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Upbeat Kirubi roots for Kenya as top investment spot

Business guru hits at journalists not to be grave diggers by always telling the negative side of the story and, instead, aspire to inspire through positive stories

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Businessman Chris Kirubi greets former US President Barack Obama when he toured Kenya in 2015. Looking on is First Lady Michelle Obama, among others.

Kenya remains the best investment hub in Africa despite the World Bank projecting a decreased GDP growth of 5.5 per cent down from six per cent recorded in 2016.

Speaking at a policy breakfast at a Nairobi hotel where business journalists had converged to discuss the story of Kenya’s current economic climate under the topic “The Future is Kenya”, Brand Kenya chairman the country boasts of so many activities that are yet to be exploited and hence would continue to be a focal point for investors.

“I am an investor and I will candidly tell you that Kenya is the best investment place in Africa and even in the world. We have so many opportunities which have not yet been utilised. We have gold, the best soil for farming and even better climate than Israel, who do their farming in the desert. We need to start looking at our country positively if we shall attract investors,” asserted Kirubi.

The business guru faulted the media for always presenting the negative side of the Kenyan economic story, which discourages investors.

“Everybody’s future lies in his/her own hands, but the future of Kenya depends so much on you (journalists). Do not be grave diggers by always telling the negative side of the story. Always aspire to inspire through positive stories,” said Kirubi. “Every time, I flip through newspapers looking for a business story, but the only story I find is about gambling, which is robbing Kenyans their hard-earned money.”

On politics, Kirubi said that it is only the flourishing business climate and entities that can turn around any political duel and the story of a politically unstable nation.

However, Kirubi’s positive outlook comes at a time investors have expressed concern over the charged environment surrounding the forthcoming General Election with some putting their plans on hold.

Kenya has also witnessed mixed results on the economic front with several companies laying off staff, retailers struggling to stay afloat and multinationals relocating even as others arrive to set shop in the country.

The World Bank’s Ease of Doing Business Report ranks Kenya 92nd out of 190 countries in the 2017 edition of the report, up 21 places from the previous year trailing only Mauritius, Rwanda, Botwana and South Africa in Sub-Saharan Africa.

This was attributed to increasing innovation in Kenya, thriving business environment as well as rising middle class.

The meeting was sponsored by Business Advocacy Fund and the Strathmore Business School as part of a campaign dubbed ‘Why the future is Kenya.’

The initiative is aimed at helping Kenya hit the Kshs9.5 trillion GDP level by 2020 as predicted by the International Monetary Fund (IMF).

The campaign draws business leaders from the financial, technology, service and hospitality sectors in a bid to open up under-developed areas of the country by continued investing that will provide access to jobs for more than 40 per cent of Kenya’s population and bringing in investments equivalent to five to eight per cent of the GDP.

Editor and writer at BUSINESS TODAY, Muli has a passion for human interest stories that have a big impact on economic development. He holds a BSc in Communication and Journalism from Moi University and has worked for various organisations including Kenya Television Service. Email: [email protected] or [email protected]

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Bt Intelligence

‘Fake News’ reinforces trust in mainstream media

New study by Kantar found that the reputation of traditional print and broadcast media outlets has proven more resilient than social media platforms and online only news outlets

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Traditional print media and broadcast outlets are more trusted that digital platforms in the coverage of politics and elections, a new study by the world’s leading research, data and insight brand, Kantar, has revealed.

The global “Trust in News” study, which surveyed 8,000 individuals across Brazil, France, the United Kingdom and the United States of America about their attitudes to news coverage of politics and elections, found that:

  • The efforts to brand ‘mainstream news media’ as ‘fake news’ have largely failed. The reputation of traditional print and broadcast media outlets has proven more resilient than social media platforms and online only news outlets, primarily as a result of the depth of coverage being delivered.
  • Audiences are becoming more widely informed and sophisticated in their engagement with, and evaluation of, news content.
  • The public retain a belief that journalism is key to the health of democracy – but have become more sceptical. Specifically, in both in Brazil and USA, where a significant percentage of the population believe ‘fake news’ impacted the outcome of their most recent elections.

