Good Strategy Starts with Clear Ambition

Vikki Tam, Bain & Company

TRANSCRIPT

Mandla: Hello and welcome to Deeply Rooted, a conversation about the business of food in Africa, where we dig into the ideas, the partnerships and the people growing Africa's food industry. Mandla Nkomo, the CEO of Partners in Food Solutions. Today's guest is someone we are honored to have worked closely with here at PFS. Vikki Tam, senior partner at Bain & Company Vikki has been with Bain for more than twenty five years, and the experience spans both commercial and impact sectors, from advising multinationals on growth and operations, to working with organizations in emerging markets to accelerate social and economic progress. She leads Bain's global food systems work and has become much more than a consultant for PFS. She's a long term strategic partner who has guided three iterations of our corporate strategy, including our newest ambition twenty thirty three, which we've just launched. So today we'll explore how a world class strategy firm thinks about building impact. How clarity and focus have evolved across our relationship. Our ambition twenty thirty three is designed to take FS and Africa's food processors to the next level. Thank you for being with us. Vikki, welcome.

Vikki: Great. Well, first of all, Mandla is an utterly my delight to be on this podcast with you. So thank you for for the invitation. So as you said, I've been with Bain for over twenty five years. Again, for those who are keen to date me, I joined Bain, uh, 1998, uh, in our Hong Kong office and actually started as a summer associate in nineteen ninety seven. And so really have been with Bain for a very long time. So I think my career can broadly be split into two, two halves, if you will. The first part of my career was very much in the commercial world. I spent a lot of time working with commercial clients, most of them in the tech and telecom space, as well as in the retail sector. And, I worked across quite a few geographies in, in Asia Pacific. I'm originally from Hong Kong. Uh, but I worked in offices such as Beijing and Singapore and Seoul and, Sydney and Melbourne and I spent five years in our Shanghai office as a, as a partner, leading our tech and telecom practice for, for Greater China, and also starting up our, pro bono program in China before returning to the, to the US, to New York, specifically, where my family has moved in the late eighties, so since twenty twelve or so, I have taken a bit of a, a pivot, if you will, in my own career and helped build the firm social impact practice. So since twenty fifteen, I've led the global social impact practice. And in that role, specifically delivered against our one point one billion pro bono commitment. So essentially, that's a ten year commitment that we made as a firm to give away that amount of pro bono resources to some of the highest impact, most innovative non-profit organizations, such as such as yourself PFS to really help take them to the next level and catalyze their impact and, and scale. so I've done that for almost nine years and handed over the practice leadership last year. but really since about over ten years ago, I've been leading a work on Africa food systems as well. And we're going to talk more a lot more about that on the call today, but I continue to lead our client work in that in that space. And a lot of our, multi-stakeholder partnerships in, in food systems.

Mandla: You really have such deep experience when it comes to strategy. Tell us, what are those five things that make a great strategy?

Vikki: Sure, first of all, I would just start by saying that strategies are always time bound, right? So there is a shelf life to any strategy. So while mission and vision could stay unchanged for a very long time, strategies can't. Strategies need to be refreshed generally every three to five years to account for changes in your external environment, and also as you take stock of how you're performing internally and how far you are up to your full potential, right? So I will just start with that very fundamental fact that strategies are time bound and need to be refreshed on an ongoing basis. Then there are a few critical elements to every good strategy. One is you want to start with a very clear what we call strategic foundation. And that is important to make sure that you have the right strategic insights to inform the choices that you're going to make, it creates that case for change to align your leadership team and the broader organization. But you need to have clarity in how your environment is changing, from a competitive landscape point of view, how your customer needs are changing, how technology, trends are, are evolving, and internally. Do you have a clear understanding of what drives your profitability? What are your distinctive capabilities? What are your strengths and weaknesses? So all of those are important questions you need to to answer as the first phase of your strategy. And that's what we call by, uh, strategic foundation. Now oftentimes during this phase of strategic foundation, there is an inquiry into what we call the core right of your organization. Okay. And, I know we talked about this at PFS as well. And we say that, well, the core is that intersection of where you have your greatest impact, and your most distinctive capabilities and where you are the most financially sustainable, if you will. Right. In a business. Similarly, you can think of it as your most profitable customer segments and geographies and where they intersect with your most distinctive capabilities. But answering that, again is an important part of that. Uh, let's call it the self-awareness you need to have as an organization, because that helps inform, uh, how you grow as well, right, where you're likely to be most successful. Now, following that, that face of, setting the strategic foundation you then need to have a clear alignment of your ambition. What would success look like in, you know, five years, right? Whatever the appropriate time frame is?, and your markers of success could be defined along different ways in terms of your impact or scale or, um, financial, strength. Increasingly, you should be thinking about outcomes and impact, right? As part of your ambition, not just inputs and outputs. and that's the second critical phase, right? Because once you have that clarity and that alignment of ambition, it goes a long way to informing the choices you make. And that's your third phase is the strategic choices, and we talk about strategic choices in terms of where you play and how you play. Right. Where you play, if you're a business or even an organization like PFS will include choices on geographies, priority geographies or customer segments, value chain priorities, for example, how you play is really about the distinctive capabilities that you need to invest in. So those are the choices that you make. The fourth element of a good strategy is what we would call operating model alignment. And again we talked about this a little earlier. We like to say that the operating model really is the bridge from strategy to implementation. It is what translates your strategy into what you do, and so what the elements you need to think about would be things like your governance and ways you make decision, your business processes and ways of working, your talent capabilities, technology enablers and tools. Right. The data you need to have to make the right decisions, and the leadership team alignment. Right. That is so crucial to implementing any strategy. And the last part of a good strategy, again, going back to what we talked about earlier, is the actual program management of that implementation. do you have very clear timelines and ownership and metrics? are you embedding that change in day to day routines and behaviors and processes? Are you creating the feedback loops to know what's working and what's not, and learning about what you're doing and adapting some of your initiatives in the way that, that reacts to changes on the ground or what's happening on the ground. So those are the critical elements of a good strategy.

