OPEN ECONOMY: How good is corporate Zimbabwe?

OPEN ECONOMY: How good is corporate Zimbabwe?

Texas Instruments is an American company that designs and makes semi-conductors and sells them to other manufacturers of electronics goods. It is the second largest supplier of chips for cellular handsets and is the largest producer of digital signal processors (DSPs) and analogue semi-conductors.
Students may be more familiar with Texas Instruments’ line of calculators and geometry sets.
On October 21, the company made its quarterly conference call to analysts and investors.
By the next day, its stock price had shot up by 13,7 percent.
While Texas Instruments’ financial results had beaten market expectations for the quarter, the stock price rose specifically because within the conference call, the company released a Comprehensive Capital Management Strategy.
The CCMS had undeniable appeal.
It was a work of managerial genius.
The CCMS was a thorough breakdown of the company’s evolving business models in unique markets, its structural core competencies and product differentiation opportunities; this was all set to outline strategy for cash-flow management and capital allocation.
Overnight, what is typically a narrative of proprietary interest in a company’s shareholding had become one of national pride.
One prominent analyst wrote, “No matter the state of the economy or global competition, you simply cannot bet against the level of sophistication and perfectionism in American management.”
It should be easy to find multiple relating contexts of this corporate occurrence to the Zimbabwean economy.
Initially, we can ask if Zimbabwe can take similar pride in the kind of management found in corporate Zimbabwe.
On casual perception, that may seem a consideration yet to find relevance but recent events at Blue Ribbon, for instance, offer great evidence to how this has become the reality of the global economy.
If investors feel the need to come with their own management, do we have credible arguments to make in terms of quality local representation?
Can we vouch for our own management based on merit of proven excellence?
The aforementioned quote by the American analyst is particularly profound in that it emphasised management’s ability to prevail over the state of an economy or global competition.
It is now a predominant theme in corporate Zimbabwe to bemoan a tough economic environment and flooding imports.
Granted, those are very justified concerns; we have lost benchmarks on how a corporation’s success can be credited to management’s ability to overcome such challenges.
Perhaps we have settled to accept that Zimbabwean management is incapable of enterprising through a tough economy and global competition.
Evidently, it seems as if global investors are increasingly deciding to settle on that very presumption.
The truth is that investors frequently take a look at Zimbabwe. They physically come here or inquire through local points of reference.
Contrary to popular narratives advanced by enthusiasts of elevated political sensitivity but minimal entrepreneurial appreciation, it is not because Zimbabwe has political uncertainty that these investors decide to place their money elsewhere.
Instead, it is really because savvy investors are failing to identify true entrepreneurial managers in corporate Zimbabwe!
It would be ill-advised for corporate managers to hastily take offence to this deduction.
The same way policy-makers are removed from actual economic activity within the real economy, our corporate managers tend to make theoretically correct decisions that fail in the market as these executives are removed from actual economic activity in the real economy.
For instance, many of our corporate executives in the retail sector are making bad judgment calls that are only evident at the physical points of transaction.
A prominent clothing store in Harare’s CBD is currently selling a new line of men’s hats.
When you flip over the hats, however, you will find a pattern of flowers embroidered inside.
Zimbabwean men do not wear flowery clothes with pride!
Hence, these hats are not selling.
A grocery chain is committing to long term contracts with farmers. When the farmers do not produce sustained quality, sensitive consumers notice the inconsistency and decide not to buy.
Unfortunately, the retailer is locked into the contract regardless of quality.
These are cases of poor management.
Consequently, both companies are losing market share very quickly to new entrants, informal market participants and foreign business.
It is difficult to sympathise with these companies and other peers because at Buy Zimbabwe conferences the predominant view is to chastise the consumer, no cognisance of the bad management at play.
In other sectors throughout the economy, poor management manifests as low entrepreneurial aptitude.
Archaic and imitative business models are prominent in terms of marketing, distribution and product differentiation.
It is regrettable irony that we always put our front foot — that we are educated, literate and train a good workforce.
This actually perpetuates our culture of grooming rigidly obedient managers who passively wait on board direction and simply contain operations as per expectations of majority ownership.
While a flattering perspective can portray this as respectable stewardship and practice, a countering perspective can see this as a significant deficiency of visionary, curious, and innovative management competence.
I suspect that this is also why suggestions to create entrepreneurial incubators within larger companies are not well received. Entities cannot be expected to integrate and foster entrepreneurial ventures when they do not have such competency within their functional culture. Perhaps the most cynical deduction one can make of corporate managers in Zimbabwe is their propensity to blame politics for poor economic performance.
There is hypocrisy and disingenuous posturing here as a significant number of our executives actually leverage on political connections, patronage and regulatory support as their managerial competitive advantage in certain sectors.
This point can be further explored on a dedicated presentation.
Nevertheless, it is not all negatives that exist in corporate Zimbabwe.
We have had some wonderfully gifted corporate executives who have returned dividends, created new markets, and set admirable entrepreneurial precedence.
Perhaps we are failing in our mainstream economic discourse by not finding a balanced distribution of narratives between the macroeconomic analyses and evaluating the competence of corporate executives.
There would be widespread gains if we created space for executive evaluation. At its furthest reaching influence, hopefully one day we can be a country where tertiary business schools can trust local executives to be reference points in management studies.
Likewise, revered corporate executives would then feel a duty to contribute modules based on their globally competitive philosophies and managerial styles.
In the nearer term though, as we move into 2016, I hope that one of the clusters that we can strive to add into our investment promotion strategy would be to boast that Zimbabwe has globally competitive management! There is a conversation to be had: just how good is corporate Zimbabwe?

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