Who do we trust?

The reputational fallout of the ‘fake news’ phenomenon has been predominantly borne by social media and messaging platforms, and ‘online only’ news channels. Print magazines, at 72%, are the most trusted news source, closely followed by the other traditional outlets of print newspapers and TV and radio news. Only one in three recognise social media sites and messaging apps as a trusted news source. ‘Online only’ news outlets are trusted by half of the population, significantly less than their print and broadcast brethren. Interestingly, the online presence of print and broadcast media are trusted slightly less than the originating titles and channels.

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Social media and messaging platforms have sustained significant reputational damage as a source of trusted news. News coverage of politics and elections on social media platforms (among which Facebook is dominant with 84% usage in the preceding week) and messaging apps (of which Whatsapp is the most used) is ‘trusted less’ by almost sixty percent of news audiences (58% & 57% respectively) because of the ‘fake news’ phenomenon. ‘Online only’ news outlets also sustained significant reputational damage in this respect: ‘trusted less’ by 41% of news audiences.

Print titles have proved more resilient, experiencing a smaller loss of trust, with print magazines and newspapers both ‘trusted less’ by 23% of audiences. However, both categories also experienced similar increases in trust in their coverage (23% and 17% respectively).

Print media nets out with more than three quarters of news audiences trusting them ‘the same’ or ‘more than’ before the ‘fake news’ phenomenon. 24-hour news channels also retain a strong position as a trusted source with 78% of news audiences trusting them ‘the same’ or ‘more than’ before the ‘fake news’ narrative.

Across all four surveyed countries, 46% of news audiences believe ‘fake news’ had an influence on the outcome of their most recent election. This was most pronounced in Brazil – where 69% believed fake news had an impact, and the USA where 47% believe there was an influence. There is though some recognition that companies like Facebook and Google are taking steps to tackle ‘fake news’. (13% of UK news audiences claiming to have seen efforts vs a third of Brazilians, 16% in France and 22% in the US).

News consumption habits are evolving

The news-reading public are becoming a more widely informed audience. 40% of news audiences have increased the number of news sources they use compared to 12 months prior. ‘All online’ has overtaken television as the primary source of news (figure 3). With under 35 year olds, social media – despite its reputational issues –almost matches television as a source of news (65% Vs 69%).

READ: Crazy deals up for grabs in Jumia Black Friday festival

The news audience is additionally becoming a more thoughtful audience. Contrary to ‘news filter bubble’ or ‘echo chamber’ narratives, we find 40% of social media users explore alternate views to their own and almost two thirds worry that ‘personalisation’ will create a ‘news filter bubble’. More than three quarters of news consumers claim to have independently fact-checked a story, while 70% have reconsidered sharing an article – worried that it might be fake news. On the flip side, almost one if five admit to sharing a story after reading only the headline.

The Kantar ‘Trust in News’ survey conducted representative sample surveys of 2,000 individuals each in Brazil, France, the United Kingdom and the United States of America.  A more complete summary of the survey can be found on Kantar Insight pages, along with access to the full report.

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Bt Intelligence

Big companies fail the brand resilience test

According to Grayling research, even among these well-resourced international businesses, almost half had negative content on the first page of their Google search profiles

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Almost half of Fortune 500 companies fail the ‘brand resilience’ test, causing millions of dollars of reputation damage, according to new research published Thursday by Grayling, an international communications agency.

The Critical Conditions research examines the brand search profiles of a cross-section of international companies from the Fortune Global 500, taking a look at the biggest issues that affect them, and using Grayling’s proprietary ‘GCore’ reputation management tool to determine the reputational health of their search spaces. In the realm of ‘too big to fail’ brands, do their digital and communications strategies culminate in an online space that is resilient?

  • Even among these well-resourced international businesses, almost half had negative content on the first page of their Google search profiles
  • Much of this negative content was old; the oldest story GCore found on page one of a company’s search profile dated back to July 2013
  • The world’s biggest tech companies, while far from immune to negative issues, do the best job at keeping negative content off their page one search results, suggesting there are lessons for companies in other sectors.

