Advice from a CEO – Boubacar Kane

Boubacar Kane

Mr. Boubacar Kane is an experienced Chief Executive Officer with a long history working in the civil engineering industry. Currently he is the General Director for SOMAGEP-SA, the National Water Management Company of Mali. In this position his duties include general direction of the Company; chairing the Management Committee and management review of the Company; defining the Company’s Quality Policy; and setting objectives and key performance indicators for senior management. Prior to his work with SOMAGEP-SA he was with the Mali National Electric & Water Co as Director of Water. We are honoured to have the opportunity to interview him on the subject of utility finance and we know you will appreciate his insight.

The following questions were discussed:

  1. How can a utility invoke a major mind shift, from thinking like a traditional public utility to becoming more of a privatized/corporate entity that fully covers its expenses?
  2. Do you think it is necessary to get assistance from the private sector to facilitate the above transformations, as we saw with the National Water Supply and Sewerage Company having brought in Dr. Muhaire to help turn around the utility?
  3. How can senior management hold staff accountable even when their salaries are low, their payments irregular and perhaps they have insufficient resources fulfil their duties?
  4. Why should senior management have a strong quality policy and put that policy to practice?
  5. What would the ramifications be for a utility, or personnel of a utility that doesn’t place an emphasis on quality?
  6. Can you mention methods or tips to increase the performance of executive members through objectives, indicators and accountability?
  7. Do you let senior managers set their own objectives with your approval or do you set the objectives for them?
  8. Are reviews conducted at the end of the year or do you incrementally review your managers progress to assess whether there is a need to make midcourse adjustments?
  9. What advice would you give to the senior management of a struggling utility to improve their performance?
1. How can a utility invoke a major mind shift, from thinking like a traditional public utility to becoming more of a privatized/corporate entity that fully covers its expenses?

The utility must have a vision and be aware of what its core mission is; then, when that has been established, the organisation can build its strategic plan on how to go from point A (where it is today) to point B (where it wants to be). There must be clear objectives set in place; and for the utility to benchmark itself with the best practices within the region and/or the world. An obvious objective is, within a 15-year time span, going from an underperforming utility to one that is corporatized or bankable.

Transformation requires involving all stakeholders such as regulatory authorities, consumers, partners, etc. All must be involved and with a clear understanding of the objectives that have been set.

Often, these objectives require supportive national regulations. In our countries in Africa we often don’t have strong, sound regulations. It’s imperative to have an autonomous or independent regulating agency. If all embrace this, then at least you have a foundation for your utility to go forward and be successful.

You also have to “put staff in front of their responsibilities”. Once you do that, there are effective tools that you can use such as ISO quality processes, setting clear objectives and checks and balances. Of course, periodic performance measurement is critical along with staff reviews. This is where some form of reward is provided for good performance and corrective action for poor performance.

Next, employees must feel valuable and involved with the utility and its policies. Performance cannot all be on the shoulders of management. It must involve the entire staff. You need leadership and team building. Everybody from top to bottom needs to be interested and invested. They will have to be engaged and have an enterprise spirit. Also, utilising training sensitization to encourage workers to be cognisant of their responsibilities is an effective approach.

We have to ask the hard questions: “are we optimizing our human resources, do we have enough qualified staff, and do we offer the right training?”. Maybe we have staff engaged in their contractual responsibilities but without the requisite background and experience. Maybe they are not even aware of the tasks for which they are responsible. All this must be captured or charted/documented. Each position must have a clearly identified job description which is regularly evaluated. It’s important to evaluate qualifications of an individual against his or her duties. Are these aligned? Often, they won’t be and therefore adjustments will be required for the overall organization to function.

2. Do you think it is necessary to get assistance from the private sector to facilitate the above transformations, as we saw with the National Water Supply and Sewerage Company having brought in Dr. Muhaire to help turn around the utility?

Outside input and perspectives are valuable, such as having someone who is not accustomed/conformed to the past and current behaviours of the utility. Influence from the private sector can bring to light the difficulties and the obstacles utilities are facing, as well as encourage a different (private style) management. Civil servant type of management employed by many utilities involves unions that, sometimes, could be obstacles to change. In these incidences will be a challenge to discharge poor performers as the union will be at their defence despite fair reasons of dismissal.

Therefore, assistance from the private sector is beneficial to bringing about a change in the mentality of the utility and its management style. We at EDM (Energie de Malian) had that in 2000 with a private French company. Even though it didn’t work out due to contract and financial issues, it did, however, change EDM’s management style and we received ISO certification, which lead to the improved performances of our utility.

