A calling in business

From Sri Lanka to Europe and grocery shop to international corporation, Allirajah Subaskaran, Founder and Chairman of Lycagroup, has remained agile and adaptable, creating an 8,000-strong business with a family feel. Interview by David Woods-Hale

Can you tell us about your career to date, outlining some of your biggest challenges and achievements?

I was born in the town of Mulllaitivu, Sri Lanka, to a working-class family. 

I am from humble origins, having lost my father at a young age and being brought up by a single working mother as a result. During my childhood, Sri Lanka experienced internal conflict caused by a civil war and my hometown was a major conflict zone. My family decided to emigrate in the hope of finding safety and increasing our chances of having a positive future.

In 1989, I followed my brother to Paris and was joined shortly after by my mother and sister. After some time, my family, led by my older brother, opened a restaurant. It was entirely family run and it was soon joined by a grocery shop. We began selling calling cards for people who wanted to phone abroad. Initially, a distributor was providing us with
the calling cards to resell. However, they stopped providing the cards, creating a sudden vacuum. My brother recognised that there was a demand for the product and identified the opportunity for us to distribute the cards ourselves.

As this venture developed, instead of selling cards produced by someone else, we started producing and distributing them ourselves. By 1997, our market had grown from just Paris to a number of countries in Europe, and we found ourselves, led by my brother, travelling from Paris to many European cities.

After marrying in 1999, my wife and I decided to move to London and continue the business; in 2002, I started Lycatel, a telephone calling card company. 

By 2006, with advancements in technology and the emergence of the mobile virtual network operator (MVNO) market thanks to government regulation, there was a void to be filled. This is how Lycamobile came to be.

Due to our price positioning and the global movement of people, the company has been able to expand rapidly and now, 10 years on, we are operating in 21 countries and have become the world’s largest international MVNO and the market leader in international prepaid mobile calls. 

We have also expanded beyond the telecommunications space, launching a range of complementary businesses servicing different market segments, including LycaMedia, LycaHealth, LycaFly and Lycaremit. 

In my younger days, I didn’t have any plans for the future. I always focused on seeking out and seizing the opportunities available to me. This approach has been fundamental to the growth of Lyca Group over the past 10 years and is something I continue to live by now. 

What does your role as Chairman involve?

In the early days, we were very focused on the day-to-day business activities and tried to be spontaneous, seizing every opportunity as it came along. 

Now, while I play a very active role in everyday business activities, my priorities as Chairman involve developing a long-term strategy that will ensure we are delivering the best services to our customers and meeting their ever-changing needs. This involves thinking outside the box and introducing innovative and complementary ideas, as well as looking for big investment and expansion opportunities. 

Part of my role has also been about building a strong team from the ground up throughout the business. I believe in the need to diversify a company’s power base and I know the business would not be where it is today without the work and support of my management team. These individuals play a vital role, overseeing the development of the business as we continue to innovate and grow. 

What has fuelled the growth of Lyca Group over the past 10 years and what are your next steps? 

Lyca certainly looks different now than 10 years ago. Geographical expansion has been a long-term focus and strategy of Lycamobile, in particular as we work towards our goal of reaching 50 million customers by 2020. We are now present in 21 countries around the globe, ensuring we are the largest MVNO by geographical footprint. This means we are able to offer a cost-effective service, and we are constantly innovating to meet the needs of diverse markets, geographically and across sectors and communities.

Some of our recent product launches have seen us breaking into new territories to bring our low-cost calling, messaging and data services to emerging markets such as Tunisia and Macedonia, and we have plans for further expansion into six new countries this year, including Ukraine, Serbia, Russia, South Africa, Sub-Saharan Africa, Eastern Europe and South-East Asia. The market context in these regions presents numerous challenges that we have continued to tackle through focused innovation and building meaningful relationships with partners.

To meet the needs of a rapidly developing global community, we have also needed to innovate, not only by launching Lycamobile’s services into new territories, but also by expanding our range of services into new business sectors. 

