Phillips Consulting, a world-class human resource and management consulting company with headquarters in Lagos and Johannesburg, marked its 20th anniversary last week. In the euphoria of the celebration, Executive Chairman of the group, Mr. Foluso Phillips, who is also the Chairman of the Nigerian Economic Summit Group, took time out for an interview with Festus Akanbi and Raheem Akingbolu, during which he reminisced on the years gone by, the company and his choice of profession...
What was your dream at the time you conceived and implemented the idea that gave birth to Phillip Consulting 20 years ago?
When I think back about how I set up Phillips Consulting, people around me must have felt that there was something wrong with me because I seemed to be doing just fine where I was at SCOA. There is a bit of a story I have to tell about this. I had worked as a consultant in Coopers and Lybrand in the UK for about five or six years before joining SCOA and prior to that I had worked in Pfizer’s Livestock Feeds Business as the Financial Controller and Company Secretary. Whilst in Pfizer, we had country performance review teams that used to come from the United States, precisely from The Pfizer Head Office in New York. Their assignment was to review our accounts and operational activities; challenging our processes and our results. Though these were very young chaps, we were always amazed at their level of intelligence, speed of thinking and approach to solving problems. I was curious to know how come they were that brilliant and we got talking and found out most of them had studied for their Masters in Business Administration. I immediately made up my mind that I would do an MBA too, obviously to be able to match such people in intellect and sharpness in thinking. I had an uncle, who I often discussed my work with, unfortunately he is late now. We got talking one day and I expressed this desire to study for an MBA and he asked why I would spend my precious time studying for an MBA despite the fact that I was comfortable where I was at Pfizer as a financial controller at the age of 26. Let me add that I have always been a fast tracker, I qualified as an accountant at age 22 after my degree in Industrial Economics, and was doing pretty well. There and then my uncle said I shouldn’t bother to do an MBA but rather think of being a management consultant. He argued that people who study for an MBA spend their precious time studying and analysing case studies, whilst as a consultant, you end up creating the case studies. With that, I made up my mind I wanted to go into this consulting thing. I approached Coopers and Lybrand to work in the firm’s consulting practice abroad. As fate would have it, one of the firm’s senior guys happened to be in the country not long my application and they invited me for an interview. That interview in itself was funny. There is in the feeds business, what is called least cost formulation and this guy asked me about the major activity I was involved in at Pfizer as a financial controller and I said costing, he again asked me what area of costing I found most interesting and I told him about this continuous calculation of least cost formulation for the feed meal products we sold and he pressed further to give an example of the process for calculating this optimum mix of ingredients for different animal feeds. As I was just getting to explain to him, he just said okay, okay, thank you very much…. Bye - bye, I’m done, the interview was over. Literally 7 minutes. Thereafter, they offered me a job and took me abroad and as they say, the rest is history!!
It’s ironic that when I got that Pfizer job as literally an expatriate, it was a celebration within the family that I had landed a fantastic job. As a result of that euphoria and what they thought the job would offer me, they were shocked when I dropped it and headed out again. Meanwhile, my movement was not because I was not enjoying my job or making progress but I was simply looking for opportunities and avenues to up my skills even more. Today, I am still doing that MBA because in a consulting firm, you are living and writing those case studies everyday. Through consulting, you mix and rub minds with people who are intellectually charged enough to give solutions to other people’s problems.
What was your experience at Coopers and Lybrand?
