By Seni Adetu
Over the next few weeks, I will be sharing my thoughts on how to win in today’s very challenging and dynamic business world. If you were to ask an Economics or Business student to describe the Nigerian economy and its current state in one or two words, I imagine you would hear such words as ‘monolithic;’ ‘fragile;’ ‘import-oriented;’ ‘Africa’s largest;’ ‘developing’ (or ‘regressing’ depending on the school of thought), etc.
Irrespective of the side of the divide you are on, the one thing that we all seem to agree with is that the economy is shaky at the moment. We also know that the economic potential of the country in terms of the population (and its youthfulness) or the emergence of the spending middle class, or the vast expanse of arable land for agriculture or availability of solid minerals, is huge. However, as I have always said, people take cash, not potential, to the bank. Besides, we have sung the ‘we have potential’ theme so often we are sounding like broken records now. It’s high time we turned potential into reality to experience sustainable economic growth.
It is an undeniable fact that the current operating environment for business is harsh – poor power supply, little or no forex, low capacity utilisation, high (and increasing) cost of capital, etc. So how are companies reacting currently? I believe that several companies must have pressed the panic button by way of, for example, freezing hiring (or even cutting heads), cutting marketing and training budgets, stopping innovation (due to uncertainties around value accretion from such new brands), doing portfolio rationalisation (as in letting go of some brands without due evaluation) and cutting costs in an unstructured, short-termist manner.
Question is, is this really the time to press the panic button or is there space for staying the course and remaining focused on the long-term strategic imperatives of the company while executing today’s plan, albeit cautiously? I argue for the latter. I strongly believe in the Nigeria project, and as I said before, the fundamentals remain strong. This is the time a truly inspirational leader demonstrates his ability to inspire employees to stay in the game and not give up the ghost.
For me, there are four to five key areas a CEO especially in a manufacturing organisation must focus on at a time like this:
(i) Revalidating the strategy for the year to ensure it is still on point in view of the changes in the macro environment.
(ii) Ensuring the company’s marketing investments are “active”, consumer –focused and geared towards delivering profitable growth and market share gains.
(iii) Ensuring greater operating efficiency by moderating manufacturing and related costs – even if that requires some smart brand value engineering work, such as reformulation without compromising product integrity.
(iv) Innovation and (v) Employee engagement and communication.
Underlying all these, is the need for increased focus on matters of governance and compliance because when employees are under pressure for performance at work or for burdensome request for financial support at home (by especially their extended family), they tend to get ‘creative’ in breaching established ethical standards.
It is no omission that I have not mentioned the cutting of heads and of marketing spend in my list. These are the default reactions in most organisations anyway and, in truth, in some cases, the CEO has no choice but to do these. I posit however, that there’s only so much fat you can slash off before getting to the bone as it relates to cutting people and marketing.
Back to the point of strategy revalidation, this is not the time to spend endless hours at meetings preparing power point slides. The leader needs to focus the team on execution. At times, the quality of efforts we put into planning and strategising is not matched by the quality of our execution; and that’s the performance bane of most organisations.
I recall that some years back, I was announced CEO in a major PLC outside Nigeria three months before I was to assume office. I then reached out to the incumbent CEO to share with me their business plan to prepare me for the task ahead. He replied that he was on the road, but would ask his Strategy Director to send. When his director sent by email, my computer system crashed – that was how heavy the document was! It took my IT team several hours of hard work to recover my files. One week after, my outgoing predecessor was back in his office, and apparently without checking that his Strategy Director had sent, also sent the exact material. Of course my PC crashed again. I became so nervous that I called on God for help. I wondered how I was going to successfully navigate my tenure as CEO of a company where the strategy document was so huge as to have crashed my PC twice! I recall vividly that on assumption of office and at my first town hall meeting with all staff, I announced that since we had “enough strategy to last a lifetime,” my three–year tenure was going to focus on executing the strategy flawlessly. I genuinely meant it, and that’s exactly what we did, and to great effect, leading to a career height where, to God’s glory, I was recognised by CNBC/ Forbes as a leading CEO. My point here is that today, execution must count even much more than before.
Finally, I submit that at a time like this, all roads lead to leadership. In the coming weeks, I will offer my thoughts on the leadership qualities required for successfully sailing through these difficult economic times.
Have a fantastic week.
Seni Adetu is a Public Policy Analyst.