Sunday, December 4, 2022

Is Nigerian politics ready for disruption?

The mere existence of new parties is not a sufficient criterion for disruption. The new party must be offering a new or different value proposition.

• October 5, 2022
Political party logos used to illustrate the story
Political party logos used to illustrate the story

Politicians and political analysts can gain an insight or two from the concepts around disruptive innovation in the management field of strategy. Strategy principles generally are applicable to the military and warfare, from whence the art and science of strategy originated, to politics, political power, geopolitics, national development and diplomacy; to sports and all competitive endeavour; and, of course, to business and management. It is a negative commentary on the nature and content of our politics and the limited strategic input into it!

So back to disruptive innovation attributed to the great Harvard strategist Clayton M. Christensen and his partners and associates, including Michael E. Raynor, Scott D. Anthony and Erik A. Roth amongst others which they applied principally in the context of business and management. To set the stage for understanding disruptive innovation or disruption for short, let me take examples from its authors: suppose you were in 1876, and you heard that Alexander Graham Bell had developed a way to transmit voice over a wire. What would be your reaction? The world’s leading telecommunications company of that era, Western Union, dismissed Bell’s innovation as a toy! Or, in 1978, you hear that AT&T is testing a mobile phone service, or that in 2004 you read of the explosion of local high-speed wireless data networks using a technology called 802.11? 

Will you dismiss these imminent disruptions as distractions or toys? In 1990, I left First Bank for the new Guaranty Trust Bank when it only had investors, a license and two entrepreneurial promoters. I saw well-meaning colleagues in First Bank literally weeping at my foolishness and, for the next decade, watched the so-called old generation banks dismiss the entrepreneurial banks, as I later characterised them in my strategy research, as distractions, to their eventual peril. GTBank and some of its peers “disrupted” the administrative and bureaucratic business model of Nigerian banking and created a new value proposition that made the customer the king.

In the context of politics, we saw the US political establishment initially dismiss Barack Obama and later Donald Trump until they were almost in the White House!!! We saw a similar phenomenon in France with Emmanuel Macron. The thing is, when an unfamiliar innovation first emerges, the business or political elite is inclined to dismiss it at first until it is often too late!

The theory of disruptive innovation suggests that new industry players can use relatively simple, convenient, low-cost innovations to create growth and triumph over powerful incumbents. That is why fintechs are viewed as threatening to traditional banking business models; why online education can “disrupt” traditional universities; why Uber and Air BnB disrupted traditional taxis and hotels; amongst well-known examples of disruption. Incumbents have a high probability of beating new entrants when the contest is about sustaining innovations (i.e. improvements in historical, existing dimensions of customer value, i.e. the “business model” or “value proposition” is still the same, but the product or service is being improved) but are almost always liable to lose to new attackers armed with disruptive innovations (innovations which introduce a new value proposition by either creating new markets or reshape existing markets)

There are two types of disruptive innovations-low end or new market disruptions. Low-end disruptions, in effect, offer existing customers a lower-priced product but which meets the needs of that market segment, while new market disruptions target new or previously excluded customer groups. The intellectual insight behind incumbent’s inability to compete against disruptive innovations is due to their resources, processes and values which offer them little incentive to seek changes in business model or value proposition required to seek and deliver disruptive innovations.

Now let’s apply these concepts to current Nigerian politics. The incumbents are without doubt APC and PDP which are the de facto duopoly or co-monopolists of power in Nigeria’s ongoing republic much like the legacy Nigerian Breweries and Guinness in our then beer industry (AB INBEV has since joined the group turning it into an oligopoly?). APC and PDP have little or no incentive to change their operating model or value proposition to the Nigerian voters as the current system suits their resources, processes and values and has served them well this past twenty-three years and counting, especially as their individual members reserve the right to switch to the other side if their current side loses in any round! And switching costs are very low and switching benefits, high!

Applying the idea of low-end disruption, this concept may apply more easily to persons who desire to participate in politics as party members, party activists, party officials, candidates or even mere supporters. The price of entry into any of these categories in APC or PDP is high Moreso if your interest is in being an official or candidate. You would need significant sums of money, endorsement by party chieftains, may need to prove your buy-in into the existing business model and/or value proposition and there may be a significant waiting period before you may be considered! And of course, even if you were willing to fulfil all these conditions, many “underserved” or excluded potential participants in politics may have reservations about the duopoly’s existing processes and values!

The result is that many otherwise potentially politically active individuals have hitherto been excluded or tended to attempt to be active in marginal third parties with the outcome being usually failure! This writer for instance, sought the governorship of Ogun State on the platform of a third party, which turned out to have similar values and worse processes than the existing duopoly!!! And of course the duopoly takes more than a casual interest in the internal affairs of those parties in many cases turning them into vassal parties!

In the race to 2023, many individuals who otherwise may have stayed on the sidelines are candidates on the platforms of Labour Party, SDP, APGA, Accord Party, ADC, YPP and other such contender parties. Beyond candidates, we are possibly seeing a larger number of persons who are deeply and passionately interested in politics and political outcomes though not necessarily interested (for the time being!) in contesting elections. These types attend party meetings, participate in organizing and attending rallies, propagate political opinions on social media and argue vociferously about politics. Their values may be such that they may not need to be paid to do all these things unlike the practice in the existing duopoly!!!

Please note that the mere existence of new parties of itself is not a sufficient criterion for disruption. The new party must be offering a new or different value proposition and the operational model, processes and values must be different.

The more critical application of the theory of disruptive innovation would be to the buyers, i.e., the voters or potential voters. Nigeria’s voting data shows conclusively that only a small fraction of registered voters turn out to vote in our elections since 1999. The question is, why? The answer is probably similar to the underlying reason for the limited participation of political activists-exclusion or perception of exclusion!

There are many groups who may consider themselves excluded from Nigeria’s de facto two-party duopoly intellectuals, youths, women, middle-class educated persons, labour and significant segments of the so-called masses. Given Nigeria’s political history, an entire ethnic group may indeed consider itself excluded at different points in our history-the Yoruba, for instance, during the first republic (resulting in Operation Wetie) and post-June 12; the Niger-Delta in the early stages of this republic resulting in militancy and eventually the amnesty programme; the Hausa-Fulani North after the death of Umaru Yar’adua contributing to the escalation of “Boko Haram”; and certain segments of the Yoruba and Igbo ethnic groups, resulting in increased agitation for Biafra and Oduduwa Republics! The point is that all these excluded or “underserved” segments become prospective targets for new market disruptors.

When the existing duopoly see the seeds of potential disruption featuring all the previously excluded groups, like typical incumbents, they may dismiss the new entrants as flukes lacking “structure” or as jockers or toys, but more intelligent and proactive incumbents may consider alternative strategic responses! 

Opeyemi Agbaje is Founder and CEO of leading strategy and business advisory firm, RTC Advisory Services Ltd. He was former Head of Strategy and Entrepreneurship at Lagos Business School and is a lawyer, economic and policy expert and consultant on strategy and business. He is also Chairman of Stairways Communications and Advocacy Ltd, a political consultancy.

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