HELP! My Cash is Stuck at Chase!

Posted in Entrepreneurship



Dear Chris,

I am an entrepreneur who runs an SME and I was banking with Chase Bank (the only account I have by the way). My clients who had held my funds for over three months had just issued me with a payment this Monday by RTGS. I was paid KShs 2.5Million and on Tuesday I wrote a majority of my suppliers their payment checks as I had promised them and they picked them on Tuesday afternoon. Today they have called to ask for an alternative settlement now that their banks have declined to accept Chase bank checks. What should I do? How soon can I expect my funds to be available?

Management Hubris & the Shock of Capped Interest Rates, by KIRIINYA KITHINJI

Posted in Strategy & Advisory

Management Hubris, Bank Interest Rates


President Uhuru's assent to the law capping interest rates (officially known as the Banking (Amendment) Act, 2015) is the ultimate nightmare for Kenyan banks.


Nevertheless, they should have seen it coming, and I would place the blame squarely on management hubris.


The top management of the banks clearly forgot or chose to ignore the good old "P" in the PESTEL analysis tool commonly used to analyze the attractiveness or otherwise of the overall business environment.


PESTEL stands for the political, economic, social, technological, environmental and legal factors that influence the business environment either positively or negatively.


Management hubris, or excessive managerial confidence, is often accompanied by the arrogant belief that management are incapable of making mistakes.


The runaway success of the banking sector appears to have driven top bank management to addict themselves to policies or actions that led to these achievements in the past, forgetting to take into account the gradual but subtle political changes that have been taking place in the overall business environment.


As with all addictions, the illusion of control remains long after addicts have completely surrendered their wills to the sources of their addictions.


Apparently, our elitist bank management teams and their even more elitist association underestimated the determination of the incumbent government to deliver on their electoral promises. In other words, they failed to take into account the political context of the business environment.


Enduring public resentment and a consistently hostile National Assembly should have alerted top bank managers to the fact that it was only a matter of time before the political guillotine landed on their necks.


To be fair to banks, management hubris is not a preserve of the top management of the banking industry. We witness similar mindsets in entrepreneurs who fall in love with their products that are of marginal interest to the market, business owners that fail to build the robust organizational cultures and systems that will outlive them, and our greedy political class.


We may also add to the list parents who continuously pamper their children and still expect them to turn out as responsible adults, drivers who routinely retort that "the car knows its way home" when advised not to drink and drive, empire-building religious leaders, the spectacular failure of our top military commanders at El Adde in Somalia, and "life speculators" (a term that I use to describe a particular class of people who believe that they can succeed in life by sequestering matters spiritual).


With an election coming up, it's no surprise that the Jubilee Administration is keen on securing its hold on power by implementing policies that bolster its credibility as a people-sensitive government and which resonate well with a sizeable proportion of voters.


Moreover, what better way to capture the hearts of voters across the political divide than by tapping into the palpable resentment and sense of helplessness that all Kenyans feel regarding the perceived exploitation by banks? Any astute politician knows that feelings of helplessness are keenly felt when people are faced with hegemonic institutions that enjoy immense asymmetric power relationships.


Consider the sense of powerlessness (no pun intended) that the many retail customers of Kenya Power experience whenever they have to deal with the firm. They desperately need the services of the State monopoly, but they are keenly aware of the little influence they exert on their desired outcomes once their service requests are registered with the firm. The response of the Jubilee Administration to this state of affairs? Power to the people!


I suspect that it is only a matter of time before Team Jubilee takes on the Safaricom Ltd hegemony with yet another populist rallying call: Tariffs to the people!


Even Jubilee's perennial political foe, Mr. Raila Odinga took the trouble to urge the President to sign the Banking (Amendment) Act 2015, and by so doing, he may have unwittingly handed over a couple of votes to the Jubilee team, including from his backyard.

The PESTEL model is one of the many tools frequently used by banks during their credit appraisal methodologies. Judging from their current state of shock, it appears Kenyan banks use the tool only on rote basis without applying any real analysis.


In one masterstroke, the President has used his constitutional powers to sign off a law that effectively creates an even playing field for all the banks, at least concerning their loan and savings products.

If my interpretation of the law is correct, all banks are mandated to apply the same pricing model to their lending and savings products.


The upshot is that consumers of savings and loan products will be free to choose whichever bank to deal with since all such products will be priced at the same level, irrespective of bank. The only distinguishing factor will most likely be the quality of service offered by the individual banks.


This level playing field principle is not new to the country, however. The practice has been around in the petroleum retailing industry for some years.


For instance, I can count four fuel stations within a short radius from my workplace, but the price of fuel is the same. Based on this fact, my choice of where to fuel my car depends on other factors such as proximity to my office, or friendly staff, or even the level of congestion that I expect to find in any of the stations.


The new banking regime is analogous to what has been happening in the petroleum retailing industry.

In the language of strategy, the President has effectively commoditized the banks' savings and loan products.


Business strategy experts will tell you that commoditization occurs when markets sell products that are that are easily substitutable.


Product substitutability is in turn driven by (product) standardization and price transparency.

Whether intended or not, the Banking (Amendment) Act 2015 has effectively created precisely the two features that drive substitutability and by extension, commoditization.


Consumers of lending and savings products will now be able to compute loan and savings rates simply by keeping track of the movements in the Central Bank Rate (CBR).


The new interest rates capping regime will not spare lazy pensions and insurance fund managers (who invest a significant amount in bank deposits) either. Such managers will be hard put to explain to pension funds membership or life assurance policyholders why their savings cannot at least earn the equivalent of 70% of the average Central Bank Rate considered over a relevant period.


What kind of response should we expect from the banks?


Well, more hubris, perhaps?


