How to win a business assignment in Kenya
Why should I read this document?
This document aims to give specific details on how to conduct business in Kenya and provide a few pointers on succeeding at winning business in the country. It also highlights some aspects of the Kenyan culture that one could leverage in winning business deals or opportunities.
Important!
Five most important things to know about doing business in Kenya (if you only read one thing, that is what you should read).
Understand/Align with Hierarchy and Status
Like most African countries, Kenya is a hierarchical society. Although decision-making processes are usually analytical, the most senior person(s) in the team or organisation usually decides with whom to do business. As much as possible, build business relationships with high-ranking officers in organisations – the higher the rank of the people you know, the greater the chances of winning the business.
Tact and Diplomacy
Communication in Kenya is usually implicit; people do not say what they mean, particularly in uncomfortable situations. Learn to read between the lines and avoid being too direct, which might make people uneasy.
Networking
Partnering with a local business or person will help build relationships and make introductions to the environment easy. This act would help you settle into the society and business environment. Practical ways to build beneficial networks for business advantage include joining influential groups (e.g., golf clubs, country clubs, capital clubs) and attending business seminars and conferences.
Gift-giving
Giving gifts can set you apart from your competitors, keeping the business relationships with clients strong. In Kenya, gift-giving helps build stronger connections and relationships with business counterparts. However, one must understand the policies guiding gifts in different sectors and industries. One must also know the right gifts to give in various contexts, differentiating between gifts and bribes.
Right Pricing
The Kenyan market is very price sensitive. Tailor your offerings to match the market and always give yourself room to make price concessions.
Short Introduction
Kenya is the third-largest economy in Sub-Saharan Africa after Nigeria and South Africa (Naidoo, 2020). The country is well-known for its wildlife and safaris, and it is one of the world's most popular tourist destinations (Wasike, 2021). The country's commendable political and economic reforms led to sustained growth and favourable socioeconomic changes (The World Bank Group, 2021). Kenya's private sector is still weak, and the nation is susceptible to the effects of widespread poverty and inequality. It is also vulnerable to internal and external shocks and faces significant challenges from climate change impact. (The World Bank Group, 2021). However, the World Bank (2021) notes that Kenya could become one of Africa's success stories. It has a growing young population, promising private sector, skilled workforce, enhanced infrastructure, and a new constitution. These attributes have positioned Kenya to play a significant role in East Africa and the wider continent (World Bank Group, 2021). It is, therefore, an attractive prospect for companies seeking to broaden their international base for sales or supplies.
Furthermore, being an English-speaking country in the same time zone as eastern Europe (GMT+3), Kenya offers European businesses unique opportunities for collaboration (Kiwelu, 2019). As with any new market, cultural differences could challenge foreign companies intending to do business in Kenya. This document provides details on how these companies can manage those issues and thrive.
Content
Understand/Align with Hierarchy and Status
In Hofstede's 6-D model on National Cultures, Kenya scores comparably high on Power Distance (PDI) and Masculinity-Femininity (MAS). This assertion means that society accepts a hierarchical order and significantly emphasises achievement & success (Hofstede Insights, 2017). These two factors suggest that people intending to do business in Kenya should consider power structures and rank (both in corporate and general society contexts).
In hierarchical societies, the power holder or highest-ranking person usually makes important decisions alone (Hofstede, Hofstede & Minkov; 2010, pp. 50-88). People typically defer to them for directives and instructions. You must understand the power dynamics within the various public or private enterprises and respect the instituted hierarchical lines. Large organisations particularly tend to emphasise hierarchical lines (Busienei, 2013, pp. 53-54). Sometimes, these hierarchical structures are informal. There may be instances where a person without formal authority wields a strong influence in decision making (particularly in the decisions on who wins a business). You must study the organisation or agency, discover the formal and informal powerholders, and build relationships and trust. The higher the rank of the people you know, the greater your chances of success in doing business.
Recognising and respecting rank and status are also essential. Kenyans may consider you disrespectful if you do not address people by their correct position and titles (Commisceo Global Consulting Ltd, 2021; Mutulu, 2016; Adventure Alternative Ltd, 2015). Not using the proper appellations for your potential client or partner may seem trivial. However, still, it could have a significant impact on business decisions. Do the homework of finding out the correct titles and status of the critical stakeholders in the bid process and address them accordingly. You may offend a professor or "Dr" if you do not address them appropriately. They may even openly correct you when you do not use the right title.
Furthermore, since Kenya is a masculine society, appearances matter. People prefer to associate and do business with those they perceive as successful. Therefore, it is essential to carry a look that depicts success. Subjective elements like clothing, shoes, cars, and so many other outward forms you display boost your standing and chances of winning business.
Tact and Diplomacy
Kenya scores low on Individualism in the Hofstede 6D model. This situation means it is a collectivist society. As a result, communication is usually implicit, and there is a need to read between the lines (Hofstede Insights, 2017; Mutulu, 2016; Adventure Alternative Ltd, 2015). Kenyans usually would not tell you when uncomfortable (Commisceo Global Consulting Ltd, 2021), which calls for tactfulness and diplomacy. It is essential to take sufficient time when conversing with people to chat about personal issues (family, health etc.) before diving into business (Commisceo Global Consulting Ltd, 2021). Avoid being direct, particularly when giving negative feedback or disagreeing with someone else's point of view. It is best to express disagreement and criticism in private.