Grayling’s global head of strategic services, Jon Meakin says: “With NGOs, online activists and citizen journalists, as well as the fourth estate, holding businesses, politicians and others to account, you can forget the idea of negative stories being ‘tomorrow’s chip paper’. As our research shows, online, they can hang around forever. And that can have a real impact on a brand’s reputation and even value…”

Chris Genasi, Managing Director Grayling Kenya  says: “Information access connects organizations with their audiences directly, but brings with higher expectations of corporate transparency and ethical behavior. Google search is the new reputation battleground, and any organization that places a value on its public image needs a proactive approach to the management of its search profile.”

READ: Airtel hits at Safaricom with #RESIST offer

Critical Conditions assesses the issues and brand resilience of the top ten brands within the following sectors represented in the list of Fortune Global 500 companies, with additional analysis and context by an international panel of Grayling’s sector experts:

Critical Conditions assesses the issues and brand resilience of the top ten brands within the following sectors represented in the list of Fortune Global 500 companies, with additional analysis and context by an international panel of Grayling’s sector experts:

  • Up in the air: Why we love to bring airlines back down to earth
    • Jonathan Shillington, Managing Director Grayling Middle East, on how the risk to airlines of poor customer service is magnified through social media
  • Unwanted Side-effects: What healthcare companies should know about Google search
    • Sascha Nottmeier, on the critical scrutiny pharmaceutical companies face and the implication of potential issues on their search space
  • Taming the wolves of Wall Street
    • Tom Nutt, Head of Corporate Grayling UK, on how many financial institutions are still filling a villainous role, 10 years on from the global financial crisis
  • Hard to swallow: The dichotomy of food marketing versus reality
    • Julia Sturmfels, Associate Director Grayling Germany, on the everyman food expert and the paradox food brands face when marketing their products
  • Of hacks and tax… the Teflon world of tech
      • Alan Dunton, Managing Director of Grayling San Francisco, on why technology brands might garner an innate brand resilience online

    The Critical Conditions research is part of Grayling’s ‘Advantage Series’, a research and insights program that addresses some of the major reputational, regulatory and communication challenges facing organizations today. Critical Conditions may be viewed here

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Bt Intelligence

How Uhuru and Ruto were paid four times their salaries

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The average monthly costs of Mr Kenyatta’s pay and benefits and those of his deputy are Ksh12.33 million.

President Uhuru Kenyatta and his deputy, William Ruto, were grossly over-paid in 2016, according a report of the Auditor General, which reveals their salaries and benefits for the fiscal year ending June 2016 was four times that set by the Salaries and Remuneration Commission (SRC).

Pay transactions for the Office of the President under the Consolidated Fund Services (CFS)shows Ksh148 million instead was paid out, up from Ksh36.6 million in line with the payroll data.

Payments to the Office of the President through the CFS comprise salaries and benefits of Mr Kenyatta and Mr Ruto. This means that the average monthly costs of Mr Kenyatta’s pay and benefits and those of his deputy are Ksh12.33 million, the Business Daily reports.

But the payroll account, which normally excludes allowances paid to civil servants, puts Mr Kenyatta and Mr Ruto’s pay at Sh36.6 million — matching the pay approved by the SRC for the period starting 2013 to June 2017.

Under the lapsed four-year SRC pay guide, Mr Kenyatta was entitled to a salary range of between Sh1.23 million and Sh1.65 million monthly, putting his maximum annual pay at Sh19.8 million.

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Mr Ruto is entitled to a monthly pay of between Sh1.05 million and Sh1.4 million — effectively capping his annual pay at Sh16.8 million. But the CFS accounts indicated a pay of Sh148 million with Mr Ouko questioning the variance of Sh111.8 million.

Treasury says the Sh111 million could be the President and his deputy’s benefits and perks. The Treasury in a separate budget estimate document had shown the two executives will enjoy a combined allowances package of Ksh14.6 million a year.

In July, SRC cut the pay of State officers, including that of the President and his deputy to ease pressure on the wage bill to save taxpayers Sh8 billion annually.

