admin
THE first quarter of the year has come and gone, and this is the period when auditors are at their busiest as they audit the 2014 financial statements.
Numbers never lie, or do they?
Most companies are in the process of interrogating whether their revenues rose or fell from the year-ago period.
It is fundamental for companies to also know whether they managed to make a profit or a loss, including how their current assets stake up against their liabilities.
These are the questions shareholders and investors are usually interested in.
Recently, CBZ released its financial statements to the market, and market watchers believe that it is still as healthy as ever regardless of the challenging economic environment.
The chairman’s statement was particularly as insightful as it was incisive.
“We believe that a business built on good governance is more likely to succeed over the long term. Given the volatile environment, the board has continued to be vigilant in managing key risk areas,” read part of his statement.
He also identified good corporate governance and prudential risk management as key components of an evolving business.
Clearly these two critical factors are important if a business is to achieve good results.
If a business continues to apply short-cuts and using the same strategy that has not been working for a long period of time, then it will almost always achieve the same results.
It’s a no brainer that a farmer who does not till the land, apply the required fertilisers and chemicals and does not water the crops will mostly likely not harvest anything.
You definitely reap what you sow.
If you do not study well for exams, you will likely fail, and the same applies to business. If you do not study your business well and come up with vibrant plans and strategies, you will likely fail.
It is in your best interest not to be directionless in the way you run your business.
Most companies in Zimbabwe are resorting to retrenchments in order to realign their costs and increase profitability.
But are retrenchments a viable solution or we also need to increase productivity?
Every decision the board and management makes has a direct impact on the organisation: Its either it will make the company profitable or it will sink the company.
When going through the company’s financial statements, there is need to ask if management is making the right decisions. Strategy necessarily needs planning and needs to be implemented.
For one to understand how much results mean to any organisation, take the English Premier League, for instance. If the club manager is not performing as per required standard, they are relieved off their duties.
David Moyes, the former Manchester United manager who came highly recommended by Alex Ferguson, unsurprisingly lost his job after a string of bad results.
Firing him was not a difficult decision for the board.
This is a clear example of how results matter is some jurisdictions.
In Zimbabwe, there is a tendency of keeping non-performing directors and managers for a very long time, especially in parastatals. This is the reason these companies continue to be ailing interminably. The same strategy and formula will always yield the same result.
Its sad but true.
Zimbabwe is full of technocrats and very sharp individuals who justifiably play a key leadership role in the South African and Zambian markets.
Individuals such as James Manyika, a Director of Mckinsey Global Institute in America, and Strive Masiyiwa have proved beyond doubt that Zimbabweans have the capacity to be global players.
Companies should not fear making changes if satisfactory results are not achieved. There are so many talented individuals that are capable of driving companies to success.
It is in the best interest of companies and the country at large to start seriously incorporating capable young minds into boards to achieve desired results.
Youth brings a lot of ambition and energy, while old brooms have experience and wisdom. And this combination has the potential of creating amazing results.
It is pointless to continuously achieve bad results and hoping that a miracle will happen to change that situation.
Hard work is required.
A strong vision and strategy to achieve positive results and a great diverse team are also necessary. Do not be a boss who does not take advice from anyone.
Arguments and debates can be very healthy in a company.
A“YES” man can be very dangerous to a company as that person is capable of sacrificing efficiency for expediency.
There is crucial need for businesses to consider what financial results mean for their business.
If there are any changes to be done, there is no need to wait for something to happen before they are effected.
As Dr Philip Chiyangwa once said, “Do not wait as the world is moving”.
By the time you think of making positive changes to achieve positive results, it may be too late as the company may be in distress.
Taurai Changwa is an articled accountant and ACCA finalist. He is managing director of SAFIC Consultancy. He writes in his personal capacity and can be contacted at [email protected], Facebook page SAFIC Consultancy, and on WhatsApp number 0772374784
Online Reporter