Business leaders across the world are familiar with one thing: risk. Organisations are typically established to provide solutions to an observable or anticipated need either for a niche audience or for the mass market with significant potential to scale.
Implicit in the establishment of any business entity is the expectation to make profit. In truth, any organisation whose executives are not constantly preoccupied with how to maximise investors funds, increase shareholders value, provide good returns for employees’ time while contributing sustainably to society’s advancement will soon find itself at the mercy of legal tussles with investors, irate consumers and unforgiving regulators.
The risks an organisation face can be complex yet unique to its industry, country of operation or as in the case of the COVID-19 pandemic, all encompassing. As the world battles with a pandemic that seem to be have been better anticipated and managed in its country of origin, organisations have had to review their crises management strategies, scenario mapping and stakeholder engagement protocols.
Where traditional B2B organisations did not traditionally require engagement policies for B2C channels, COVID-19 stripped the veneer off businesses and exposed the humans behind the brand. Erstwhile limited use of social media platforms for consumer and brand engagement for businesses in this category became the main medium for communication between organisations and its various stakeholder as people grappled with the implications of staying away from their coveted offices for months on end.
Think about it: three years ago, for many organisations around the world informal communication channels such as WhatsApp and Telegram were unacceptable mediums for formal communication. If you wanted to be taken seriously, then you had to send an email – in a particular way, following certain acceptable standards.
Evidently, there is now significant flexibility regarding what is considered formal communication channels and proactive organisations have since updated their internal communications policies to reflect these changes to mitigate against potential risks arising from use.
In 2022, there yet remains other areas that business leaders must pay attention to in order to avert latent crises which will disrupt business operations and ultimately impact profitability.
1. Talent Emigration and the Great Resignation –
From Brexit in the UK to the mass exodus of African citizens to more economically friendly countries in the West, organisations are beginning to feel the pangs of talent shortage. Add this to the COVID-inspired realization by employees that they do not have to be physically present in an office building to earn salaries, the acceptance that ‘life’ is the more important half in the work-life balance debate, and the freedom to explore new possibilities outside the limiting expectations of job specifications and KPIs – and you come up with most frustrating challenge of any business leader: hiring and managing staff.
For many African countries, and Nigeria in particular, 2021 witnessed what is now being described as the fourth wave of middle-class emigration from the continent to Western countries. It is safe to conclude that the middle class in Nigeria, for instance, was not wiped off due to worsening economic factors occasioned by questionable economic management, but that in fact, the middle class simply emigrated.
In 2022, organisations will experience a fierce battle for talents. Already, we are witnessing the tussle between traditional brick and mortar businesses and technology-led businesses as the latter deploys interesting strategies to woo talents away from the former.
The winners in the talent war will be organisations who have carefully nurtured a culture of innovation, demonstrated a desire to support employees to achieve personal growth objectives, a deliberate open communication line from workers to management that goes beyond redesigning partitioned offices to open plan spaces, and willingness to include remote work as an option for the ambitious and restless Gen Z talent.
Gone are the days of management-approved stoic employee silence on digital platforms and non-attention to amplifying internal ambassadors.
This is the time to fully engage internal communications and human resource teams as they must jointly work to make organisations more humane, friendly and conducive for work. Hopefully, these roles are available and have access to management in your organisation – and the team members are not planning to emigrate as well!
2. Increased Citizen Advocacy and Activism Online –
Earlier in January, I wrote about the impact of citizen advocacy in Kenya and how it literally forced a review of the supply chain processes for KFC Kenya. It is 2022, and citizens are coming to the full realization of the power they have to direct the affairs of their country from the keypads on their phones and other mobile devices.
From the Twitter-led #ENDSARS protests in Nigeria in 2020, which were subsequently highjacked by sponsored thugs, that led to an estimated N1.5tn economic loss, to the global shock of a world forced to watch as the life was snuffed out George Floyd by state-empowered agents and the resulting impact on DEI policies of organisations, to the resignation of founder and former CEO of CrossFit Greg Glassman after his ill-advised tweet in 2020 caused massive public outrage online – the results are the same: citizens are the newest regulators on the block and the conscience of politicians and organisations alike.
In Africa, porous regulatory requirements and weak legal systems have aided the circumvention of policies that protect the interest of the country for the benefit of citizens. As in the case of 11-year-old KFC Kenya where the retail franchise operator imports its potato fries from Egypt despite potatoes being Kenya’s second most important food crop after maize with the sector employing over 2.5 million people.
Citizens called for a boycott of the brand and insisted that the retailer takes its business to the country where it imports potatoes – “if you don’t consider our products good enough to buy, then we don’t consider our money good enough for you” essentially.
As more organisations and their processes come under the microscopic scrutiny of citizens who can now engage both their governments and brands directly without the censorship of traditional media outlets, business leaders must proactively audit their processes to ensure they are operating in line with national regulations; proactively communicate its efforts at sustainable initiatives – now is definitely not the time for false modesty; become more sensitive to language use as they engage online – continuous executive communication coaching is required for leaders to become conversant with the nuances of digital engagement; increasingly simplify internal communications while accommodating the ever-present risk of confidential information leak; and embrace people-focused policies in all interactions.
3. Politics and Economic Instability –
Between 2017 and 2022, there has been eight successful coups in the west and central African region. These military take-overs of erstwhile democratic nations are not unconnected to the alarming yearly increase in but under-reported security challenges besieging the region.
Elections will hold in key countries on the continent between 2022 – 2024 which will usher in new economic focus as is consistent with African leaders’ historical culture of non-continuity.
All these point to a crucial undercurrent for business leaders: alliances are fluid and economic disruptions can happen without warning.
In Africa, citizens are becoming poorer with 21 out of 25 poorest countries in the world on the continent. This reality will require dexterous agility from businesses for product adaptability while simultaneously providing a fertile ground for ponzi businesses that promise unrealistic returns, gambling, and other get-rich-quick scams.
There is a worrisome high-risk appetite for investments which is historically trailed by disappointed investors who lose their savings to such schemes. All of these mean that certain businesses will thrive but it also means that citizens will become aggressively vocal and unforgiving as more of their savings are lost in these ventures.
Legitimate businesses will face pressure to provide more for less, and will be at the receiving end of severe backlash from irate customers and citizens when mistakes are made or losses are recorded.
Add regulatory and compliance risks as more countries introduce taxes and new levies in an attempt to increase government income as in the case of the sugar tax in Nigeria; the expected financial pressure as customers become poorer and the pivot to sachetizisation of both products and services; ESG issues and the burden on organisations to pivot to sustainability-led ethical profit-making operations and the Net Zero carbon emissions by 2050 Paris agreement: there are many areas that crises can arise from if organisations fail to identify, analyse and mitigate against such these forseen circumstances.
2022 is the year that business leaders must surround themselves with specialist consultants who have practical knowledge of the domestic environment where their businesses operate and global insights into the interdependence of the global business economy.
This year, audits must go beyond assessing the financial and operational functions in organisations and extend to functional internal and external assessments of the preparedness of units and departments to confront the challenges that the year will bring.
About the Author:
[NB: This article was culled from Tolulope Olorundero’s LinkedIn Newsletter]