South African business is facing a perfect storm of challenges, with the sociopolitical turbulence of the recent election colliding with economic pressures such as a narrowing budget deficit, rising interest rates, slow global markets, and the acceleration of Chinese influence. Gloomy? Well, it needn’t be…
Chief executive of IC Growth Group, Dr Grant Sieff, says that in this chaotic environment, organisations that are able to think on their feet will find new opportunities for growth.
Sieff, who is also course convenor of the Strategic Thinking and Execution for Growth Programme at the University of Cape Town Graduate School of Business (UCT GSB), describes the current environment as “economic anarchy ... it’s not a slow evolution, it’s more like a series of shocks – more shaken than stirred,” he says.
The ability to respond appropriately is determined by an organisation’s willingness to think on its feet, Sieff maintains.
“The nature of business is that it is in constant flux. However, rather than be intimidated by this, business leaders need to see opportunities to innovate and get ahead. Only executives who have the ability to think strategically and execute strategies to ensure ongoing growth in the face of uncertainty and change will prosper,” he says.
“It is crucial that in every moment one is thinking strategically,” he adds.
Sieff has spent years perfecting an approach to surviving and thriving in times of uncertainty and change, and says that there are several simple things executives can do to enhance their resilience and success.
Firstly, he says businesses should put the frameworks in place to enable them to question each day, and what is going on inside and outside of their operating environment. “Look at what is relevant, and what might have changed from yesterday,” he says.
Secondly, they should ensure they are able to identify and capitalise on gaps that they see during this process.
Filling the gaps
“Question your vision and what the stretch goals are to get from where you are today to where you need to be a year from now,” he advises. “If you can’t see any gaps you are probably being too complacent,” he says.
Once they have identified the gaps, Sieff says business leaders can decide which they want to capitalise on to place themselves ahead of the competition. And the last step in the process is to act – decisively.
“There is no substitute for courageous leadership. Business needs leaders who are present enough to take advantage of a situation as it arises. Leaders need to move away from the static grand strategic plan toward a more fluid and flexible strategic practice,” he says.
The Strategic Thinking and Execution for Growth Programme is designed to give delegates a set of practical tools to develop their strategic practice muscle, including how to assess their current and future operating environments and shape strategy accordingly.
“We come up with strategies by engaging in changing circumstances and linking them to our objectives,” says Sieff.
The programme attracts a range of organisation leaders, as well as middle and senior management from across Africa, making it a truly African programme that is able to engage specifically with what it is to survive and thrive in an African context.
State of flux
But what, really, is the ‘state of flux’ in which business finds itself all about? Sieff says ongoing change is being experienced in both the internal organisational environment and in the external operating environments.
“As a result, our current strategies are always in danger of falling out of alignment with customers’ changing needs. In other words, there are always gaps between what we currently do and what we could be doing to optimise alignment. These gaps are potential threats to the organisation if it does nothing about them (competitors will step into the gap) or opportunities if leadership identifies the gaps early and innovates to fill the most important gaps. No organisation can aim to do everything for everyone, given invariably limited resources”.
Innovation is important, he says, because it potentially slows competitors down, meaning they have to learn new ways of operating in order to catch up.
Examples of organisations which have successfully addressed the challenges of change, says Sieff, include:
BM – which moved from hardware to services, to a third, lesser-known ideas business, which supports the other two major business divisions.
Discovery – which reinvented the industry economics of medical aid services with a focus on wellness through its Vitality programme, and then applied its model on wellness very effectively with Discovery Insure, incentivising motorists to drive safely.
Outsurance – which redefined competitive advantage in short-term insurance.
An example of an organisation that did once successfully address the challenge of change, but is now floundering in the face of the new wave of change, is Nokia, says Sieff. “From a brilliant transformation to mobile phones from the forestry industry in the 1970s, it lost its way in the smartphone market,” he says.
He believes South Africa has world-class leaders making a positive – and in some cases transformational – difference in the country’s economy. “Perhaps business, particularly the executive teams of large publicly listed organisations, need to lead the way for other sectors in espousing and living leadership values: hard work, innovation, listening, honesty, integrity, service, trust, developing others”.
Sieff says there is no substitute for courageous leadership. “To me, courageous leadership is all about embracing the principles of innovation. In the words of strategist Gary Hamel, this involves constantly looking for ways to exceed customer expectations; redefine, change and thereby improve the industry economics; and find ways to change and improve the basis of competitive advantage.”
He says he is increasingly being called upon as a management consultant and strategist to work with organisations in different parts of Africa, and this is a privilege and an education because there is so much diversity across the 54 countries and many more cultures on the continent.
“I have in the past year worked across all four regions of the continent, north and south, east and west. From my recent experience in South Africa, Senegal, Nigeria, Sudan, Kenya and Tanzania, it is clear to me that we have a lot to learn from each other. On the Strategic Thinking and Execution for Growth Programme, we will consider the African business context, and we are likely to have with us, as delegates, senior executives from other parts of Africa other than South Africa.”
He says there is much well-justified optimism about Africa’s growth prospects. Many countries on the continent are at peace, and getting on with the business of infrastructure development and growing their economies. Discoveries of gas along the east coast are helping to fuel growth, and sub-Saharan Africa has one of the highest economic growth rates as a region, and this is forecast to continue for many years.