One possible answer is that banks could engage in cartel-like behavior aimed at protecting their turf.  Fortunately for the consuming public, the anti-competition watchdog can be strengthened through additional funding or capacity building to execute its mandate in protecting bank customers.


Alternatively, members of the public who prefer the litigation route can apply for writs from the High Court to compel the watchdog to execute its legal mandate.


Another possible and potentially lethal reaction would be the relaxing of lending standards to drive the uptake of loan products (which are the banks' primary source of income). It is a well-known fact that the Global Financial Crises of 2007-2008 were primarily triggered by loose lending standards that consistently ignored the poor creditworthiness of many of the borrowers.


Another possible response would be the doubling of efforts to downsize or hire temporary staff from outsourcing companies. The problem here is that many bank staff are unionisable, and showing them the door is a complicated process involving militant positional bargaining with the banking unions. In addition, the use of outsourced services is fraught with risks such as the failure of contracted staff to assimilate into existing organizational cultures, or their lack of loyalty.


Hopefully, banks will choose the more viable geographical and product diversification strategies and continuously invest in improving the service levels across their numerous customer touch points such as banking halls, websites, mobile-based apps, agents, call centers, and even back-office operations.

Lastly, the government should take urgent steps to drive down its ravenous appetite for domestic borrowing, which is one of the drivers of the general interest rates in the economy.  


Kenyans must not be made to pay a management hubris premium on their borrowing rates arising from the economic missteps of the Jubilee Administration. And on this matter, the buck must surely stop with the President.


Mr. Kiriinya is the Director of Strategy and Advisory at Wylde International, Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it.


Are You Setting Up Your Children for Failure?, by EMMANUEL NANDOKHA

Posted in Human Capital Development

Good 1

Like many of you, I was never quite prepared to become a parent. I spent years in school learning to become a professional, spent hours in the field training to become a better player and coach at a game I loved, and then countless hours honing my skills as I worked to grow my professional expertise.

It was only after many years of being single, that I decided to get married, and when the children came, I found myself a parent, with little preparation apart from a pace setting program. My wife and I did this even before we got our first born, and later realized that that was not only premature but also very theoretical to us.

I can blame the system for teaching us to study for exams and so any studies without exams are useless, or say that learning a skill without practice is like eating ice-cream in your mind! You will never know what's real until you practically experience this phenomenon called parenting.

The Dangers of Promoting High Performers, by EMMANUEL NANDOKHA

Posted in Human Capital Development

For Tourists


Since time immemorial, institutions have often chosen those who excel at individual performance to positions of management and leadership.

This is based on the false premise that a technically competent and skilled individual, shall excel at a leadership and management role.

This has had a mixed return because people management and technical competence do not necessarily tally.

Many individual top performers have over the years been promoted consistently until they get to their highest level of incompetence then they come crashing down.

Canadian researcher Dr. Laurence J. Peter (1910-90) in his 1969 satirical book 'The Peter Principle.' Said that in a hierarchical institution, individuals are continually promoted until they reach their highest level of incompetence after which they stop rising . The organization is therefore at different levels staffed by people who are yet to reach their highest level of incompetence. This theory has never been subjected to any rigorous research but some interesting thoughts to support this are coming up.

Google, a company that prides itself in being a firm that makes its strategic decisions based on facts, has some interesting facts to support the fallacy of promoting high performers to positions of responsibility.

It surveyed over 10,000 managers and their performance reviews and found that of the 8 traits that make effective managers , technical expertise ranks last .

Based on the list of importance are the following traits

  1. Be a good coach;

  2. Empower your team and don't micromanage;

  3. Express interest in employee's success and well-being;

  4. Be productive and results-oriented;

  5. Be a good communicator and listen to your team;

  6. Help your employees with career development;

  7. Have a clear vision and strategy for the team; and

  8. Have key technical skills, so you can help advise the team.

This ties in to what Daniel Goleman proposes in his research and writing on emotional intelligence and primal leadership. He states that emotionally intelligent individuals work better and lead better that those who are emotionally unintelligent.

Ram Charam in his book “The Leadership Pipeline” poses that as people transition from being individual contributors to team leaders, then to higher levels where they run or manage divisions (other leaders) and eventually lead the enterprise , technical expertise becomes less important than the other softer aspects like emotional intelligence, social skills and strategic skills .

This means that individual high performers who are unable to transition shall continue doing what made them successful initially but not be able to transition effectively to the required behavior needed for the next level.

So what can you do to ensure that the Peter Principle does not apply to your organization?

  1. Rethink your promotion criteria

  2. Develop an internal leadership competency framework that suits your firm/industry

  3. Use the framework to evaluate and develop your potential leaders.

  4. Develop a corporate culture that supports your strategic objectives that the team leaders can exemplify

  5. Set up a 360 degree monitoring system that allows you to evaluate your managers holistically


The writer is Emmanuel Nandokha, Director of Human Capital Development at Wylde International, a firm that helps individuals and firms attain global stature. He has done a lot of work with diverse team of managers across the region over the last 10 years

For more information contact or help making this a reality him on This e-mail address is being protected from spambots. You need JavaScript enabled to view it. or call Esther of Wylde on +254-706688350




Are You Amongst The Living Dead?, by EMMANUEL NANDOKHA

Posted in Human Capital Development

Dead Woodland

Are you among the many people walking around today thinking they are alive but are actually dead?

Are you living a lie where the number one fool is you?

We were all born with a zest for life, to learn, to experience, to discover to become something and when we were young didn't we live out our youngest years with abandon.

I remember seeing how my nephew exemplified this when he first went to the pool with his dad and me on a family holiday. He didn't know how to swim but knew that he wanted to get into the water very fast so without a care or concern he flung himself into the pool as his dad dashed to catch him.

That is living life to the full.