James Mwangi – Equity Bank CEO – Managing Generation Y – Leading a young workforce

Equity Bank is one of the fastest growing banks in East Africa with an average employee age of 26. Dr. James Mwangi spoke to CAROLE KIMUTAI about leadership, management, and inspiring Generation Y, and how he has re-invented himself.
In many ways, Dr. James Mwangi is synonymous to Equity Bank. His association with Equity began in 1992, when a founder (who was also Mwangi’s family friend) urged him to deposit his savings in the struggling Equity Building Society (EBS). Two years later, the Central Bank of Kenya found EBS technically insolvent with poor management and inadequate board supervision. To avoid dissolution, the bank officials decided to overhaul the firm’s strategy and operations.
With several years experience earned while working for Ernst & Young and Trade Bank, Mwangi joined EBS in 1994 as the Finance Director and Change Agent, and worked his way up to become CEO in 2004. During his tenure, Equity Bank has undergone massive transformation growing from a small, insolvent mortgage lending company, to a fast growing internationally recognised bank.
Mwangi says it has taken a lot of sweat and blood to build Equity Bank to its current state. “It has not been easy but we have stayed focused on our vision,” he says during a meeting at his Upper Hill office. The hard work has paid off handsomely and the bank has received various local and international accolades, and universities like Stanford Graduate School of Business, Columbia Business School, and Lagos Business School have done case studies on Equity.
HOW TO GROW LEADERS
Looking back, Mwangi has learnt many lessons over the years. One of them is managing the growth of a rapidly growing organisation. Growth, he says is important for a company because it is what creates sustainability to a great extent.
“Any leader who focuses on a growing company realises that the legacy of that company is dependant on those he/she nurtures and mentors to take the company forward. Those are the people who define the leaders’ legacy.”
Mwangi has spent the last 18 years coaching and mentoring, and developing leadership at the bank. “I have the greatest concentration of leadership skills in Africa and that is the skill that has enabled Equity to be what it is today. As you have seen, there are no interruptions of calls or any papers to be signed. I am a leader who delegates; you do not train, coach and mentor leadership in abstract, you delegate. You give responsibility but hold those you delegate to accountable. You seek dialogue with them so that they can learn,” he says and adds that a leader must be good in giving regular feedback.
The second key to creating leaders in an organisation is creating an enabling environment that attracts great leaders. “It is not about position but responsibility – an environment that allows you to thrive – where you give people an opportunity to become what they could ever be, an environment where you are able to inspire your people to give them the energy to be able to report to work everyday. The hallmark of such an environment is fairness and justice where all people are treated the same way and where human dignity is most respected,” explains Mwangi.
He says a leader must build an organisational culture where people feel valued, and feel that they have been given an opportunity to thrive – a culture that enables them to make a contribution.
Thirdly, Mwangi says a leader must create a purpose larger than making money. “For Equity what we do is more of a calling; it is a mission to socio-economic transformation for Africa. People do not report here to do banking. They come to further a higher calling where they see the African people given dignity and an opportunity to transform Africa to become a better continent. Every day somebody feels they have made Africa better. They feel they have given a few more people an opportunity to say goodbye to poverty. If everyday you feel you have touched a few more lives, then you are living a purposeful life!”
MANAGING GENERATION Y
Sixty per cent of the Kenyan population comprises the youth (18 to 40 years) many of whom are in the workplace. “This is a very unique generation. At Equity, the average age is 26 so I would say the whole bank is literally Generation Y.” This generation Mwangi says, are people who feel they require freedom and dignity. “They are not going to be stereotyped. They want to understand why they do things; they don’t just want to do things. They feel they want the freedom to do it when they want, and how they want.”
Mwangi uses management by objective to manage Generation Y. “I tell them this is what I want to achieve. We talk about results as opposed to the how because anytime you talk about the how, there is conflict. They do not understand why things have to be done the way they have always been done.” Mwangi says because of Generation Y as the majority, the bank has made massive investments in Information Communication and Technology (ICT).
“That generation hates manual labour that is why we no longer have youth farming. Even if they are in the rural areas, they would rather spend the day at the shopping centre and not with a hoe. You have to give them work that connects with what they think they are. They are a dot com generation – ICT natives.”
At the bank Mwangi confesses, Generation Y views him as a migrant, “It is like I migrated to their native land of ICT,” he says and cautions that if one cannot connect with them in their ‘native’ world, he/she cannot provide them leadership.
He notes that an organisation must provide them with adequate tools otherwise it will be difficult to retain them because they hate paper work. “For our appraisals, we had to build a very powerful enterprise system. Why? Because they want to assess themselves; they tell you who they think they are, and you tell them why you think they are not. It is not the old way of calling somebody and dressing them down in the name of an appraisal. They want to participate in everything; they want to define relationships it is not you to define the relationship. Therefore, that aspect of understanding and accommodation as a leader is very important. Any leader who is not able to transform will not be successful with the Generation Y.”
The youth are a big asset explains Mwangi. In an era of globalisation, Kenya naturally connects with the world because of Y Generation; with an aging population in Europe and the Americas, this means Kenyans are global citizens and can fit anywhere. “I look at my children they no longer take tea in the morning instead they opt for juice. I have to accommodate that. So I also ask in the bank, do they require tea? What do they want? Those amenities that drive them must be made available.”
