by Lionesses of Africa Operations Department
We have often warned in the past of cold winds rushing across from the West towards Africa. With one foot in the UK/EU and one foot firmly in Africa we have been lucky enough to see early the impact of various events in both regions and have been able to react quickly to warn our membership. Just in the last few years we have had articles at the early stages of Covid when we saw the tragic events unfolding first in China and then in Italy; and then when businesses rushed to go online, when home deliveries became the only answer, when the supply chains started to clog up, when the US yield curve inverted, when the war started in Ukraine and when inflation started to rear its ugly head. How we respond to such events define our lives and our businesses for many years, but (and this is why we send out these warnings) to respond early or to plan for such events gives us a massive advantage.
If we are able to respond in a nimble fashion, early and with a plan, usually (usually – as there are no guarantees in life), we not only survive, but move ahead of the competition and out into the sunlight earlier. We have previously used the analogy of those cyclists who pull away from the pack as the climb up the mountainous road becomes steep, allowing them to free wheel with a clear road ahead when they move over the summit and back down the other side, thereby increasing their lead further – tough times are no different. Opportunity for some; pain, sorrow and horror for others.
Amongst the many issues hitting the globe currently, the world is fast moving away from a ‘free cash’ environment into a high interest rate world (at least for the foreseeable future). The knock on from this we are already seeing across Africa as the US$ becomes stronger, increasing dramatically the price of all imported goods (and of course petrol and diesel) whilst tightening the noose around our African countries’ borrowing and foreign reserves. This is also impacting investment into Africa as the lake of cheap US$ dries up. One could argue that interest rates in most countries of Africa have always been high, so what is new? One could argue that currency reserves have always been tight! One could also argue that as a block, Lionesses have never had to worry about interest rates on loans when so little lending has reached our ‘bootstrapping’ world (little wonder if as the World Bank confirm the average collateral for loans in Africa sits at a huge >200%) although, these all will still impact our lives dramatically. One could also argue that this offers fabulous opportunities for investors as Lionesses are not weighed down by huge and now expensive debt or massively overinflated valuations – more on that in a future article!
Sequoia Capital, a Venture Capital firm with assets under management of around US$85 billion (plus loose change) recently produced a presentation to all the founders of the companies into which they had invested, entitled ‘Adapting to Endure’ (here) where they announced this for the globe was a ‘Crucible Moment’. They opened this presentation thus:
“We believe the current market environment is a Crucible Moment that will provide challenges but also opportunities for all of you. Many legendary companies are forged during challenging environments as competition thins, real businesses get built and the opportunity for innovation is seized by those who see it.”
So how do we ensure that we are the ‘some’ who grab the opportunity, not the ‘others’ who get lost in the ‘pain, sorrow and horror’? That we are the ones in the words of Sequoia, ‘who see it’?
First – planning is everything!
In the paper ‘Plans Are Worthless but Planning Is Everything: A Theoretical Explanation of Eisenhower’s Observation’ by Contreras, Ceberio, and Kreinovich (here) they point out that: “US President Dwight D. Eisenhower emphasized that his experience as the Supreme Commander of the Allied Expeditionary Forces in Europe during the Second World War taught him that “plans are worthless, but planning is everything””.
How can that be?
As they say: “At first glance, the Eisenhower’s observation sounds paradoxical: if plans are worthless, why bother with planning at all?” …and who are we to disagree, yet his point is valid. By making a plan you have to first recognize the problem (‘I am constantly being beaten by my competition’ or ‘if electricity load-shedding continues I shall go out of business’) or potential problem (‘my business relies on a supply chain that relies on a railway system that is rife with bribery and corruption’) or even global problems (‘my factory is in Lagos and the sea level just keeps on rising…’ (having seen the floods first hand, this is a serious issue)). By recognizing the problem this in itself is a massive step towards becoming nimble, being able to respond quicker when the problem actually hits, but to make a plan for such an eventuality moves you to a whole new level of preparedness. Will the plan be perfect? Of course not, there are so many variables –
The floods arrived, wiped out our warehouse but also the warehouse we had as a potential backup…and we have a 40 foot container heading our way from Apapa Quays…Panic? No. We now know we need a warehouse of these dimensions (having considered many alternatives), with access to the motorway, able to take a 40 foot container and have the team already here with us at the appointed place…and…and… (meanwhile our competition 3 blocks down are just reaching for their gumboots…). This is why, the people who built the plan are the best people to have around when things change, when the ‘fog of war’ descends, or ‘events’ in and around your business starts to take over any and all concentration. This is the moment when your plans change, but you will know where you are on the map and where you want to be, it is just the solution that needs to be fine tuned.
Secondly, we have to get our people behind us. We wrote recently (here) about truly involving your Team to “…voice hunches, concerns, doubts, or intuitions that would otherwise remain dormant”, you can then work with your management team to remove the chaff from the grain, to take seriously that which you believe to be a potential threat.
Will this make your team or even your company as a whole pessimistic and downhearted as they start to see threats and problems behind every bush? This is where your leadership takes on a whole new level and another paradox appears.
The Stockdale Paradox:
“You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.”
Admiral James Stockdale, who said these words, certainly lived that belief whilst a prisoner of war in Vietnam for seven-and-a-half years during which time amongst his fellow prisoners the realists survived (he being one), whilst the optimists who truly believed they would be released soon, perhaps by Easter, perhaps by Christmas…, slowly died of broken hearts and lost hope as yet another year passed.
This pinning of hopes on an event or rescue that may or may not come is so dangerous.
The Harvard Business Review (‘HBR’) say in their article ‘The Crucibles of Leadership’ (here) that there are certain qualities in a leader that allows her to not only cope during tough times, but also to learn from them whilst guiding the company and employees through the fog and into the light, or up over the mountain onto the clear roads beyond.
These are:
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“The ability to engage others in shared meaning.” As we always say as Lionesses, it is far better and certainly far stronger to go together – bring your team around you in this shared vision, mission, meaning.
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“A distinctive and compelling voice.” The ability to cut through the fog and explain clearly issues and routes out of problems.
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“A sense of integrity (including a strong set of values).” As we always say, this is the basic of requirements required in running a business and leading people.
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“[B]y far the most critical skill of the four is what we call “adaptive capacity.” This is, in essence, applied creativity—an almost magical ability to transcend adversity, with all its attendant stresses, and to emerge stronger than before. It’s composed of two primary qualities: the ability to grasp context, and hardiness.”
‘Grasp context’, quickly and easily. To see the issues that concern, the rocks and boulders ahead in the river and to forge a path around into safer waters. This also involves great skill and empathy in dealing with people. All great leaders have this as a super-skillset.
‘Hardiness’ the ability to push through the pain on the mountain without losing hope. Hope of course that has to also be passed onto our employees when all seems dark. No one said leadership was easy!
All of this comes together in the well known saying, ‘Hope for the best but prepare for the worst’. This preparation, this planning for the worst is the essential first start in the process to become aware, ready and nimble. Leaders who have a plan are followed far better and for far longer than those who wing it and make it up as it happens.
Once the plan is formulated, problems and issues that previously would have broken the back of the organisation or created huge negative energy within the employees (and ourselves), often become great opportunities – and that is where we want to be! We have a plan, it may not be perfect, but it is a plan that allows us to move forward with intent, rather than look back with regret.
As Sequoia stated to all the founders of their companies:
“We believe this is a Crucible Moment, one that will present challenges and opportunities for many of you. First and foremost, we must recognize the changing environment and shift our mindset to respond with intention rather than regret.”
Stay safe.