Today, it isn’t enough for families to be able to contact each other; they want to be able to transfer money to each other, watch the same shows, listen to the same music, and share in each other’s everyday lives. It is along these lines that the Lyca Group has evolved. The Lyca Group is now a multi-national corporation delivering low-cost products to more than 15 million customers, not just in telecoms but also across technology, media, financial services, travel and transport, healthcare and entertainment.

We have bold ambitions, and have already launched a number of new products and services in recent months, including Lycalotto and ChilliTickets, which we acquired earlier this year. Ultimately, we want Lycamobile to be an industry leader in the technology, media and telecoms (TMT) sector and for the group to be a well-established brand, synonymous with connectivity, trust and affordability.

What are the challenges and opportunities you’re facing in a VUCA world? 

We are operating in a highly competitive environment that is becoming increasingly saturated. 

Our flagship brand Lycamobile is faced with the entrance of businesses from a wide variety of sectors, which are showing an interest in launching MVNOs, be it post offices, football clubs, social-media start-ups, multilevel marketing groups, banks, and non-for-profit associations. 

In addition, the sector is rapidly changing with new technologies coming to market, and new regulations being brought in to manage them.

We need to ensure that we are always offering a differentiated service to our customers. We have done this not only by expanding our existing MVNO business into new geographies, ensuring we are able to offer a cost-effective service in the market today, but also by diversifying the business, offering our customers a range of complementary offerings that meet their needs. 

Do you think it’s possible to have a long-term strategy in business, or is success based on agility within the marketplace? 

In this volatile environment, I believe it is important to focus on a long-term strategy and core product offering, ensuring it is delivered consistently, with the highest possible levels of service. 

At Lyca, this means being dedicated to driving forward our ambitious growth plans and customer acquisition target. However, it is crucial to ensure this long-term strategy is never static and continuously reviewed. We must continue to have an innovative, dynamic and entrepreneurial approach that will allow us to react quickly to changing technology, customer needs, and the developing economic and political climate. 

We would not have got where we are today without this ethos. We have always been committed to staying ahead of the game, and so must remain dynamic and adaptive and push forward into new areas and markets that others haven’t, adapting to our external environment accordingly. 

What do you see as the trends impacting most on employers’ strategy globally? 

We are predominantly a technology-focused business and must compete with some of the world’s largest tech companies, to source and retain people with the right skills to drive the business forward and remain on top of the recent technological advancements. 

By fostering employee growth and development, we aim to create an environment where our staff are able to thrive, feel supported, become adaptable to different situations and want to remain loyal to the firm. Despite being a company with more than 8,000 employees, we retain a strong family feel, with everyone invested in the success of the business and experiencing the same highs and lows together. Everything we do at Lycamobile is about connecting with people and bringing communities together, and that’s also our attitude towards our employees. 

How do you ensure there is a culture of innovation throughout the organisation? 

Ensuring a culture of innovation within the group is crucial as we continue to develop high-quality products and services to meet our customers’ varied needs. 

Lycamobile is proud to be a market leader in our industry, and a large part of that is down to our commitment to staying ahead of the game by pushing forward and moving into new areas or markets that others haven’t. Not only have we been able to capitalise on this approach, but we’ve ensured we are delivering the best services to our customers, by continuing to meet their ever-changing needs.

We are dedicated to supporting, developing and nurturing the next generation of senior management, so hiring the right people at all levels of the business is vital, ensuring we maintain and foster the company values of trust, connectivity and innovation. It’s important that despite being a company of 8,000 people, we’ve maintained an open atmosphere, where staff at all levels feel comfortable putting forward ideas, big or small, which are supported, discussed and explored. 

You’ve moved between borders throughout your career. How have you been able to adapt?

I’m not sure how rare this trait is; the movement of people is as old as the world itself. However, having moved from Sri Lanka to Europe to escape the civil war at an early age, I’ve had to learn how to quickly and purposefully adapt to new cultures, markets and contexts in both my personal and business lives, and this certainly hasn’t been easy. But, over the years we’ve managed to transform these survival tactics into a set of core skills which have become the foundation of Lyca’s success and the key to running a successful global company. 

