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Brian Sedze: Crisis reveals corporate and national character

By Brian Sedze

No matter how difficult the situation may be, we often employ science and human ingenuity to overcome the problems. For some, when there is something to be done, they do it, without spending time worrying. Since worrying will not help, they choose to act. Organizations are the same.

Brian Sedze
Brian Sedze

The Covid-19 pandemic has brought fundamental changes in the business landscape by disrupting industry, commerce, education and lifestyle. This will present massive opportunities for radical innovation. It also presents individuals, companies and the nation opportunities to start afresh. This way of thinking should be ingrained in people that a crisis is not exactly the end of the world.

A lot of companies led by doomsday prophets have the tendency to mitigate. Most are already in the strategic thinking myopia of austerity like downsizing, shedding off the non-core activities, layoffs, revision of profit estimates, weaning off non-essential services and streamlining products and service.

Resilience is often needed in the time of crisis but it is those companies that decide to accelerate that shall win on a strategic platform. Companies with the ability to question everything and hold nothing sacred in terms of people, processes, products and place shall win in a sustainable manner.

Our country and companies do not have cost challenges requiring austerity .Our companies and country has productivity challenges. We are still producing at level often said to be at 1965 level and some of our companies are still operating at technologies of the 1970s or earlier. Austerity will add doom. Companies and the country will lose competitive advantages against regional and international peers.

The drive for self-sufficiency to escape the vestiges of globalisation in times of crisis does not require austerity but more expenditure. At worst it is either and, not, either or. A drive for new investment must be based on radical strategic intentions and completely new business proposals that question everything. Post corona the opportunities are plenty and the world is open for new business.

Why some companies may fail, post the pandemic, is because often companies are led by Chief Executives and Boards that are so driven to do the “right thing”. They are often office smart and street foolish. They believe in right things that were “tried and tested”.

They don’t invest in the youth and believe in the fallacy of an education system, now off the pace, delivering strategic outcomes. They have the same ancient advisors and boards that believe in the old truth that the “right things” must be done.

The failing companies believe they need to listen to their customers; they need to invest aggressively in new technologies to provide their customers with more and better products; they need to carefully study the market trends and systematically allocate investment capital to the innovations that promise the best returns. And, because they do exactly all the above, these well-run companies are predestined to lose their market positions to other upstart disruptors.

These beliefs are often based on being normal, yet we are in a phase of a new normal. The lesson is that companies should invest in small autonomous groups, build teams and often reward failure. In my book “Driving Strategic Innovation” we called it running a big enterprise like it’s a family run business.

Companies do not have to wait for a perfect product but fast tract the commercialisation loop. Customers do not know what they want until you show them. Market trends mean nothing to achieve success, in fact, it is a win to show the markets the new. The portfolio matrices like BCG and Ansoff are redundant. Trust big data but rely more on instinct and intuition.

Companies may have need not waste resources by starting the innovation cycle of product and a service but by copying and leapfrogging. A country can start innovation for success by copying working examples from other countries in mining, agriculture, tourism, banking and services.

We may be so backward in some industries that even copying is great innovation. Yet companies do not invest in having people just travel and notice. Failure in it all must be rewarded.

MIT Sloan Management Review says “It isn’t only Zoom, Netflix and Slack that are picking up but even traditional manufacturers are also doing well”. In the Zimbabwean/Southern African context there is a business case for radical and architectural innovation.

What organization requires doing is to disrupt. I look at what I learnt and examples of radical changes that maybe required in terms of globalisation, technology, labour, amongst other changes

Globalisation fad may well be losing its lustre. Most countries will put their citizens first before exporting even the most essentials like food, drugs and equipment.

The lesson the governments may have learnt from corona pandemic is that despite self-sufficiency often resulting in patent inefficiencies and high costs, is that,the country is not secure when it’s depended on other countries for manufacturing and being a supermarket economy.

There are immense opportunities for companies in import substitution, value addition, new product development and curtailing non-essential imports. The Ian Smith template post Unilateral Declaration of Independence can be dusted and bettered. I always say the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zima set) was a great idea which came before its time.Zimasset is still relevant but was discarded due to political expedience.

The lockdown taught the inquisitive mind that there is a possibility of a new norm. It will be retrogressive to return to our old ways of running corporates. This new norm is technology as one of the greatest pillars of corporate success. Years back I wrote that the Chief Information Officer shall be the centre of new corporate leaders.

Technology has become an enabler in provision of products, services and for general interactions. As examples, conferencing has now become reliant on video conferencing software like Zoom, stay at home entertainment is now moving to internet solutions like Netflix, online games occupy children’s minds, online grocery stores have become a reality, online customer service and applications are now preferred, cloud services like dropbox are becoming an ordinary workspace application, data centres are becoming an office reality, regulations are being relaxed to allow broader data plans, and home working has become a reality.

The need for a physical space is now an idea of the old.

Companies that are willing to accelerate and leverage on technology will see this crisis as a boon. This will apply to what was face to face government operations like tax collection, company registrations, social security payments, obtaining of licenses and permits, and the usual rigmaroles associated with obtaining government service.

What the lockdown taught me is that potential for dis-intermediation are immense. I had anything and everything delivered from meat, mealie meal, flour, drinks, alcohol and so forth delivered at my gate. There are huge opportunities driven by social and digital marketing. Opportunities to drive new frontiers in logistics and supply chain. We may have to bury two things traditional distribution channels and face to face based customer service.

In it all only if the government had not discarded the Science,Engineering,Engineering and Mathematics (STEM)priority education system we could be having a head start in the new direction. Unfortunately the messenger and the message are often one thing in a country that invests heavily in politics. Artificial intelligence, Bio technology, robotics, applications and other technologies are not everything but present a more viable economic future.

The safe avenue for national self-respect and sustenance shall be agriculture. Agriculture models financed like business to enable national pride shall be a new frontier in country success. A hungry country will present security challenges. New technologies, bio technology, genetic engineering and new farming methods present a boon.

Labour has become a frontier for change, some of the labour unfortunately become non-core. For companies opportunities to save are immense. There is need to increase autonomy of specific teams and allowing them to figure out how to add value to the corporate. Payment should be evolved from standard to variable pay plan with specific output or value creation as opposed to fixed salaries.

Home working and labour outsourcing may increase skills pool as the best and accepted work gets to be paid. A realistic opportunity exists to learn from football where there are no minimum and maximum remuneration but performance and value addition are what grade jobs. We have already had success with home working and realisation that it’s not often necessary to maintain expansive offices

It is an opportunity to get rid of dead wood in the near format of Jack Welch’s 70:20:10.It is a time to invest in new skills like those who enable technology based service provision. It’s possible to now flatten organograms as autonomous teams are entrenched.

The corporate and country leaders must realise that in all the Covid-19 gloom is a new start across a broad spectrum of products, processes, skills, strategy, structures, systems, staffing, values and style of leading. In it all crisis can present opportunities.

Brian Sedze is a strategy and Innovation consultant. He is president of Free Enterprise Initiative a think-do tank in public policy, less government and free enterprise.