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Business Unusual

Opinion
From the South African cabinet reshuffle to the outcome of the US elections and Brexit, the “shocks” we have witnessed say more about our own arrogance, complacency and blinkered vision than about them being unexpected events. This is because we saw the signals, but we ignored them.

Now that the consequences are evident, we are giving pause to reflect but we have failed to talk about the signals. Until we decide to do so, we will continue to live in a world characterised by volatility, uncertainty, complexity and ambiguity - which is summarised as a Vuca world.

The consequences of a changeable world, as we have seen them play out politically and economically, have a significant effect on the corporate world.

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Illustration photo of South African rand

Long-term projections have become virtually impossible, because of external shocks and because the speed of change makes the future so unpredictable.

Companies are exposed to massive risk which they cannot control, but have been reluctant to admit. We have been observing without acting and we continue to believe in our assumptions, even though our approach is no longer working.

We are servicing the type of clients we no longer have and we need to forge a business strategy around today’s world.

Traditionally, companies have feared disruption by competitors. Today, disruption is driven by demand and by lifestyle, where customers are demanding delivery in an hour, never mind a week. Disruption is also driven by innovation and global forces, which even dictate what we can charge for our own products. Watching what the nearest competitor is doing just does not cut it anymore.

In the corporate world, we have not been trained for this fast pace, and we need to quickly address issues like productivity and strategy, if we want to catch up.

Read also: 'Junk'-rated debt could cost more than $10bn in lost funds

We cannot sit in the boardroom in January and plan for the year, because we will be disrupted by March. Companies need to adopt an on-the-go strategy, which will rely more than ever on the skills of their leadership and their employees.

In South Africa, people are still trained to do one thing in specific format, but what is demanded now are versatile and well-rounded people who understand the technical challenges, but have business acumen and the ability to be flexible and adapt to a strategy which is “on-the-go”.

In Africa, we are particularly bad at this. While we continue to boast that we are a resource-rich continent, Europe, China and the US determine the price at which we sell our resources. We live on a high-risk margin and if anything goes wrong, we are forced to be highly indebted.

In South Africa, we have these resource riches, as well as an educated and growing middle-class population. But the poor are struggling. This reflects our poor management-style. We have sabotaged the prospects of a country which is so rich in everything - including intellectual capability - through poor leadership and management.

This is our new norm - that we know what is wrong, but tend to accept it.

But what if we talked about issues like refusing to tolerate poor management and improving leadership?

At the Chartered Institute of Management Accountants (Cima) we believe that a Vuca world can be managed by adopting a liberal attitude and willingness to adapt or discard our current values. This can only be done with a sense of energy and with competencies which can adapt. This also involves partnerships, yet the most important one - between business and government - has been fractured.

As a first step, we need to expose and change unethical behaviours - in companies and in the government.

The voice of business should be at the forefront of taming the poor behaviour of the government and changing it.

Business needs to challenge the government from an ethical position. Collusion and malfeasance - be they on the price of bread, stadiums or data, or the award of an illegitimate contract - do not put business in a strong negotiating position.

Neither does its complacency and silence. And business needs to own up and accept its part, even if it is a guilt of omission in some of the shocks we have experienced in South Africa.

If business is bold enough to challenge the government ethically, the country will be in a better place.

We operate in systems where economies, business and government are inextricably linked and their fortunes determined by each other, and where policies should be - but increasingly aren’t - driven by the economic systems’ need.

We believe business should start with ethical and transparent reporting and become less fearful of contributing to the conversation about how we tackle and prepare for future “shocks”.

Badibanga Promesse is a regional vice-president of Cima, hosting its Africa Inaugural Conference in September, with “Leading the way in the Vuca world”.

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