My first assignment at Coopers was with the London Electricity Board. We had to look at their processes and procedures specifically for billing and collection. I remember feeling challenged because I could not find anything wrong with what they were doing. However, when we applied some process efficiency tests and started to question their operating procedures, I realized that there was a method to everything. Thereafter it was a piece of cake. I had great consulting assignments in the UK and most of the rest of Europe, and consulted even in East and West African countries, including Nigeria. While at Coopers, I was invited to chat with SCOA, which needed someone to head their finance section in Nigeria. I flew in, had an interview, held a negotiation meeting and they offered me a job as their General Manager Finance for the SCOA Group. I guess, once you are a consultant, you can never adopt a 9-5 attitude anymore, you are permanently in the mood of questioning things, you analyse and end up interfering with everything – way beyond your official remit. My time at SCOA was a lot shorter than I thought it would be, but it became less interesting with SCOA concentrating more and more on its trading than manufacturing activities. I thought it was an opportunity to go straight into full time consulting. The terrain was not strange to me; I knew what had to be done and understood processes and how to improve them. Remember, this was 1992. I had a number of friends who encouraged me. It is good to be appreciated because a lot of people encouraged me at the initial stage. In retrospect, at that time in the life of Nigeria, there was a change going on between 1990 and 92. In 1990 through to 1991, the era of new generation banks began, Guarantee Trust bank was formed around 1990, two years before I finally opened my office, IBTC had been formed a couple of years before, Oceanic Bank was new, Chartered Bank also was in its early years, Zenith and many other banks that are no longer in existence today. Remember that at a time we had 102 banks. Most of them created fantastic opportunities for consulting services. These new generation guys assured us that there was no more “tally number” system and that a new paradigm shift was taking place in the banking industry. The likes of Fola Adeola, Jim Ovia, Ayo Olagundoye, Shamsudeen Usman and many more, were infusing new ideas into the concept of commercial and merchant banking. They were redefining relationships with customers and truly making him king. Our coming as Phillips Consulting was timely too, we were on time to offer necessary and relevant services, we provided customer service orientation, customer service training, process improvement, Total Quality Management. All were new ideas, which were in short supply as at then. The old banks were not efficient in customer service. We started with quality service management and process improvement. We introduced the concept of total quality management. The Banks redefined the terrain, they redefined a whole new work culture, and they brought in a new generation of corporate leaders. I think another thing that helped us at Phillips Consulting was that from the first day, we made Anderson Consulting our benchmark. And people wondered how we, a very small local indigenous firm could be trying to compete with a global brand that had huge human and capital resources and global exposure and backing. Without sounding immodest, after about two or three years, we began to compete favourably with Anderson Consulting and others in the market. We became like a mosquito buzzing in their ears, being an irritant and giving them uncomfortable nights. We began to bid together and did get some job and lost some too. There have been times when clients did not bother with a bidding process and just gave us the job…. let us just go for Phillips Consulting!
Though in size, we were small but our approach was fantastic. I started with just four staff.
Looking at your profile, we observed you parade an array of blue chip companies in the banking, oil and gas and even manufacturing sectors as clients, can you recollect at what stage you had the breakthrough?
It is difficult to specifically say at what point we had the breakthrough because I’m not sure we have gotten the true breakthrough yet. Sure I didn’t know when it happened. I often joke that there was a time we found it tough to pay salaries. At the beginning, may be the total salary of the four of us working was just about N300, 000 per month. At times, there was no salary to pay, we just shared what ever money was available based on seniority and personal circumstance. The married men got priority. The single guys got the lowest priority. One of my long serving staff joked one day and said when we started, we struggled to pay salary, now we still struggle, and I said think of what we were paying then and the millions we are paying now. Surely we have grown.
Your clientele base cut across many sectors, what is the magic?
One thing in the consulting industry is that people move and they move in some cases with the knowledge of your capabilities, they move with the consulting firm that has helped them in getting the job done where they previously worked. It will not be difficult therefore to recommend such firm to their new employer. As a result of that, we have worked with some people in the banking sector and when they move to oil and gas industry, they recommend us. When they moved from one bank they moved Phillips with them. Having said that, in terms of building a brand, in terms of building an organisation, I think we have worked hard. We really worked hard in ensuring we provided top - notch world class consulting services. We were successful at this without a doubt. Today we partner with the Global firm of Mckinsey as their local content partner.