Mandla:  Absolutely love that. And I can kind of, uh, I'm having flashbacks of the process that, you know, you led us through. Now let's go to the process. And, and this was the third time you personally were involved in doing this, in this current strategy. Is there a moment that you felt for your team, at least, or for you It was an aha moment around, okay, now we see where this organization needs to go next. After the last two strategic periods that they've gone through.

Vikki: Yeah. Now I'll, I'll share mine. I'd be keen to hear if you have aha moments on your end as well. so, you know, as you said, we've been with PFS for a long time. So it's been so exciting to see the organization evolve over, over the years. And, you know, before this strategy, I recall the last strategy was very much focused on this concept of high potential clients and how you need to really focus on food processors and food businesses that really have that potential to grow. And I think one of the aha moments for me, in this phase of work, if I were to name one, was when we took a look at the portfolio that PFS has and really do some very granular analysis on where your impact is coming from. Right. Who are the businesses that are growing the most, that are creating the jobs that are driving, right. The production volumes of foods and nutritious foods. We realized that it was actually a reasonably small portion of the business. And I'd like you to talk about the specific numbers. Right. But it's very much the eighty over twenty rule that you often find in business and certainly in this space of working with entrepreneurs. Right. It’s the sort of twenty percent or so of businesses that are driving eighty percent of the impact and the growth in your, in your portfolio. And I think being able to stare at that data so clearly was really eye opening for all of us, not just our team at Bain, but I believe for you as well. Mandla and the team at PFS and your board and so on. Because you can't argue with those facts, right?

Mandla: That's right.

Vikki: and again that objectivity in what is, you know, where do you need to focus in order to drive the impact you want to have? I think that analysis really brought that home to all of us in  really non-controversial, really compelling way. So for me, that was a that was a big aha moment.

Mandla: I really liked that. And, and I fully align with it because when, when we dug into into the data that our portfolio was showing us and first of all, credit to the PFS team that we actually had reasonable data to work with, right? We actually could go and find stuff and build insights around it. And, and so realizing that, you know, the services we provide in the form of the volunteer assignments that we deploy, the staff that we have in Africa, the cost for helping a business that's declining in size, or that staying the same or growing phenomenally, from our side the cost was the same. But then we started asking the question, okay, now we always talk about that we are in this for impact. Therefore, it makes a lot of sense for us to say, okay, let's choose better, let's fail fast. If businesses are not moving in a particular direction and let's deploy this scarce resource, you say that, you know, strategy is often about how to make the most of really constrained resources right, for the greatest impact. And for us, it was how do we find these companies that will really deliver for smallholder farmers through being a reliable market, paying decent prices and ensuring that farmers are getting the signal for what to grow and what quantities, and ultimately delivering to consumers across the continent. Food that could be attested to be safe,  at an affordable price and with the right kind of nutrients. And when that was clear and in front of us, the choice was easy. So when we started diving together with your team around. Okay, so what is that point? I remember distinctly that, um, there was a school of thought that, hey, maybe let's keep it at, uh, half a million dollar size business in terms of turnover and, another school of thought that says, well, let's be bold and ambitious and say, well, let's cut let's put the cut off at a million dollars, because at that point, a business is has already overcome a lot of issues that businesses in Africa face, and I think they are ready to absorb PFS services. And for me that was one of the aha moments. But the other one, Vikki, was taking that that thought to its logical conclusion to say, okay, yes, it's great to have impact at a at a smallholder farmer level, consumer level. But what is the dollar number that we want this portfolio of businesses to generate? And for me that's what keeps me up at night. So we borrowed a billion dollar number from you and said, you know what, we want this portfolio of businesses to collectively generate a billion dollars of turnover at the at the time that our ambition 2033 gets reviewed and the reason why this was so important is it's not so much about billion dollars. It's about what that billion dollars means in terms of people employed in terms of raw materials purchased from smallholders, in terms of products delivered to, to, to consumers, and in terms of economic contribution that the businesses we support can have. Now, me and the team can wake up every day and pursue that ambition because it's bold, it's significant, and when we get it right, we can contribute to food systems transformation. So for me, that was that was it I was I you had me there at a billion.