These skills – agility, flexibility, being relationships-driven – are not only the skills that we drive every employee to have, but also enable us to adapt our products and services across borders, and build strong and constructive relationships with partners across our operating regions. 

Lyca Group has employees in 21 countries – how do you ensure there is
a consistent mission and culture?

Working across such a diverse range of markets, it’s important that we uphold the clarity of our mission to connect communities and bring people together through a range of high quality products and services. To ensure that this message is spread across all our operating regions, we have a strong culture driven from the centre of the Lyca Group. 

Our management team is committed to travelling across the different markets to lead negotiations, build lasting relationships with our partners, and place people who share Lyca’s values in key positions.

Do you feel optimistic about the future of business in the age of the ‘new normal’?

As a group, we continue to adapt and evolve to market developments and new environments and are excited about plans to ensure the continued success of the Lyca Group through a programme of expansion into new markets and sectors. 

Reports have shown that the MVNO market will continue to grow in the coming years and we aim to be at the forefront of that growth, with plans to have 50 million people using Lycamobile by 2020, focusing on Africa, Asia and South America for growth – huge, largely untapped markets for MVNOs. We know we can make a real difference to people’s lives by bringing cost-efficient, high-quality products and services to help them better connect with their communities. 

I certainly feel very optimistic about the future. 

Enhancing social innovation in Africa

African city. Business Impact article: Enhancing social innovation in Africa.

With Africa’s population projected to grow to 2.4 billion by 2050, there is an urgent need for the emergence of more social innovators, operating at scale, to address pressing problems in sectors from education and healthcare to employment and housing, writes Ndidi Okonkwo Nwuneli

Oiginally labelled the ‘dark continent’ and largely unknown to the rest of the world, Africa is now being described as the ‘last frontier’. 

Following decades of slow and uneven economic growth, the average growth rate across African countries is estimated at 5%, and more than two-thirds of the countries in the region have enjoyed 10 or more years of uninterrupted growth. 

The majority of the countries are recognised as democracies and internal and cross-border strife has diminished significantly. An average African woman’s life expectancy rate has risen from 41 in 1960 to 57 years in 2017, and more than 70% of children are in school, compared to around 40% in 1970. Many of these advances can be linked to the work of a growing number of passionate and committed social innovators: individuals who have identified novel solutions to the continent’s most pressing problems that are affecting the masses. These innovators operate in the public, private and non-profit sectors and are concentrated in the health, education and energy landscapes, with a growing number emerging in financial services, agriculture and sanitation. 

Their work is being propelled by the rapid advances in mobile technology, which facilitates mobile health, mobile education, payment systems and mobile money. In addition, they are gradually being supported by a range of initiatives including innovation accelerators, hubs, prizes, and fellowships. 

The most popular Africa-based social enterprises include the African Leadership Academy and African Leadership University, Ashesi University, Bridge International Academies, One Acre Fund, Riders for Health and Sanergy. These organisations have received numerous local and global awards and prizes for their pioneering efforts, and have strong links to the international community, which has provided funding and support for their work. 

There is also a growing number of organisations operating on the African Continent, which are essentially home-grown initiatives with minimal global recognition. They include:

  • Action Health Incorporated established by Dr Uwem and Nike Esiet in 1999, to address the rising incidence of HIV / AIDS and teenage pregnancies in Lagos, Nigeria. Over a 10-year period, they designed and introduced sexuality and reproductive health curricula into public schools, fighting against the odds in a deeply religious society. Today, this curricula and its delivery has been adopted across the majority of the public schools in the country, and have played a key role in reducing HIV/AIDs and teenage pregnancies.
  • CLEEN Foundation founded by Innocent Chukwuma, was established in 1998 to address rising crime rates in Nigeria’s major cities and create bridges between the police and citizens. Faced with stiff resistance from both sides of the divide from the onset, CLEEN worked with the Nigerian Police Force to revive and strengthen its internal accountability mechanisms such as the Police Public Complaints Bureau (PCB) in six Nigerian states. It also encouraged the police force to make its processes open and transparent, which ultimately exposed the gross misconduct of many police officers, leading to the dismissal of more than 5,000.
  • IkamvaYouth in South Africa was established in 2003 by Joy Olivier and Makhosi Gogwana. The organisation equips students in grades 9, 10 and 11, from disadvantaged communities, with the knowledge, skills, networks and resources to access tertiary education and / or employment opportunities. These ‘learners’ eventually become volunteers and ultimately continue the cycle of giving back to the next generation of ‘learners’. IkamvaYouth operates in the Western Cape, Gauteng, KwaZulu-Natal, North West, and the Eastern Cape, reaching thousands of young people.
  • The Ethiopia Commodity Exchange (ECX), was initiated in 2008 as a marketplace or platform that facilitates the trading of agricultural produce between buyers and sellers. It provides transparent price information for both farmers and buyers, and protects both farmers and traders from price drops and price hikes, respectively. ECX harnesses innovation, technology, and storage infrastructures to mobilise products from smallholder farmers and ensures product quality, delivery, and payment.