E- BUSINESS DESIGN AND IMPLEMENTATION CLASS AT PHILLIPS CONSULTING LAGOS 8-12 October 2012
Having come this far in the past 20 years, what will you describe as major challenges you have faced?
The most difficult one at the initial stage was getting people to believe you can do the job. Many a time, you meet people who doubt if you could do the job. And come to think of it, I recruit the same quality of people KPMG or Accenture recruit but when it is time to quote and you tell them your fee, they question you. When they approach you and you tell them you are charging N100, they ask why you are charging that much when KPMG is charging N120. They tell you they would rather go to the big boys instead of paying that much to you. But the quality is the same. If I charge N30 when somebody else charges N150 for the same service, you should question my quality of work. How do you want us to give you high quality service when you only want to pay peanuts? Yet when the larger and more established firms turn up, you happily pay them what they ask for. They end up with more money to train, more money to recruit good people, more money to equip themselves. In the mean time we struggle to compete, when the local clients here have removed the platform for competition with the fee they are prepared to pay. It has not been easy. The most painful part has been when the so-called big boys started to poach my guys as a specific strategy. On a lighter mood, at a particular time, I had to approach one of our competitors and asked, why they were stealing my guys and he fired back and said “tell us how you train your guys and we will stop taking them away from you”. We trained our guys better with respect to approach to issues; we trained them to be creative and be analytical. We don’t do cut and paste or probably repeat verbatim something that was done in Mexico or France. We go to our war room and brainstorm; you discover that guys are thinking daily.
This idea of not appreciating our own local firms is however not affecting consulting alone but other areas in our system. Even at the lowest level, an electrician in the building industry will charge you so much and you will refuse to pay and a foreign electrician turns up and you pay him even more for the same job. Why wouldn’t the foreign guy be more successful? Of course he will have an edge over the local guy, he will perform better as he will have access to better resources, he will be able to order for equipment abroad and make use of the best there is. Everyone says you are not international, you are not global. How do you want me to be global or become an international brand when I don’t get equal support and encouragement the foreign firms get? Granted, at Phillips we thankfully have gone past all that, but it was a tough process all the same and I sympathise with everyone that is still caught in that phase.
As a local firm competing with global brands, do you have any advantage over the foreign ones based on your understanding of the market?
Our strong interaction with our local people makes us understand their nuances. Fortunately for us, because we work significantly in human resources, because our consultants engage in change management work, reorientation of people, getting people to work in a different way, getting people to think differently, influencing their attitude and understanding their behaviour, we have to interact a lot with them. But don’t forget that in these international firms too, they have Nigerians working with them, who understand the market the way we do. But sincerely, the advantage and what gives us an edge is that we have more interesting tools to use, much more interesting method of diagnosing problems, much more interesting training techniques which sometime make us different. Another thing that works for us is that we are probably one of the first truly HR focused, people and systems focused type of consulting firm around. Training is part of our service delivery. If I come to your organisation and want you to do some things differently, I have to train you to change. We have been extremely effective in this area.
How do you intend to handle challenges associated with succession in a privately-owned organisation like Phillips Consulting?
