% of CEOs are still expats, given the reality that companies still elect the safe, ‘tried and tested’ approach when making their most senior appointments.
Yet the 39% of companies that have made a local appointment to the most senior position shows that businesses are increasingly recognising the benefit of selecting a suitably qualified executive who understands the local context to head their operations in Africa.
As an aside, it was also very interesting to note that in South Africa, even with its perceived well-developed talent pool, the number of expats were roughly comparable to the spread throughout other African countries surveyed.
Research further shows that the local executives who occupied the top positions had carefully navigated their careers right from the start, and held advanced qualifications in strong technical or financial fields, as well as having built a solid track record either at another multinational or abroad.
But too many companies still make leadership decisions based on inaccurate information and even on outright myths – then must manage the fallout from costly mistakes.
Expanding into Africa and growing a sustainable business is no longer an unknown, obscure exercise – although some companies still approach it as such. Knee-jerk stop-gaps for key appointments are no longer appropriate or necessary, and it is time for business to stop, think and figure out a coherent strategy for building their leadership teams, particularly given the well-developed and growing pool of suitably qualified and experienced local leaders.
Debbie Goodman-Bhyat is the CEO of Jack Hammer.