BY JEDIDAH NGUYO
The last three years have not been easy on business owners in Kenya. Even before the country could recover from the Covid-19 pandemic, a global recession hit that caused the Kenyan shilling to weaken in value against the dollar, a trend that is still ongoing with no end in sight. The uncertain political climate in the country has not made things easier either. Statistics indicate that several foreign businesses have exited the country in the last two years. Some of the reasons cited are a volatile political climate as well as a difficult business environment due to taxation measures which some foreign business owners have found punitive.
The remaining local and international businesses have had to contend with these challenges and new ones which include demonstrations by Kenyans protesting the high cost of living, which have been the norm for the better part of this year. Unfortunately, even though the protests were originally meant to be peaceful, they are often marred by chaos, destruction of property and looting. As a result, business owners have resorted to closing down their businesses on days when there are demonstrations. Companies have been forced to ask their workers to stay home on such days for their safety. Unfortunately, a lot of money is lost on such days. A few days ago, the association of manufacturers in Kenya released a statement in which they reported that the three-day weekly demos had cost them about six billion Kenya shillings. The demonstrations especially disrupted the supply chain and made it impossible to transport both raw materials and finished products. Of course, any prospective foreign investors have also been scared away by the same.
There was great hope that the government and the opposition could reach an agreement to solve the underlying issues through diplomatic means. Unfortunately, even the much-anticipated talks between the two parties seem to have hit a standstill. The current political impasse does not inspire much confidence in the economy which is already struggling. In such an environment, business owners and managers face the difficult question of what to do next. While there might not be a lot of options to explore, there are still a few things to try.
Now more than ever, businesses should be on top of their game when it comes to strategic planning. One of the tools used for strategic planning is the SWOT analysis which helps businesses understand the threats and opportunities in their external environments and the strengths and weaknesses in their internal environments that can influence how they respond to the threats and opportunities. Good business leaders must by now have a plan that cushions them should the demos go on. Some of the measures to take might not be pleasant but good management includes even taking and overseeing the implementation of those unpleasant measures for the greater good in the long term.
Needless to say, times of political crisis also call for calm and composure in business leadership. This is what keeps them from making mistakes that could make the business situation even worse. During times of crisis, business leaders have a responsibility to communicate with their clients, suppliers and even shareholders. The style of communication can determine the future of a business in terms of its relationships with its stakeholders. As a result, leaders must think carefully before releasing any communication.
Business leaders also have a role to play in terms of advocacy and lobbying. Businesses form a big support system for the country’s economy. This gives business owners a bargaining tool with the government. At times like this, business owners, through their various organizations, can request sit-downs with the government where they can express their worries and concerns. Even though dialogue seems like a long shot at the moment, trying never hurt anyone. Who knows, such dialogue might yield results that may stabilize the economic environment for businesses to go back to normal operations.
Companies and employers also have a responsibility towards their employees, especially in times of great economic hardship like now. Business leaders must try to the best of their ability to support their employees in navigating the times, especially through honest and transparent communication when there are any changes to be made that may affect them. Another way to offer support to employees is to show empathy and to create a safe space where they can express themselves.
One of the lessons that businesses can learn from the ongoing political unrest is to embrace innovation. Innovation does not always mean adopting new technology or introducing new ideas or lines of business. It can mean looking for ways to upgrade already existing business lines and operations to increase the resilience of a business, thereby increasing profitability and reducing costs. Innovative businesses always have a backup plan for when things do not go as planned.
The political situation in Kenya has no doubt affected the environment within which businesses operate. While some entrepreneurs have closed down and left the country, others have chosen to push on. For the latter group, a lot of losses have been experienced and for some, their existence is threatened. Businesses that will survive the tough economic and political times are those whose leaders know how to take on the reigns of leadership during political crises. Such leaders will need to show innovativeness, aggressiveness, calm composure, and foresight; and they will definitely reap the fruits
Jedidah nguyo is a writer Management Magazine
