Monday, March 21, 2011


This week the New Vision makes 25 years. Started in 1986 as a weekly newspaper by the new NRM government, the company has grown into a multi-media behemoth (in Ugandan terms) dominating all but a few of the segments it has entered .

As of the end of the media group’s last financial year it showed a profit before tax of sh1.9b($775m) down almost 50% from the previous year, which had a lot to do with higher depreciation costs due to new investments in plant and machinery.

But the blip in financial performance is being determinedly reversed as the new assets start to throw off earnings. In half year results released recently pre-tax profits were up 63% to sh3.1b from the same period last year.

In the quarter century of its existence the group has served as a force for political, economic and social change and has exceeded its founders’ expectations in many ways. It has provided information, education and entertainment for millions of people. It has employed and provided business opportunities for thousands more. And more recently through listing on the stock exchange has served as an investment vehicle for hundreds of Ugandans

We could go on till the cows come home but my main interest is in the business model of the media group.

The New Vision as a dominant media player operating in a liberalised industry and economy, was for the first 18 years of its existence entirely government owned.

"Our experience with government owned companies is one of loss making, general malaise and drawn out decay. Understandable since the interests of governments are oftentimes slanted towards making quick political gains than growing wealth...

In many ways over the years, the stars aligned themselves benevolently for the New Vision.

A benign government policy that allowed the paper to be more independent in its editorial policy than many government’s would be happy with, a national economy that has quadrupled over the company’s life time and a succession of management teams that have not been content to seat on their laurels, but always willing to push the boundaries of possibility.

Ugandan businessmen can learn a thing or two about vision from the history of the company.

Former Managing Director William Pike took over management of the company in July of 1986 as a lean, tall and bearded 38 year old, who – judging by pictures of the time, may have been mistaken for a back packer.

Imagine that he might have graduated more than 15 years previously and his contemporaries were already amassing fortunes. His perspective therefore of what he wanted the New Vision to look like 10-, 15- or even 20-years down the road was always going to be bigger than most people around him.

His successor Robert Kabushenga has driven the company at tearing pace into the world of broadcast media, leaving many reeling and the naysayers sharpening their knives.
That too was driven by a vision that was bigger than anything being displayed locally.

Our businesses can also learn about building companies.

"Two things jump out when one examines the history of the New Vision; If you are organized internally to take advantage of market situations the money will come and secondly, that for a company to grow, a high degree of delayed gratification has to be exercised....

The building of the New Vision’s operations are still a work in progress. The commitment to building systems rather than centralizing decision making and power in the hands of one person, has ensured a smooth management transition and is what has propelled and continued to propel the company.

In an interview just before the New Vision went public in 2004 Pike said, $12,000 was the sum total of all the cash the company had received from the government.

By the time he left the company in 2006 the company had a book value – difference between assets and liabilities, of sh13.4b ($5.6m at current exchange rates).

The books are there for all to see, profits were largely retained and invested in increasing human and physical capacity in order to compete in an increasingly competitive environment, so much so that the company has grown largely through self generated resources through the years.

Going forward these same virtues will continue to serve the company, in addition to a maximization of its human resource, sharpening of its strategic process and improvements in operational efficiency.

But the New Vision should not forget in the famous words of Nelson Mandela, “After climbing a great hill, one only finds that there are many more hills to climb.”

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