adminRENOWNED genius Albert Einstein gave a nugget in one of his most famous lines: “In the middle of difficulty lies opportunity.”
For local entrepreneurs, it couldn’t have been a more contemporary statement.
No doubt, the business environment in Zimbabwe has been very tough and challenging over the last two decades.
Problem solving in the face of great odds is what entrepreneurship is founded on.
The trouble is, success isn’t preordained. Only a whip-smart few get off their knees to storm to glory.
Over the years, those who study success models have been able to come up with templates on how leadership can help steer a business forward.
It has often been observed that some of the things that businesspeople do when faced with challenges include switching gears, going back to basics, cutting losses and knowing that the customer is the king.
A classic example of switching gears is the Steve Jobs Apple story.
In 1985, Jobs was fired from a company he had founded and it seemed like that was the end of him. Flash-forward nearly 30 years and Apple is the most valuable company on the planet with a market capitalisation hovering around half a trillion dollars.
How did he do that?
Jobs undertook three vital steps: sleeping with the enemy, shifting the paradigm and smashing roadblocks.
Jobs took a US$150 million cash infusion from rival Microsoft in exchange for rights to ship Microsoft Office and Internet Explorer on Macintosh.
He turned from Apple’s failing original vision of a computer-only company and began creating the cornerstone of the turnaround – iMacs, iPods, and iPhones.
At a time when conventional wisdom suggested shedding real estate, not acquiring it, Jobs opened Apple Stores, putting his products front and centre.
One may ask if what Jobs did can apply in Zimbabwe and if it can still work in this environment.
Indeed, it can.
For Jobs, innovation was the trump card. By diversifying his products and creating iMacs, iPods and iPhones, he turned around his fortunes.
In Zimbabwe today, few people know about Sangulani Chikumbutso, a local who has been able to build an electrical vehicle.
Despite economic challenges, there are people who are innovative and game changers in their own right.
If his skills are honed and he gets the resources he needs, there is no doubt Chikumbutso has the potential to become a billionaire entrepreneur.
This is exactly what is needed in Zimbabwe. There is need for more innovation.
In 1993, IBM made a US$8 billion loss. The business was in a mess and they simply went back to basics.
They brought in a new CEO. Under Lou Gerstner’s leadership, IBM shed businesses that had pushed it away from its core competencies and jettisoned redundant infrastructure.
“The last thing IBM needs right now is a vision,” said Gerstner, referring to his goal of getting IBM back to its former glory.
IBM set its sights on three areas: hardware, a business-software line, and lucrative IT services.
The ability to see a path, take decisive action, and simplify the organisation helped stave off the worst.
When you are a company which manufactures several products, to cut costs you can streamline the slow moving products and maximise on products which generate more profits and more cash.
The crisis that plagued General Motors in 2007 is another worthy example.
In 2008 and 2009, GM accepted a US$51 billion infusion from the US government to help during its reorganisation.
GM’s CEO Ed Whitacre tossed out much of the company’s underperforming baggage.
The leaner company trimmed stalling brands such as Hummer, Pontiac, Saturn, and Saab from its lineup. It also discontinued its electric-powered Chevy Volt.
GM emerged from bankruptcy in 2009 and in December 2013, the US treasury sold its remaining GM shares.
All General Motors did was cut its losses.
Lastly, as a company, do you understand your customer’s needs and do you understand your products?
A product that may do well in China may be a flop in Zimbabwe. The customer is king as that is where revenue is generated.
After an oft-criticised merger with Nextel Communications in 2005, Sprint Corporation, an American telecommunications company, was grappling with losses of around US$29,6 billion and a dwindling subscriber base.
But after Dan Hesse took over as Sprint CEO in 2007 and implemented a new “Simply Everything” campaign in 2008, the company’s fortunes began to turn. Combined with his marketing acumen and a laser-like focus on customer service, Hesse helped the company reverse its subscriber losses.
The company also diversified its services through acquisition of Virgin Mobile USA.
With that, Sprint moved into the prepaid market in 2010 and returned to positive subscriber growth for the first time in three years.
Clearly, we need decisive thinkers who can turnaround companies in distress.
Oft times, there is need to go back to basics.
Taurai Changwa is an articled accountant and ACCA finalist. He is the MD of SAFIC Consultancy and writes in his personal capacity. Changwa can be contacted at [email protected], Facebook page SAFIC Consultancy, and WhatsApp number 0772374784
Online Reporter