HOW ZIMBABWEAN BUSINESSES CAN SURVIVE THE CURRENT ECONOMIC CHALLENGES
In November 2018 the Finance Minister of Zimbabwe presented a 2019 National Budget speech, which had the mantra “Austerity for Prosperity”. The Budget detailed the measures that the government has since taken to address fiscal imbalances and work towards building the economy. As the country braced for the changes the Finance Minister made it very clear that the road to prosperity was not going to be easy as such organizations and individuals had to brace themselves. Now fast forward 9 months later, the road has indeed been a bumpy one, major highlights being shortages of fuel, increasing prices of fuel, introduction of new currency, acute shortages of electricity and reduced disposable incomes. This has greatly affected organizations as such they have been forced to be very agile in adapting and adopting new ways of doing things. This article is going to focus on ways in which organizations can adapt to the current economic challenges as the country takes the road to economic recovery.
Whilst flexi-time refers to a more flexible way of working which enables employees to balance their working hours and commitments outside work, however given the 10 to 18-hour power outage, transport and fuel woes it becomes strategic for organizations to embrace flexi-time and allow employees to determine how they want to work as long as they achieve organizational objectives. Flexi- time is a work arrangement which calls for organizations to measure employees by what they deliver other than by the number of hours put at work. As such organizations should now ponder about setting targets and clearly communicate what should be achieved. Given the current problems of transport, transport fares and fuel shortages individuals who have the capacity to work from home can do so as long as they meet the targets expected. This helps shave off the stress and turmoil caused by the need to wake up very early and queue for fuel and cheaper transport and ensures that work gets done as expected. An inflexible 8 to 4 coupled with the transport turmoil has sadistically reduced employee performance. Whilst not all organizations and functions can adopt flexi-time organizations in the services sector and administrative roles in manufacturing organizations whose jobs do not require them to be physical available on the plant and at work premises can adopt the approach. According to Pam Walden flexi-time is a truly modern and cost effective way of embracing what people produce other than hours worked.
2. Shift reconfigurations
The current power outages have seen at most organizations going for between 10 to 18 hrs. without power, organizations have resorted to the use of generators to power their operations. However, this has been un-sustainable as fuel prices have been continuously increasing and more litres are required to run the operations. Manufacturing organizations have been hit the hardest, as they have to produce more to satisfy their demand. It becomes reasonable for most organizations to switch working hours, and reconfigure their shifts such that they align them to the times power is restored. This then means that where most organizations where running the day shift, the shifts can now be converted to night where in most instances power is being restored between 10pm and 5am. This allows organizations to save on costs of production. However, where this happens organizations have to engage their employees through the various modes of representation to ensure that they have a buy in and get an understanding as to the reasons for the shift reconfigurations. In this instance the organization can have a shorter running day and night shift to ensure utilization of power when it is restored. Organizations can also in the long run invest in renewable energy such as solar power to ensure that they have enough reserve energy to power their operations in case of power rationing. Notable organizations that have started investing in Solar power generation include Econet Wireless.
3. Focusing on products/ Services that create most value
Organizations exist to make profits and ensure sustenance of the business as such with the current economical upheavals it becomes critical for organizations to focus on areas that produce the maximum value such that maximum return can be retained for the business, to ensure survival. For instance, if an organization produces two products, and one creates more value more than the other, in terms of sales, capacity utilization, lower costs production and profits it becomes better for the organization to invest in products/services that create more value. However, in doing this organization should make sure not to compromise the viability of their business and their brands. More so this also has to be done in direct contact with the customers served.
4. Cheaper Alternatives — Raw Materials and Spares
With the increased scarcity of foreign currency which most organizations relied on to import spares and raw materials, it has been difficult for organizations to service their machinery and import their raw materials for production. One of the best bets in the interim for businesses is to search for local imports in order to close the gap caused by in-ability to import. Whilst this provides business for local suppliers it also provides a sustainable back-up for organizations to service their machines and produce their products.
5. Sustainable Employee Remuneration (Hardship allowances and cost of living adjustments)
Employees work for remuneration in order to take care of their families and other commitments. Given the current instability in the prices of goods, it becomes difficult for individuals to survive. On average prices have increased more than threefold, and salaries have increased at a slower pace. Whilst organizations might fear that a radical change in salaries may be difficult to reverse if the economic environment is to stabilize, currently it is good for organizations to cushion employees against the unbearable economic environment and examples of ways to cushion them is through giving employee’s hardship allowances, food hampers, providing lunch and transport among other things. These assist in making life bearable for employees and thus enhance their productivity.
6. Agile Managers
The current economic challenges in Zimbabwe are a true test of top class management. The argument here is that, the role of management should go beyond the internal organizational challenges and also cover external issues. This thus requires managers to continuously forecast and design emergent plans that ensure organizations sail through the current economic storms. Whilst the argument may be that the economic environment is a given and there is not much that management can do, it however is the ability of managers to design plans that work which ensures that organizations are successful. As such managers have to eat, work, pray and dream effective plans that work.
7. International Case Studies for benchmarking
You would realize that all Economic instabilities that occur in any given country at any given point would have occurred in some regions and as such organizations have to benchmark with past and current cases on how they can maneuver given the economic hullaballoos. Proven country cases of the Asian Financial Crisis of 2008 among others and the Zimbabwean Story of 2008–9 can provide insights on what strategies to adopt in order to reduce the impact of the economic problems currently faced. Whilst some of the points have been highlighted in this article it is good for organizations to look for relevant business cases that they can benchmark with to pick learnings and guarantee survival.
The business environment is affected by various factors within the internal and external environment, survival can only be guaranteed by how well organizations respond and adapt to these changes. It is thus in the best interest of organizations to ensure that they align themselves with the changes such that they do not lose business and close. Turbulent economic environment requires organizations to swiftly adapt and come up with solutions for problems before they even occur. According to Heraclitus the only thing that is constant and endures is change as such change should be planned for and adapted to. Adaption is key.