The new pay that runs between September 2017 and 2022, shows the President’s monthly pay was cut to Ksh1,444,750, down from Ksh1,650,000. The Deputy President will get Ksh1,227,188, down from Ksh1,402,500.

The Treasury has also implemented an austerity plan to free up cash for development and essential services such as security, health and education.

READ: Bob Collymore’s salary shocks Kenyans

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Bt Intelligence

Employees motivated by bad news as well, research finds

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Bad news is better than no news at all when it comes to motivating staff, according to new research. The study found that withholding important information from staff could mean the difference between a motivated workforce and an unmotivated one – irrespective of whether it was good or bad news for workers.

Leif Brandes, of Warwick Business School, discovered that many managers underestimate the motivational power of bad news.

“If you look at the many online reports on employee complaints about a lack of transparency in their organisations, it is clear that many managers decide to partly withhold information from their employees, opting to keep them in the dark,” says Dr Brandes. “However, our research shows that doing this is more detrimental to their staff’s effort and motivation than previously assumed.”

In the paper The Value and Motivating Mechanism of Transparency in Organizations, published in the European Economic Review, Dr Brandes and Donja Darai, of the University of Zurich, designed a new version of the so-called ‘dictator’ game to study the effect of information sharing on motivation.

It involved two people with the aim being for participant B to motivate participant A to transfer as much money as possible to participant B. A was paid Ksh600 or Ksh1200 (£5 or £10), but didn’t know which, and then had to decide whether to transfer the money or not. B, who knew how much A had been given, could spend Ksh120 (£1) to send a message to A as to whether they had Ksh600 or Ksh1200 (£5 or £10). So effectively they could spend Ksh120 (£1) to give their partner the bad news they had received Ksh600 (£5).

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“We had participants play the same game up to 10 times, each time with a new partner. We designed the communication from B to mirror managers’ opportunity cost of communication in the real world,” added Dr Brandes.

Across these 10 rounds of play, Brandes and Darai found that when A didn’t know if they had Ksh600 or Ksh1200 (£5 or £10), the amount they transferred was 48% lower than when they had been given the bad news that they had been given Ksh600 not Ksh1200 (£5 and not £10).

o-BAD-NEWS-facebook-300x150 Employees motivated by bad news as well, research finds

At first glance, this is a surprising finding: even in the absence of information sharing, participant A can be sure to have at least Ksh600 (£5), so how could the sharing of bad news increase the motivation to transfer more money?

Dr Brandes says, “We think that information sharing helps participant B to shape A’s perspective of their relationship: after all, a person who is willing to spend money on information sharing is likely to be a nicer person than a person who does not spend the money. And ample research in economics and psychology shows that people are willing to share more with those who they perceive to be nice.”

Support for this was found in a different version of the game where A knew if they had £5 or £10, irrespective of B sending a message. But transferred amounts were still 40% lower when B had not sent a personal message stating again how much money A had received – even though A already knew.

The study shows that even if the news has already spread around the company employees would still be motivated just by being contacted and told personally.

“Our data provides clear evidence that people are not only motivated by money. Instead, informing them about relevant developments in the work environment – even if it has already started to spread within the organisation – can also boost work performance.

“Managers often have access to relevant information before employees, and can decide whether to share or withhold this information. Unfortunately many managers go for the latter, which demotivates their staff,” says Dr Brandes.

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In the study 50% in the role of participant B decided to disclose their information too restrictively. The consequence was that these participants earned about 30% than what they would have earned by being fully transparent in the experiment. One might expect that our ‘managers’ would have improved at establishing transparency by round 10, but they did not. In fact, they got worse.

The researchers attribute this lack of learning to another parallel between the real-world and their experiment: a manager who does not share information cannot observe how hard employees would have worked after information sharing. This makes it extremely hard to gauge the cost of not being transparent.

“These managers incorrectly believed that information disclosure was ineffective as a motivational tool and stopped sharing their information. Real-world managers should take note: it is not uncommon for uninformed employees to eventually even leave the firm, so sometimes bad news is better than no news at all.”

 

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