Also, when receiving feedback, try to listen to what your counterpart(s) is (are) not saying. You may not be able to know what a Kenyan entirely thinks about you or your product from what they say alone (Commisceo Global Consulting Ltd, 2021; Mutulu, 2016; Adventure Alternative Ltd, 2015). Learn to 'read the room' and clients' body language to understand their intentions better. In addition, because Kenyans live in a collectivist context, you would need to invest a lot of time in building relationships. Avoid going straight to talking business as Kenyans may consider you too aggressive and dishonest if you are direct.
Networking
Since the country scores low on Individualism, building and maintaining strong relationships is essential in Kenya. To a significant extent, business success would depend on "who you know." Having a local partner could help you build relationships and introduce notable persons in the business environment. Strong locally-based partners could also help your business settle into the environment. Your contacts and relationships would be your best foot-in for winning business: the business environment thrives on recommendations and referrals. Joining groups like golf clubs, country clubs, capital clubs (some by invitation alone), attending business seminars and conferences are clever ways to make good contacts and establish beneficial relationships. Having close personal relationships with power holders also sets you apart from your competitors. These relationships could smoothen your business setup process.
Gift-giving
Although it is not mandatory, gift-giving could help you build stronger connections and relationships with your business counterparts in Kenya. Giving gifts could set you apart from your competitors and help keep the business relationship with your clients open. The importance of gifts aligns with Kenya's high Power Distance and low Individualism scores on the Hofstede 6D model.
When gifting, one must always be strategic about giving a gift to avoid affecting the reputation and values that are trying to project. Hence, do gift-giving appropriately, observing different rules in different sectors. Learning the norms in various contexts would be wise before offering gifts to a potential client.
'Freebies' could impress the clients and improve their disposition towards you. These freebies could include business lunches, breakfast meetings, and executive treatments like providing attendants (drivers, valets) for your business partners or branded packages after a visit. It is usually advisable to give gifts during special occasions, such as birthdays, weddings, or religious festivals (Commisceo Global Consulting Ltd, 2021; Mutulu, 2016; Adventure Alternative Ltd, 2015).
One key area in which many foreign businesses could likely struggle in Kenya, and perhaps across many other developing countries, is how to differentiate between a gift and a bribe. There are no clear rules; however, the gift’s magnitude or obvious intent (e.g., to arouse a disproportionate influence or to provide undue favour) could make it look like a bribe. This issue is another area where a local partner or consultant could help.
Right Pricing
Having the correct pricing for goods and services is essential. The Kenyan market is very price sensitive (Kamau & Wrobel, 2021, pp. 1-4; International Trade Administration U.S. Department of Commerce, 2021). Kenya's spending power rose rapidly before the Covid-19 era (Oxford Business Group, 2017). However, the market has a much lower income per capita than European economies and even some African countries like South Africa, Mauritius, and Botswana (Kamer, 2022; World Bank Group, 2022). You should conduct a market survey before fixing your prices.
Recent struggles with a declining economy in the face of the Covid-19 pandemic have intensified sensitivity to prices. Tailor your products and offerings to match the market as best as possible. Procurement managers could also be influential in this regard. It is best to have good relationships with them and any other decision-maker. Once the decision-maker is happy with the price, it is easier to get the rest of their team to agree with your price. Finally, always give yourself some room to make concessions during price negotiations. Buyers would usually consider your willingness to concede fees a show of goodwill.
Short case study
Eric worked in consulting for ten years in Greece. Having consulted for different firms worldwide, he decided to start his own business and moved to Kenya. He thought it would be simple in Kenya since he had worked with four Kenyan firms. He had also built some business relationships in his earlier job. He planned to convert these connections to business partners. Sadly, none of his links would give him business even though they expressed their delight in seeing him start up his firm. He realised that it was entirely a different ball game being an independent consultant in Kenya. Amidst the frustration, Eric learned to adapt to the networking principles in Kenya's consulting business. He attended as many relevant conferences and seminars as he could find. He also joined an elite business club in Kenya. These moves marked the turnaround for his business. He began to build relationships with captains of industries and decision-makers from different organisations in a short while. Over time, he saw an increase in patronage and gradually grew his business into a successful venture.
Resources and interesting links
1. Priority Activator Consulting Limited
Market Entry Support Services, Recruitment, Human Capital Advisory, Training
https://www.priorityactivator.com/
2. GPP Consulting Limited
Product Research and Development, Market Research, Policy Development, Regulatory Liaisons, Environmental Impact Assessments
https://www.gppconsulting.org/clients
3. General information about Kenyan culture, customs, and etiquette
Adventure Alternative Ltd:
https://www.adventurealternative.com/information-kenya/
4. Commisceo Global Consulting
https://www.commisceo-global.com/resources/country-guides/kenya-guide