A third factor is providing a good working environment. He says Generation Y want to do something remarkable. “I cannot say I drive innovation at Equity Bank but I drive the environment that allows them to be innovative. They seem to understand the environment very differently from the old generation and as a leader, you need to manage that conflict. I will give you a classic example at Equity – they (Generation Y) do not understand why they cannot come to the office in jeans yet my aged customers in the rural areas cannot understand how they can be served by a cashier who is not in a tie or a skirt suit. The issue is to manage that conflict. Keep on accommodating and explaining ‘the why’ to them.” This according to Mwangi, is one of the biggest challenges when it comes to managing Generation Y.
RE-INVENT OR PERISH
Mwangi has a word of advice for older managers supervising Generation Y -take your domestic environment to your office. “We have lost control in telling our children what to do, and they instead tell us what they want. You must know that is the same environment in the office – you must interact, and seek to understand them.”
He says older mangers should provide leadership instead of being harsh. “Give them leadership so that they are able to access you. At Equity, the General Managers who are calling the shots are between 28 and 32 years – they report directly to me. Generation Y will not report through another person who then becomes a buffer; they must be able to come to me and present their point.
A 23 year old will not stand a 48 year old leader. They want a 28 – 32year old leader – the whole chain must be in such a way that it connects – a 24year old is able to connect with a 28year old as his General Manager, a 28year old is able to connect with a 35year old as his Director, and the 35year old is able to connect with me at 45. You must be conscious of the age factor. There is no way a 24year old will connect with a 45year old. They see the world differently. While you condemn them, they wonder where you are coming from.”
To stay relevant, Mwangi says the older manager needs to re-invent him/ herself. “I have almost re-invented myself
- I may not be a techie in IT but there is no language they can say that I do not understand. I will read extensively. Secondly, I must create a value proposition for myself and give them reason to respect and value me. That is what I mean by re-inventing.”
Mwangi says if Generation Y cannot see value in a leader, they will not connect. “You can re-invent yourself by being a source of inspiration, a role model and understanding them hence you connect with them. It is either you connect or you give them a value proposition where they respect, admire or they think there is something you have to offer. If they think there is nothing you have to offer, then there is no organisation and your sell-by date changes from 60 to now!”"
ABOUT DR. JAMES MWANGI
ACADEMIC QUALIFICATIONS
He holds an Honorary Doctorate in Business Administration (Honoris Causa), from Kenya Methodist University, Doctor of Humane Letters (Honoris Causa) Kenyatta University, and Doctor of Entrepreneurship from Jomo Kenyatta University of Agriculture and Technology. He is also the holder of a Bachelor of Commerce degree (Accounting option) from the University of Nairobi and is a Certified Public Accountant (CPA (K). He is a graduate of Advanced Management Programme (Strathmore- IESE Business School, Barcelona Spain)
LEADERSHIP STYLE
“I am a coach. I have an intuitive sense of when someone needs me to coach them. I respect my team and I am willing to lead it. I think I am known to give room to people to perform. I listen to advice. I ask questions.”
EQUITY CULTURE
“Friendliness and humility are important to us. We are a very humble brand. Our people have to be humble and down to earth. I interact a lot with the staff. I spend 80 per cent of my time with the staff. I champion the DNA of the bank. I cascade the vision. My role is to live the mission and vision; to set the example, to the best of my ability. I never do anything even subconsciously that goes against the mission and vision. I never in my actions or behaviour contradict the culture.”
PERFORMANCE AND REWARD MANAGEMENT
“We tell the person with performance problems: Look we gave you a general’s position but you are not delivering so you should go to a captain’s position and let’s look for a general for this job. From the top management team of 1993, not one of them is in the executive management. We have brought in layers of management and hired people from outside to fill these positions. Today, there are four or five people who can succeed me. We all want to be led by the best person; the one who will generate the most value for the Bank.”
Wings to Fly programme
Equity Bank through the Wings to Fly programme is hoping to turn the fortunes of bright and needy students in Kenya around. “We want to do what Tom Mboya did in the ’60s,” explains Mwangi who is also Chairman of the Equity Foundation. Annually, Equity Bank spends KSh600 million on educational scholarships for secondary and university.
In January 2011, the bank and MasterCard Foundation announced a nine-year four billion shilling partnership that will provide comprehensive education scholarships.
Mwangi says Equity focuses on education because of the human element. “Equity Banks exists courtesy of the people of Kenya. When you give back and want to be responsible, you have to make a direct impact to the people you are dealing with. Equity understands the plight of the poor because we see it on their faces, on the clothes they wear, and when they tell us about themselves.”
The partnership with MasterCard Foundation saw the programme award 12 full scholarships to each of the 100 districts in Kenya. “It is a vicious cycle we are trying to break and hopefully generate leaders from the bottom of the pyramid who are sensitive because they understand society,” he states.
The Wings to Fly programme has a leadership and mentorship element run by Equity Academy Dean, Chris Khaemba, a former principal of Alliance Boys High School. Khaemba argues that an environment that is focused more intensely on relevant disciplines beyond the four-year high school should be created to enable students inculcate a culture of values and ethics.
Last year, the Equity Academy organised a Leadership Conference that brought together students beneficiaries of the Equity Foundation. “We highly emphasise leadership and we do this through mentorship. The objective is to mentor classroom leaders to global leaders.”
Mwangi says this initiative is about creating transformational social leaders, people who will socially transform themselves, transform the social aspects of the communities they live in, and provide Kenya with the next generation of leaders.