Challenges faced by social innovators

Social innovators operating on the African continent face challenges that are not unique to Africa, but are often more severe, with higher stakes. My interviews with more than 80 African social innovators have raised four critical shared challenges:

  • lack of credible data for local communities, countries, and regions, which slows down the processes for planning, piloting, and scaling social innovations and hinders the ability of key stakeholders to measure their impact on society. 
  • heterogeneity within and across countries, which includes significant diversity in colonial histories, language, religion, culture, community assets, and social development, essentially means that there is ‘no single story’. Innovations must be tweaked or significantly altered to enable scaling from one community to another, which is not only more expensive, but also slows the scaling process. 
  • fragmented ecosystems, in almost every sector, especially the agricultural, education and health landscapes, limit the ability of innovators to reach large numbers of people in record time. Consider the agriculture sector, where 85% of arable land in Africa is cultivated by farmers with less than two hectares. This essentially means that any intervention that wants to scale up in this sector can only do so by working with farmer clusters as opposed to individual farmers. The process of creating clusters of farmers, hospitals, schools, small and medium-sized enterprises, and other sectors, and building trust among
  • these groups, takes time and requires financial resources. 
  • significant talent, infrastructure and financing gaps which limit scaling. For example, only one-third of Africans living in rural areas are within two kilometres of an all-season road, compared with two-thirds of the population in other developing regions. This, in turn, makes it extremely difficult and expensive to extend healthcare, education, and agriculture innovations to communities in rural areas. Sadly, with underdeveloped distribution and marketing systems, social innovators essentially work along all aspects of the value chain, filling gaps that ordinarily would not exist in other markets to reach people.

Prerequisites for success

All social innovators need to invest in critical building blocks for success – rooted in sound management principles: clear missions, visions, and values. However, there are at least four prerequisites to establishing successful social innovations in the African context which deserve significant attention.

1 Compelling business models: Social innovators need to develop compelling business models, defined by six critical components: demand driven, measurable impact, simple, engages the community, leverages technology and low-cost. These six components differentiate initiatives which die at the pilot phase or when the donor funding ends, from initiatives that are sustainable and able to achieve scale, spanning communities and even countries. Innovations that are demand driven essentially meet the needs of individuals, who value the product or service and are willing to contribute their time and financial resources, regardless of how minimal, to obtain them. In addition, the innovators have determined the most cost-effective approaches to deliver at scale and developed effective systems and structures to support their scaling effort. They often use simple payment mechanisms using mobile technology and support from microfinance partners, where applicable. These tools are highly dependent on a robust data – tracking system to gauge impact and usage. Two examples from the energy sector that demonstrate the power of demand-driven and sustainable business models are M-KOPA Solar and Off Grid Electric, which both operate in East Africa. They provide solar solutions to more than 550,000 households using a pay-as-you go model, and have demonstrated the tremendous potential at the bottom of pyramid

2 Talent for scaling: Talent on the African Continent remains a huge constraint for all growth sectors given the weak education systems and the global opportunities that are available to the best and brightest. As a result, every social innovator needs to invest in attracting and retaining a dream team composed of mission-driven high achievers. They also need to invest in recruiting a committed and independent board of directors, and engage volunteers, short-term consultants, and fellows. Organisations such as EDUCATE! In Uganda and Sanergy in Kenya, have designed and implemented creative strategies for attracting, retaining, and developing talent. They have also invested in building a culture of innovation and excellence, which attracts individuals from the private sector to their organisations. 

