By Peter Olyott, CEO at Indwe Risk Services
With GDP growth prospects forecast at a meagre 1.3% for 2019, and 1.7% in 2020, business confidence in mid-2019 remains at an all-time low. Exacerbated by policy uncertainty, debilitating bouts of power cuts, challenges in industries such as mining, and political events like national elections, getting out of the slump continues to be a pipe dream for corporate South Africa.
But, what past experiences have taught us, is that South Africans are resilient when faced with adversity. Some of our country’s most successful individuals and entrepreneurs such as Patrice Motsepe (African Rainbow Capital) and Herman Mashaba (Black Like Me), overcame economic, and socio-political hardship to initiate and lead successful businesses. Ian Fuhr (Sorbet) endured severe financial pressure to get his start-up off the ground, while Jannie Mouton (PSG Group) had to pick himself up after getting fired at age 48. Even Discovery Group was not established in a financial boom – in fact, in the late 1980s and early 1990s, South Africa’s future appeared to be on the figurative cliff edge. The common thread between them all, is that they all found opportunity during trying times. It’s a phenomenon that has been engrained in South Africans’ DNAs, in that, when the odds are stacked against us – and we find ourselves in “interesting times” – our survival instinct kicks in, and we pull out all the stops to reach the top.
During times of uncertainty, as hard as it may be, leaders need to look for opportunity with zeal and vigour, all of this of course whilst simultaneously trying to keep their existing businesses afloat. If the opportunities were that easy to spot, or provided a sure-fire business revival solution, then everybody would be doing it. Now, more than ever, our quintessential Yenza uhlelo; ‘n boer maak ‘n plan; or “Tougher-er™” (with acknowledgement to Toyota) gees or character, needs to ignite us from within. These opportunities are potentially infinite and could mean, inter alia, identifying other revenue streams, saving clients’ money, realigning business spend, creating new products or services, or simply forging ahead as business-as-usual while industry counterparts throw in the towel.
Essentially, leaders in the South Africa of today need to ensure that they spend sufficient time reviewing and identifying opportunities, and not just to focus on the day-to-day trials and tribulations of the business. In the financial services sector, there is no point being content with a redundant business model.
Without purporting to be the holy grail of “how to survive tough economic times”, there are some core fundamentals one should not cast aside in striving for relevance and sustainability:
1. Don’t compromise on integrity
Integrity equates to trust, which is why operating with integrity is vital for a business. Technology has brought with it greater transparency, so businesses need to be honest in their dealings with the general public, and deliver on their promises to customers, or face the wrath of consumer action or risk being boycotted. Remember, integrity is simple to measure – one either has it or doesn’t. There are no degrees of integrity.
2. Don’t cut your rates to win business, sell quality harder
We’re often tempted to discount our rates, thinking it will win us more customers and drive growth. The reality is that absorbing the costs of a rate cut, means something else will need to get cut, and more often than not, it is the level of service that gets compromised. Sell quality harder – it’s the differentiator that sets your business apart from the others, and what clients value more. By the same token, if you are operating a bloated business model, look at putting in measures to make it lean.
3. Relook your business model and adapt to service the current climate
Knowing how to successfully navigate changes, and develop appropriate and effective processes to stay ahead of changing customer needs, new competitors and evolving technology, is critical to the success of a business operating in today’s environment.
Quite often, the solutions can be discovered with some introspection. The results from internal self-assessments are often completely opposed to the current business model. Yet organisations fail to implement change because it may mean letting go of certain clients, loss of revenue, downscaling etc.
4. Don’t reinvent your business – keep your identity and play to your strengths and make sure you have real differentiation
As technology continues to improve, businesses will be forced to adapt according to their customers’ ever-changing demands and expectations. But, in times of uncertainty, all a business could need is realignment to its true identity. It’s easier and more cost-effective to focus on the purpose of the business – why it entered a market in the first place – and to play to its strengths, and play them well, rather than trying to re-invent itself. Although in some extreme cases, this is what some businesses have had to do.
5. Lastly, business leaders should always ask themselves the following:
How can you help your clients to make more money, save more money, better use their resources, achieve an optimal balance of risk and reward, boost revenue, and enhance their market offering?
While resilience and being optimistic play a part in driving growth when business confidence is low, seeing potential and finding and exploiting opportunities are, as we believe, the real silver bullets.