Vikki: Yeah. Well and you you're, you're you said it way better than I did Mandla. But I think that's what got us right collectively. So excited about the strategy. If I may, just kind of reflecting on what you said, you know, I think it's important to recognize that Africa food Systems is very, very complex, right. And so, you know, when we talk about this aha moment that we both had around, well what's actually driving the impact there was a certain amount of just learning that we all we all did as, as well. Right. It wasn't just we're asleep at the switch, so to speak. It wasn't that it was because, you know, transforming Africa food systems and growing these businesses in Africa, as you know, are very, very challenging. And you know, those barriers, you know, better than I do from just broader systemic challenges in the enabling environment, of infrastructure and reliable electricity, right, to how hard it is to secure sufficient quantities of input at the right price, at the right quality, to having the right technical expertise, to, you know, process ingredients efficiently. Effectively. And how do you make sure you're reaching markets? again, most effectively, and all the regulatory complexities, that you might have to deal with. so it's, it's important to recognize just the complexity of the environment that these businesses often work in, and of course, that is why PFS, among others, exist. Right, but what was also very clear to, to us was the absolute, absolutely critical linchpin role that these businesses could play if they are able to grow. Right. And I think we talk a lot about this concept of high potential farmer allied intermediaries, but it's really putting the focus on the middle of the supply chain, which is, of course, where PFS and some of the other organizations work with focus on as well is if these food businesses are able to grow, they actually can have a disproportionate impact on many dimensions of food systems outcomes. And they really are the ones who can anchor more resilient food systems, right? They can provide more affordable, nutritious foods to the consumer. They can create jobs and drive economic development, and they can create the demand signals, the markets, the reliable markets for the smallholder farmers that you referring to, so their success are absolutely critical for more profitable, more inclusive and more resilient food systems in Africa. But the challenge, of course, is not all SMEs are created equal. And we also learned that, right, there are businesses that that struggle to scale. And sometimes they struggle to scale because they actually didn't want to scale. Right. Maybe their ambition was never to grow a thirty, fifty million dollar business. So that growth ambition of the entrepreneur is actually one factor driving the trajectory of the business. Um, there's also the capabilities of the of the entrepreneur and the, the businesses that they, they have built. Right. Uh, again, are we seeing that growth potential? Are we seeing that leadership potential? So, uh, and I think in the sector there is often a bias towards need versus potential. That's right. You know which businesses need your help the most. Right. And the reality is there's a lot of need out there. But potential is harder to find and harder to pinpoint. And I think one of the aha moments for, for us as well is to say, well, we got to do a better job. We got to raise our raise the bar in terms of identifying, truly identifying the high potential businesses. Um, and also making sure that they get the support they need to scale up their businesses. Right. So that was an important, uh, evolution in, uh, in, in our thinking for FS is how do we collectively raise the bar in, in looking for that potential? Building a portfolio that has higher potential and then delivering the services that are going to be most effective in unlocking that growth potential.

Mandla: Exactly. And I think one of the things that I would like our viewers to know is that, uh, together with the team at Bain, we, we came up with, uh, a term about what these high potential companies become when they grow up. And, and, and we came up with the term of calling them emerging national champions. Can you talk us through why it's important? Uh, for the Africa food system to have this national and regional champions. What difference will they make, Vikki? Should it be just help anybody and everybody and hope and pray that they become great while focused on creating emerging national champions?