They offer tailored training programmes, travel fellowships and significant job responsibilities for their team members and have also developed modular approaches for scaling talent. 

3 Funding for Innovation: There is a broad range of financing options available to social innovators in Africa, depending on whether they operate for-profit, nonprofit or hybrid organisations. These financing options range from fee-for-service and cross subsidisation to externally generated funds such as grants, awards, fellowships, challenge funds, crowdfunding, impact investments and loans. In addition, the funding landscape, especially for impact investments, has expanded dramatically over the past 10 years, with cities such as Nairobi hosting more than 60 impact investment funds and other investment vehicles, where only a few existed 15 years ago. In-spite of the plethora of funds, most local social innovators struggle to obtain financing for their ventures, while funders complain that they cannot find initiatives that are investment ready. Indeed, external funders are only interested in engaging with organisations that have strong credibility, governance structures, financial management systems and controls and can demonstrate the ability to use the funds to achieve results.

Social innovators operating in Africa have obtained financing work diligently to establish and communicate a strong business case and theory of change, backed by sound data that establishes a clear need and sustainable demand. They also amplify their impact work through creative communication strategies to raise broad-based awareness and effectively differentiate themselves. In addition, they demonstrate strong transparent systems and structures, a culture of ethics and accountability, attractive return on investment ratios and exit options for impact investors, where applicable.

4 Partnerships with key stakeholders in the public, private and nonprofit sectors: Social innovators cannot achieve impact and scale without cross-sector collaborations, rooted in shared values and a desire to achieve collective impact. This is especially relevant in highly regulated sectors such as health and education.

Sadly, there are few examples of partnerships in the African context, largely linked to significant distrust among actors, the intense competition for the perceived ‘small pie’ of resources and support structures and the fear of giving up control. Partnerships are also challenging in an environment where there is a high level of bureaucracy and red tape within government institutions which ordinarily should serve as catalysts for collaborations and innovations. In reality, social innovators who successfully collaborate in this context, actively map the ‘ecosystem’, determining which stakeholders can serve as champions, opponents or even beneficiaries. They then develop strategies for interfacing with all key actors, proactively shaping their ecosystems and forming strategic cross-sector collaborations that foster impact and scaling.

Preparing for The future

With Africa’s population projected to grow to 2.4 billion by 2050 – more than 70% under the age of 30 years old, with 60% in cities and towns – there is an increasing need for the emergence of more social innovators, operating at scale. These individuals will essentially need to develop creative and innovative solutions in education, healthcare, employment, sanitation, security, electricity, transportation, and housing to meet the needs of the people.

The social innovators will need also need critical leadership and management skills, as well as the talent, financing and partnerships required to surmount the obstacles they will face to pilot and scale interventions.

Indeed, Business Schools in Africa and around the globe will have to play a critical role in preparing this next generation of social entrepreneurs and innovators. 

The Bertha Centre for Social Entrepreneurship at the University of Cape Town is just one example of the numerous institutions in Africa and across the globe that are working to inspire, empower, and equip the social innovators.

I am convinced that the ability of more social innovators to pilot, establish and scale their initiatives to solve Africa’s most pressing problems will transform the continent and continue to ensure that Africa progresses from the last frontier to the brightest continent over the next decade.

Ndidi Okonkwo Nwuneli, Harvard MBA 1999; Wharton Undergrad 1995 is a serial social entrepreneur based in Lagos Nigeria. She is the founder of LEAP Africa – www.leapafrica.org, co-founder of AACE Foods Processing & Distribution Ltd. – www.aacefoods.com and co-founder of Sahel Consulting & Advisory Ltd – www.sahelcp.com. She is the author of – Social Innovation in Africa: A Practical Guide for Scaling Impact, published by Routledge in 2016.

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