3. How can senior management hold staff accountable even when their salaries are low, their payments irregular and perhaps they have insufficient resources fulfil their duties?

Staff should be mindful that in order to acquire a decent salary and regular/timely payment they must perform and carry out their responsibilities. The message that an improved situation for them is possible must be conveyed. They must recognise the importance of remaining accountable to their contractual scope of work even if they are not receiving their salary on time. And, if they do not perform well under these (less than ideal) circumstances, it certainly does not enhance their situation in the future. They need to project and look towards the future and not always just today. They are a key players in the company and if they continue to perform poorly nothing will change. Whether the check is regular or not, staff are responsible for their performance and results.

Also, a merit-based incentive system can be built where, on top of the base salary, if an employee has produced outstanding work, it will be documented, and lead to additional remuneration. Also, if others see that in performing well there are rewards, then they will follow suit.

4. Why should senior management have a strong quality policy and put that policy to practice?

It all begins with executives basically leading by example; and when this is done it naturally flows to other employees. Remember, employees look up to senior management. So, if senior management does not demonstrate quality, then other staff will also follow this (poor) example. Even smaller examples such as arriving late and leaving early – staff sees this and will copy management’s behaviour.

5. What would the ramifications be for a utility, or personnel of a utility that doesn’t place an emphasis on quality?

Firstly, there would be a lack of respect from the customers who are the main target. And then from partners, which would result in a decline of bill connections. And, if bill connections decrease, the utilities financial status will deteriorate. Consequently, wages cannot be paid, leading to the demotivation of all the employees and the downfall of the utility. You see how it all cascades. In terms of the sustainability of the utility itself, consumers are not inclined to pay for inadequate service – further leading to a weak financial position where the utility cannot sustain itself.

6. Can you mention methods or tips to increase the performance of executive members through objectives, indicators and accountability?

We have what we call a Letter of Quality Policy that the CEO signs annually as a part of our ISO management system. It outlines the main strategic objective of the utility. All managers have their own targets based on what has been achieved the previous year and what they aim to accomplish the next year. Then at the end of the year, the senior staff is evaluated according to those objectives. If goals haven’t been met, then the manager must give the reason(s) why.

If enough resources to meet objectives were not provided, then senior management and the CEO will acknowledge that. However, if ample resources were given and the goals were still not reached, then that is noted as minus in the evaluation. On the contrary, when a manager attains his objectives and has gone beyond the targets, he receives a bonus, which could be translated into an incentive in his salary package.

This is a technique to hold senior management’s focus and make sure they are working towards the objectives. Senior managers, in turn, will set targets to their mid-level Managers. And this process continues down to all employees.

For example, the sales department will be responsible for rate of arrears recovery and the distribution department for the non-revenue water.

In doing this type of target setting and regularly monitoring progress and change, senior staff is kept focused on their duties.

7. Do you let senior managers set their own objectives with your approval or do you set the objectives for them?

I have a meeting with them where I set their objectives. I would explain what I expect from them. After an exchange in which they are able to express whether they feel the goals are attainable or not, the objectives are set.

We have what we call a management review each year during which an analysis of all the objectives is conducted. We deliberate on the objectives thoroughly and before the end of January everything is finalised and validated.

8. Are reviews conducted at the end of the year or do you incrementally review your managers progress to assess whether there is a need to make midcourse adjustments?

Yes, we call that the “dashboard” of the Company. At the end of each month there is a report on our objectives (posted on this dashboard) that includes all senior management. The review is done with the Department of Quality – which is responsible for administering the dashboard. They conduct the process review along with all upper-level management throughout the year. The final assessment of objectives is done in the annual review at year’s end.

9.What advice would you give to the senior management of a struggling utility to improve their performance?

The first question to ask: is corporate governance working well? If this one aspect does not function well, everything else will “fall down”. They would also need to look at the financial sustainability of the utility. All the technical things may be done, but if the financial model is not working, success will elude the utility.

Then, I would recommend an evaluation of the operating efficiency to check if the utility is functioning well and how it is managing its infrastructure. Questions would need to be asked such as is leak detection being regularly performed or what is the level of knowledge/capacity within the utility? Also, you can look at aspects such as the environmental sustainability, investments; and procurement – are we buying well or are we wasting money? Are we optimizing our resources? And, in African countries are we neglecting the role of women? Are we giving them sufficient opportunities and not discriminating?