Kenya 2007:CASE STUDY; Grand plaudits for a poster-child of the future

CASE STUDY; Grand plaudits for a poster-child of the future
By Barney Jopson

Published: June 13 2007 10:41 | Last updated: June 13 2007 10:41

One of the country’s most prestigious public awards, the Order of the Grand Warrior of Kenya, oozes symbolism. It evokes images of steel-tipped fearlessness under the savannah sun – and definitely not the sterile interior of a well-organised call centre.

But it was for marshalling ranks of phone operators, and thus “rendering meritorious service to the nation,” that Nicholas Nesbitt was honoured last year with a glistening medal.

The 44-year-old is chief executive and co-founder of KenCall, the country’s first and biggest call centre, which has won fame and acclaim for gaining a small foothold in a global market more commonly associated with India. Its success has made Mr Nesbitt, who is half-Kenyan and half-English, the darling of progressive thinkers in the government who are trying to promote precisely the form of business development and economic diversification that he and his group personify.

From a standing start in 2003, KenCall colonised an abandoned avocado processing plant in a Nairobi industrial park, converting it into a technology hub that is today filled with rows of young people shuffling computer mice and speaking English into headsets. Its revenues this year are expected to hit $3.5m with a profit margin that Mr Nesbitt says is “barely double figures”. Former customers include the Carphone Warehouse, a UK telecoms group, and BG, the former British Gas. Mr Nesbitt is more coy about current clients, but says KenCall is selling bandwidth for a leading US internet provider, doing publicity work for a French magazine publisher, and processing data for a Wall Street credit ratings agency.

KenCall’s payroll has grown to 390 people – including 120 in training – who work in shifts that mean the lights in the building are never turned off. Watching over them is a supervisor who doubles up as a disc jockey, filling the cavernous space with music to alleviate the monotony of the work. Normally, dance tracks are streamed in from London radio stations, says Mr Nesbitt, but when the Financial Times takes a tour, Celine Dion is in full swing. (Callers are shielded from the sound by noise-cancelling microphones)

Earnings for an average KenCall employee are $350 a month and the highest-paid get between $600 and $700, which compares with about $100 at their previous jobs, according to the boss. “Imagine your salary going up 600 per cent. That’ll change your life,” Mr Nesbitt says. “You can tell who the newest people are here because they’re still not dressed great. But, after a while, the women get fancy hair-dos and shoes and the guys are wearing designer clothes.”

To create the millions of new jobs it needs to raise incomes, Kenya has to diversify its formal economy beyond its traditional staples: food, flowers and safaris. That is why forward-thinking ministers have seized enthusiastically on KenCall as a poster-child of the future. It is also why Mr Nesbitt, in addition to his gong, has been made a non-executive member of the Central Bank of Kenya board.

Staking out his hopes, Amos Kimunya, the finance minister, says Kenya is benchmarking itself to the best in the world in business process outsourcing (BPO). “We are now saying all these highly-educated graduates don’t need to go and work in America or India, they can service the best corporations in the world from Kenya,” he says.

India’s advantages, Mr Nesbitt says, are scale, branding and back office capabilities. But Kenya, he argues, has “the ease of getting people with high-quality accents, a close affinity to Britain and open-mindedness”.

English is one of Kenya’s two official languages, alongside Kiswahili, and KenCall prefers to reject applicants whose accents are not up to scratch rather than offer them coaching. “We don’t want these guys to become false. We don’t want pretenders or posers,” he says. “When you start exaggerating vowels you screw up.”

Another reason for KenCall’s popularity in government circles is that it came into being as a direct result of president Mwai Kibaki’s election victory in December 2002. At the time, Mr Nesbitt was working in distribution in Denver, Colorado, and had previously toyed with – but rejected – the idea of opening a business in Kenya. But, he says, the president’s inauguration speech, in which he pledged to rebuild a country “ravaged by years of misrule and ineptitude”, inspired him to take a chance.

Teaming up with his brother Eric and brother-in-law Stephen Liggins, he returned to Kenya and found the avocado plant in a tax-free export processing zone. EPZ officials acted as “go-to guys” on hand to sort out teething troubles and Mr Nesbitt says KenCall was spared any enticements to corruption: “We didn’t have to buy anyone anything. No lunch. No coffee. Not a whisper.”The government stood back and even granted unprecedented permission for the group to bypass the shaky phone lines of the state telecoms monopoly and set up its own (expensive) satellite link-up.

But that was more than four years ago and the flipside of KenCall’s stand-out success is the fact that Kenya – a country of 36m people – has not produced a single other company with such a compelling tale.

Peres Were, managing director of Cascade Global, a consultancy, reckons there are five other BPO businesses in Kenya with annual revenues of about $200,000, plus 10 that average $50,000 a year, as well as 15 or so start-ups that were established last year and are still looking for clients. Mr Nesbitt says one problem they all face is that potential clients do not associate Kenya with call centres. “They wake up thinking safari, beaches, corruption, Aids, malaria,” he laments. The window of opportunity for Kenya will not remain open forever. Elsewhere on the continent Egypt and South Africa have already won pieces of the English-language BPO market, and Ghana and Botswana are seeking to follow in their footsteps. A lone Grand Warrior is a captivating emblem for the sector and Kenya’s embryonic new economy. But the country needs many more from where Mr Nesbitt came from.