Dangote is a business legend. Reading many LinkedIn comments on the fascinating piece by Azeez, I want us to look back to the playbook of the dean of business deals in Africa. When I developed the Accumulation of Capability Construct, I used Dangote as an example. Today, if you google “accumulation of capability construct”, Google will give you a definition from our works. Yes, we brought that lexicon into business, and I have used it in a piece in Harvard Business Review.
But the greatness of Dangote comes not just through the accumulation but compounding the capabilities. His brilliance is in his meticulous paced-acceleration into industrial sectors, mastering the elemental constructs of negotiation and time, unlike any other. With that zen-movement, nations have begged him after annoying him (Tanzania), and he has effectively imposed conglomerate tax on citizens he serves because he has leveraged his capabilities at the upstream to rewire the architecture of market systems, shifting the equilibrium points where his textbook becomes the recommended one. Yes, he is the Dean, and he approves all course materials. Get to this video again.
Firms win by accumulating capabilities. From Google to Dangote Group, when companies accumulate capabilities, they operate in domains that generate higher value (usually upstream) compared with where typical firms operate (usually downstream). Dangote Group can deploy massive assets and technical know-how in cement production, making it harder for new entrants and rivals.
To rise to the level to extract Conglomerate Tax on nations and citizens, capabilities matter. Amazon taxes the digital economy through Amazon Web Services. Dangote Group taxes Nigeria because it solves problems which few can imagine. For solving those hard problems, the firm demands special treatments in different ways from the government. What it does is typical: Amazon, GE, and global conglomerate live on that.
It is not Dangote Group’s fault; it is simply Nigeria’s fault that it has only one true (industrialized) conglomerate in the 21st century.
1. Register for Tekedia Mini-MBA here (Aug 10 - Dec 3). Four months, online, and costs $140 or N50,000 naira. We also have Certificate courses on logistics, startups, career dev, etc.
2. Read my new book, The Dangote System: Techniques for Building Conglomerates.