THE business operating environment is becoming increasingly Vuca, that is a volatile, unpredictable, complex and ambiguous environment.
Some say the operating environment is now Vuca on steroids — what with the global geopolitical headwinds adding on to Zimbabwe’s existing inherent problems the situation becomes quite explosive.
Consequently, we have seen quite a number of entities collapsing or being placed under corporate rescue. Sometimes it is quite shocking when you learn of some of the big names that end up going down this route. Some of the entities would have been the biggest in their industry and some can even be government-controlled monopolies.
The environment may be Vuca, but other entities are surviving. In fact, some may even be thriving.
This brings about the question of how are others making it despite the environment. What are the issues that are within each entity’s control in spite of the environment?
I believe that issues of corporate governance, strategy, leadership and management come into play and become even more important in times such as these.
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Corporate governance is important in order to have adequate checks and balances that ensure that the interests of the entity are safeguarded always and sustainability is achieved.
Strategy is also critical in order to navigate the treacherous terrain that we find ourselves in. How is the entity going to compete and position itself in order to ride the tide and be able to successfully surf through and even rise to dizzy heights notwithstanding the unfriendly environment.
Leadership becomes paramount in times of turbulence. Direction is determined by leadership and it is leadership that decides when to speed up, slow down or even when it is necessary to change course.
Basically, what happens and when and at what speed is set by the leadership of the organisation. The tone at the top is pervasive on everything that eventually happens in the organisation.
Then comes the day-to-day management of the entity. These people must possess the necessary skills and competence to steer the organisation through the storm. There is need to continuously scan the environment to know what is going on around you.
Management must always have their finger on the pulse of the entity in order to know how it is performing and what interventions are needed to stay on course, survive and thrive.
There should be adequate internal controls to safeguard income, optimise costs and secure the best return on investment possible in the circumstances.
Cash flow should always be watched relentlessly in order to survive.
Sustainability should always be key in all decisions so that the entity will be able to stand the test of time and be able to make it in times like this.
I hope that these pointers may help some entities to avoid corporate failure in this perilous and increasingly Vuca environment.
Until next time — God bless you!
- Chikohora is an economist and entrepreneur.