Vikki: Well, I think this goes back to what I was saying about, well, the linchpins for more resilient food systems. So national champions and the definition of that from a more simplistic revenue growth perspective could be different for different countries, right? So for maybe Kenya and Nigeria, you could say, well, a company that's, you know, over fifty million dollars, it's now big enough to matter, right? Um, right. And that threshold could be a little lower for, for less developed countries. But the important thing to recognize is that if a, if a food company is able to grow to that threshold and grow in a way that's hopefully farmer allied as well, it really brings along with it a whole host of benefits, right? Most directly, if you're able to grow, you're driving the economic value creation of the local economy. You are creating more jobs for other young people, for women. Right? Who really, uh, need those jobs? Um, you are you get the scale economies. You actually are producing food more cheaply so you can provide more affordable nutrition to the growing populations in Africa and beyond. And if you're that size, you're creating bigger markets, uh, more sizable uptake commitments and demand signals for your upstream farmer suppliers, particularly smallholder farmer suppliers. Right. So you can see how they anchor more resilient food systems. When you have companies who are able to grow to become that size. And then, of course, in a more qualitative way, you know, I think, um, they also create just powerful role models for, for other entrepreneurs, particularly other agri food business entrepreneurs who see, wow, that that can be done. That's not to say it's going to be easy or that they can do it on their own. No, but I think if you create a world ultimately where, um, people in Africa and even beyond can name African food companies as easily as they name a, you know, um, MNC company, right? or company in a more developed market. Um, I think that would be very exciting for, for the younger, for the next generation of entrepreneurs.

Mandla: Fully agreed. Well, as we as we bring our conversation to a close, Vikki, you and I can talk, uh, on and on, but, uh, it's because we talk about, uh, an area that we are very passionate about and an area that we, we feel we can all contribute to. I want to ask you, as we, as we come to the end of our chat, when you look at the Africa food industry, the work that PFS and other similar organizations are looking to do in the next in the next decade, what excites you? Uh, I kind of have an idea, but I want to. I want to hear you say it.

Vikki: Okay. Well, um, I think first I'll reiterate what I just said, which is that the power of creating these national champions or emerging national champions, for the reasons that I already talked about, I think that would be very, very, uh, exciting. Um, and I think it's it would be just a great sign of the unlocking of that potential in African businesses and African talent. Right? That, that is, very exciting for all of us. I think the second thing that is exciting for, for me is, in a way, I think of what PFS is doing, and I actually have not used this term before, so I hopefully you'll, you'll like it, but I see what you're doing as democratizing best in class expertise. So we think about you know what PFS is really doing. You are you are first and foremost providing the expertise of facilitating the access to expertise, technical business, operational expertise that these businesses need to, um, need in order to grow. Right. And I'm excited about how you're expanding the way you think about your delivery models. Of course, you already have your corporate partners with hundreds, thousands of really motivated volunteers, technical volunteers, right? Business operational volunteers, who are more than ready. And we've seen so many great examples of that where they're able to help some of these businesses address the challenges that they're facing in their businesses, but in addition to really leveraging that base of corporate volunteers, you're also going to be introducing new ways of learning, right? That allow you to reach many more businesses, even some of the smaller businesses that you may not be able to do, you know, one on one projects with digital learning platforms, workshops and how you're forming partnerships, knowledge, partnerships, local business development, advisory partnerships, university partnerships to create that ecosystem of knowledge and train up talent and apprentices. I see that as just vital work that needs to be done to, to strengthen that, that broader ecosystem and perhaps the last thing that I'm really excited about is how you're going to really live up to the full potential that's in your name, right? Partners in Food Solutions. That's right. I think, you know, in this space, we often talk of partnerships, value chain partnerships, multi-stakeholder partnerships, public private philanthropy, partnerships. But what and having been in in in this work really for quite a number of years now. right? Because partnerships ultimately is what's going to be required to really transform Africa food systems. The challenges are simply too big, too complex for any one individual organization to tackle. The partnerships are perhaps easy to form, much harder to manage, and even harder to actually deliver and make work. And so I think in your next chapter of how you are taking that partnership muscle, those partnering capabilities to the next level, uh, is something I'm very excited about.

Mandla: Well, Vikki, I've truly enjoyed our conversation today. And, I really want to thank you for your partnership and generosity in how you've helped us move towards, you know, this vision of a of a food secure, uh, Africa and today for sharing, You know, unfiltered your wisdom  and that great experience that you have with our listeners today, and I hope everyone has had a rare peek into the process of creating a thoughtful strategy and direction for any organization or company, but more importantly, in a manner that delivers impact. So thank you so much for your time today.

Vikki: You're so welcome, Mandla. As always, I, I've so enjoyed our conversation and good luck with the next chapter of, uh, of PFS.

Mandla: Thank you so much. That was Vikki Tam, senior partner at Bain and Company, who has collaborated with PFS over the past decade to help us refine our focus and deepen our impact. Don't miss out on any of our conversations about the business of food in Africa by subscribing at our website. Deeply rooted blog on Apple Podcasts. Mandla Nkomo, thank you for joining us.