Businesses in Kenya are clearly hurting and a number of theories have been fronted; “a wait and see” attitude by both consumers and investors, uncertainty in the political environment, among others. This, however, doesn’t exempt businesses from making sure they see out a difficult season; there are still employees to be paid and customers to be served.
It is therefore now that managers must learn more than ever to succeed in a world where volatility will remain high. From a management perspective, a few stratagems can work.
Following the 2008 financial crisis, a lot of companies were forced to adjust to a dramatically different business climate. According to stories appearing in business dailies and magazines then, Starbucks is a good example of a company that pulled itself out of the 2008 financial meltdown by aligning its operations with customer demands. Because of its widespread print, especially across the Americas, it was hard hit by the global financial crisis of 2008.
After the 2007/08 crisis, Howard D. Schultz returned as CEO of Starbucks after a gap of eight years, replacing Jim Donald. Under his leadership, Howard D. Schultz spearheaded “My Starbucks Idea”, which enabled customers to have a direct link with the company’s headquarters.
Soon Starbucks’ ubiquity became an asset as customers from around the world had an opportunity to connect with each other, spawning like-minded communities like the ‘free Wi-Fi group’, ‘soy group’, ‘comfy chair group’ or ‘frappuccino lovers’. By giving customers a platform to voice their ideas and views on the brand and by responding to it, it was able to reignite the brand trust and weather a difficult time.
After the oil price collapse, which began in June 2014 and triggered a wave of cost reduction among upstream businesses, global oil and gas companies slashed capital expenditure by about 40 per cent between 2014 and 2016.
As part of this cost-cutting campaign, some 400,000 workers were let go, and major projects that did not meet profitability criteria were either cancelled or deferred within a very short time of the price collapses.
The actions were swift and immediate. These steps, combined with efficiency improvements, are beginning to bear fruit for the industry. A growing number of projects can break even at oil prices in the high $20s.
Since taking the helm of the Barclays 18 months ago, Jes Staley, has been shrinking back Barclays geographic reach to concentrate on London and New York. According to Staley, Barclays’ offloading of its Africa business is a further step in plans to restructure the bank as he shifts its focus to investment banking.
In Kenya, amid the rise of online banking and thinned margins in the wake of the rate capping law, Barclays Bank of Kenya announced the closure of seven branches across the country, effective October, in a move to save costs.
Whatever form a crisis may take, business leaders should develop a swift response approach. They should understand that there is a common approach to responding to a severe, franchise-threatening crisis, regardless of its origin.
Contributors from Deloitte Risk and Financial Advisory seem to agree that at the strategic decision-making level, the crisis leadership skills required to respond to a cyber breach are the same as those needed for a chemical spill, a bribery scandal or a regulatory violation.
For many of these above scenarios, company leaders are expected to improvise and learn to adapt to the alternate universe that a crisis brings, and quickly so.
This means thinking strategically even when surprise is a factor; it means acting decisively in the face of time pressures. Add the challenge of sorting through misinformation or simply not having enough facts on hand, and executives face a dilemma.