Retention is creating a new challenge for succession. In an organisation, you literally set poles that lead to the top for people to climb, and you think that when someone climbs a particular pole, you have established a succession plan in that direction. When another one climbs another pole, you record another succession possibility but in most cases it doesn’t work because successful organisations often turn out to be the victim of their own success. You discover that in some cases when you think you have somebody way up that pole, they slip down when they decide to leave the firm and you start the process all over again. So you need many people climbing up that pole at the same time. Most of the guys who have left, set up their own firms , even if it is a one man shop, or move to another firm or organisation. I have witnessed several cases like that but let me quickly add that there have been times when some of them have a rethink after experiencing the toughness of the outside world and come back. I do take them back because it is my policy that if you leave here voluntarily without being fired, you are welcomed back. I do this, because experience over the years has made me realise that such a person works harder and puts in his or her best, having experienced both sides of the coin. One of my guys when leaving looked back and said “FOP,” as they fondly call me, “I may still come back” and I quickly assured him that he would always be welcomed. Let me share an experience, one Christmas, I cannot recollect the exact year, four guys resigned one after the other within 3 days of each other – what a Xmas present. It was as if they were waiting for themselves by the door because the other came in the moment the first one left and so on. In fact the fourth person had to come to meet me at home at the weekend to tell me literally like others that he was leaving. Before he came through the door from his car, I told my wife he was coming in to tell me he was resigning and that was what happened. At the initial stage I used to get very worried but over time, I would even be the person to counsel them. Oh! you are going, have you done this and have you considered that? If you are starting something on your own please do it well and if you are working for an organisation, work in a way that people will be impressed that you passed through Phillip Consulting, obviously because I know it is a name they will always use to market their competence. At times, I tell them if you are going to work for a company make sure you give us work and be a good ambassador. Today, I celebrate them out there because it is something that I’m always proud of. At our alumni dinner, we recorded over a hundred people who are members of the family.
But sincerely, the succession issue is a big challenge in most organisations but we just have to carry on. It goes on to the plan for the future, for me I have come to appreciate the fact that one has got to be much more strategic. I might not be able to sustain a revolutionary growth; I might have to get to a situation where one will begin to acquire other firms. I will love to get to a stage, where we look at this country and beckon on some good people in some good firms to come and join us. We will tell them we have gotten a good brand and we want them on board. We can make any kind of arrangement; you can run your own business within the fold of Phillip Consulting. I’m imagining a time when I will go out and fish out about three to five upcoming firms that are doing well, and tell them to come join us. We will offer them our strong brand and will double our size overnight. Under such arrangement, we will bring in people who have specialised in various fields and before you know it, the whole firm will explode and become a stronger institution. With that system we would have successfully created several strategic business units within the firm.
One major issue in the work place these days is the quality of graduates of tertiary institutions in Nigeria looking for jobs. What is wrong with our system?
Let us be honest, we owe our young people an apology because our generation has destroyed their careers and future. We proudly come up today to celebrate who we are and forget how our parents toiled to give us what they did. I went to Igbobi College and we praise the feat we attained in these schools of the past. You see, a lot of us today talking with pride about the experience we had in boarding schools, growing up and sharing other experiences. Don’t let us deceive ourselves, there is no exception, we are all guilty. Our generation owes the current generation an apology because we have wrecked the educational institutions. I cannot forget the quality of what we got in terms of training way back in school, which the missionaries put in place. Today, that has gone, we have spoilt it and now we are blaming the kids, without considering our contribution. Quite a number of us who attended Igbobi College are thinking of how to salvage the school. What we can do to right the wrong is for all of us to be more committed, we’ve got to fix our system and we’ve got to overhaul the educational system in particular.
From your experience, how can you describe the attitude of employers of labour in Nigeria to training?
A man who does not train himself will not train anybody else. Secondly, organisations that appreciate what competition is, organisations that realise what differentiates them from others realize that they have to train their people. For you to be different, you have to invest in training. Organisations that are smart just have to train and if they don’t, they pay the price. Organisations that are going to mature have to train. It is not enough for some organisations to think that if they train staff, they will eventually leave. If you train 12 people and five leave, you are definitely going to replace them with some other people that were trained elsewhere. There is a higher calling on organisations to train for the economic and social system we have today. We all have to find a way to contribute to our society. Training for the national pool is one way. When you train, you don’t stop at that, you still must provide a conducive environment for your staff to work in. You must appreciate that sometimes, the future we plan for our staff, might not align with what is important to them and no matter how hard we try, they must move on. The key is to ensure there is mutual benefit to both the firm and employees, so that when it is time to part ways, each has given value to the other.
As the chairman of the Nigerian Economic Summit Group, how will you explain the current challenges in Nigeria’s economy 52 years after independence?
