FESBC SHARES BUSINESS TRANSFORMATIONS

MBABANE – Even successful Eswatini micro, small and medium enterprises (MSMEs) and companies need to transform themselves in response to current or looming COVID-19 threats. 

The Federation of Eswatini Business Community (FESBC) made the call in a correspondence copied to this publication. The federation challenged Eswatini CEOs to adopt a mindset of restlessness and continuous change. 

“By following a clear methodology for transformation, starting even before the first day on the job, a new CEO can take the steps needed to make the company more adaptive and responsive, putting it on the right trajectory for success. The best response to external disruption is not playing defence. Rather it is embracing pre-emptive self-disruptive business across our kingdom,” stressed FESBC.

FESBC noted that during the beginning of this year, many Eswatini MSMEs and companies named new CEOs. In many cases, this was because shareholders or the board felt that the previous business leaders did not understand the massive disruptions facing their industries. “Locked within many industries due to continual technological change and the COVID-19 pandemic today, means that business leaders are being overtaken by their competitors at an unprecedented pace,” highlighted FESBC. FESBC said at any one time post COVID-19, about one-third of large Eswatini MSMEs and companies were experiencing a severe, two-year decline in their ability to create shareholder value. Within that group, one-third will fail to recover within the following five years. 

“Even Eswatini MSMEs and companies that are current industry leaders are vulnerable to disruption post COVID-19. 

And even the new CEO or business leader of a top-performing company needs to watch over his/her shoulder for and transform the company in anticipation of the next disruption, for it is surely coming. 

In other words, if the company isn’t broke, fix it preemptively anyway,” stressed the federation. Many new Eswatini CEOs, according to FESBC, were coming in with a mandate to transform the company—including its strategy, business model, organisation, operations and culture.

FESBC shared that it helped Eswatini companies execute more than five transformations and currently it is working with more than 50 Eswatini companies on medium-scale transformation programmes. 

Among that group, two-thirds have a new CEO in place.“We also recently conducted an extensive quantitative survey analysis of transformation performance among large Eswatini companies. 

The good news is that changing CEOs increases the odds of success.

 The bad news is that new CEOs, particularly those hired from outside the company, also show a wide range of success in leading business transformations,” shared the federation. Through the correspondence, the federation summarised the best practices from its direct experience and analysis and offered new CEOs an evidence-based approach for developing and implementing successful business transformations in the country.

“CEOs must continually balance short- and long-term objectives. An incoming CEO faces immediate pressure to deliver top-quartile performance in the company’s core business, in many cases, through short-term improvements. At the same time, the new CEO must reinvent the business model, enhance product and service offerings, and invest in other long-term initiatives. The best CEOs can do both. 

identify

“Eswatini CEOs must quickly reset investor expectations. Within six months of taking over, new CEOs need to evaluate which parts of the business are still viable, identify the most urgently required improvements, and determine where the company’s future growth lies. They must not only develop a strong plan including potentially painful measures to restructure, sell or close legacy businesses but must also communicate this plan to their investors,” said FESBC.

There is a call for Eswatini CEOs to develop a clear purpose for the change effort. At any given time, in this post COVID-19 era of always-on transformation, companies reportedly have multiple initiatives underway, which can be exhausting for people in the organisation as they cope with constant change. 

‘Eswatini CEOs must adopt agile and digital methods to drive change. To get breakthrough results fast, while inspiring and engaging employees, business leaders should adopt agile approachesfor example, mapping customer pain points, establishing cross-functional teams and establishing new ways of working, such as two-week ‘sprints’ obstacle boards and minimum viable products. At the same time, they must leverage digital technologies to improve the customer experience and simplify workflows,” advised FESBC. 

transformation

Among the key findings from the analysis is virtually every Eswatini company needs a transformation post pandemic. “Roughly one-third of the companies we analysed had faced a sharp decline (more than 10 percentage points) in total shareholder return (TSR) over any two-year span. 

Within that subset, one-third had deteriorated even more over the following five years. 

The clear implication is that most Eswatini companies need to transform at least once during any five-year window. And given the fact that transformations are multiple-year endeavours, they inevitably overlap,” highlighted FESBC.

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