First, we have to be conscious of the fact that we are not independent of the whole world, we operate within the same global system, and more so because we produce oil that is a very fundamentally important commodity. A commodity that our lives depend on and yet it is exposed to the vagracies of a commodity driven economy. Its price can go up or come down because it is not a monopoly, we don’t have control over it. It has been said over and over that oil is like a curse for this country. I believe that our life as a nation would have been better off if we didn’t have oil because before the oil boom we thrived successfully as a major agriculture producer. We were on the path of glory There is something we call competence, we say a country has a national competence and the national competence translates to corporate competence, down to individual competence. The national competence of Nigeria way back in the late 50s and early 60s was agriculture. I say national because it involved everybody. That was what we were nationally competent to do. Our banks then thrived on it, National Bank and Wema Bank supported cocoa, and Bank of the North supported grains, New Nigerian Bank in the eastern part of the country focused on oil palm. That is to say our banking system also had strong links with agriculture. Even the railway supported agriculture on transportation. Then, we were moving to the next stage of the value chain by supporting agricultural output with industrial estates; Agbara Industrial Estate, Ikeja Industrial Estate, Government Reservation Areas in all parts of the country. It occurred to the leaders then that if we were to build these structures we would need cement and so they came up with the idea of establishing a cement factory. The industrial estates were adding value to our raw materials. And you remember recently, Dangote said we should start building concrete roads because he knows we have the cement to do it. At that time too, we were proud of our agricultural Institutes like IITA Ibadan and another one in Rivers State. We were then moving to the next stage of industrialisation when you get the raw material from the farms and the manufacturing company to use it is just around the corner. Then, Dunlop and Michelin were doing well because they had rubber plantations in abundance to feed their factories, Cadbury needed not to go far before getting cocoa. Again, I remember then that at the University of Ibadan, when you are admitted for Agricultural Economics, Agriculture Engineering or other Agricultural related courses you would be celebrated as a smart guy because it was considered competitive and attractive.
Then suddenly oil turned up and we began to ask why we were bothering with farming and related things. It would have been a different story if we had used the revenue from oil and pumped it into agriculture, manufacturing and other things we were investing in before oil turned up. If that happened, we will not be where we are now. I read a book by Awolowo, where he spoke about the need to build industrial estates, Government Residential Areas and how we were going to need cement - so let us build cement factories. The point I’m raising is that we’ve got to think of how we can go back to those things that offer us our true competitive advantage. I don’t believe oil production can employ more than a million people, directly or indirectly. It generates a lot of revenue but we should take that revenue, every penny from that oil revenue must go into capital expenditure. If you want to earn money to run government, earn it from taxes and your fiscal means and let it support the size of government that it can cover. So, I cannot have a ministry or a government department that exceeds my ability to fund government from the level of economic activity of the country. The money from oil, I would want to use for infrastructure development, which will help to support and grow our industrial sector, which will allow government to tax and earn revenue from a thriving society they have created and so be able to fund government to provide the regulatory framework and all such things that must be done to run the system. How do we turn things round? There is only one performance indicator for any leader in their country and its about jobs. That is why you hear Obama struggling and scrambling every time about knowing quarterly job figures, what is the number of jobs created in each quarter, how many people have we employed, is it 250, is it 300 and so on? The truth is that jobs determine the health of a country; it determines the state in which a country is moving, forward or not moving forward. For everybody that has a job there is a family that has to be fed. And that is money that can be recycled back into the system. So the wealth creation of any government has to do with the creation of jobs. If you are to give everybody a 100 naira every month and they do nothing to earn it. Then, we end up being an import-driven country. The more naira we get given but not earn because nobody is producing anything but collect rent from oil, the more our import bill goes up. Nobody is producing the things that people should be spending their money to buy. But if we are all employed and therefor producing, we will all be earning money to buy what we have produced and not have to import and pressurize our fx rates, then we become more flexible in our choices of both imports and exports. It seems like a simplistic solution but it is the reality –the rest is just fine details.