by the Lionesses of Africa Operations Department
Our thoughts currently go out to all our incredible and inspirational Lionesses and indeed all business owners in South Africa as we see the terrifying impact of riots, looting and destruction of property. More than 800 retail shops have been looted, more than 200 shopping malls have been looted, damaged or destroyed, and in KwaZulu Natal, it is estimated that goods worth between $400m and $1bn have been stolen or destroyed. To see Lionesses who have had all their hopes, dreams and aspirations stolen from them is heartbreaking. How can one prepare for such events - indeed if one could even afford it, how many insurance companies even offer insurance against this?
This got us thinking and we remembered the Arab curse: “May you live in interesting times”. It is a curse because what people need and especially businesses, is certainty. Certainty that tomorrow things will be (roughly) the same and we can continue with our plans and build our businesses. Uncertainty of course is what anarchists and coup leaders (and the SA President has said that this was ‘instigated’ here) want and so we looked at what it takes to disrupt countries to such an extent that businesses cannot trade, and how (if at all) that can be mitigated by our Lionesses in the years ahead. Governments too think of this and run ‘war-games’ whereby they imagine what they would take out first if they were a foreign power attacking, to see and then to ensure more security around such essential areas.
In the ‘old’ days, the first place to go with invading land troops would be the TV and Radio centres and we still see that in coup attempts across the globe. But as we have seen in the past year, it is possible to do far more by just hitting the essential areas and the bottlenecks will do the rest…
There was the February storm that took out vital petrochemical plants in Texas, creating plastic pellets for the world’s plastic manufacturers (Mother Nature reminding us of her power). The FT stated (here): “Texas petrochemical plants hit by last month’s Arctic blast have still not returned to full capacity, threatening months of disruptions to the global supply chain for chemical raw materials critical to everything from cars to medical equipment to nappies. The outages, which have now stretched for four weeks, are disrupting manufacturing operations from the American south to the UK and raising prices for vital plastic inputs around the world, fuelling worries about inflation.”
Many of us in manufacturing will have seen the increased price and long delivery times in pallet wrap, shrink film and bubble wrap over the past months. These three are the most used by many to safely secure and ship their products and so price rises and supply disruptions in these have created serious problems, just because of one storm in one area…So much for certainty and well thought out budgets!
Soon after, Russian based hackers successfully closed the Colonial Pipeline delivering up to 45 per cent of oil consumed on the east coast of the USA. In one move cutting the ability for east coast companies and businesses to operate freely - there goes the budget again and with it certainty!
This was followed by the Suez Canal incident where a lone ship the ‘Ever Given’ managed to severely disrupt global shipping simply by getting stuck. We are still not quite sure why the Captain decided at that point in the canal to practice his 3-point turns, but he won’t be doing that again in a hurry…How can you plan for that?
Then shockingly in the past few days we have had in South Africa a collapse in the rule of law bringing with it looting, burning and destruction of property and of businesses, again mainly in one area - Durban (although there was looting in parts of Johannesburg and elsewhere). Attacking this one area which controls the major ports of Durban and Richard’s Bay supplying Johannesburg and other main inland cities overnight emptied shelves. Most of the companies use the N3 motorway to take their goods to Johannesburg, which was also attacked with over 40 lorries lying burnt out by the side of the road and is for all intense and purposes at time of writing, closed. In addition SA’s largest oil refinery closed citing the unrest. So Petrol and Diesel have also evaporated fast and yes with it what all businesses need - certainty.
We have driven many times the N3 from Johannesburg to Durban and in one particular area one can see historical tyre burn marks in the tarmac and often bricks and rocks that have been either thrown or placed to disrupt traffic in the dark of the night. It is an open secret that if you close this artery, Johannesburg is severely impacted.
Indeed talking to some Lionesses, they all seemed to tell us the same thing, that the primary objective seemed to be supply chains and infrastructure. Fuel plants, transport, ports, water sources, food supply, communications (4 radio stations and 133 cell phone towers also targeted). Looting of shopping malls and destruction of businesses quickly followed.
Obviously such a break down in the rule of law shows us instantly where supply chains lack security and resilience. Luckily such issues in most countries are relatively rare, but perhaps this will concentrate our minds, because even if you don’t expect riots, looting and gratuitous destruction, we mentioned other major areas of which we have to be very aware.
Mother Nature is increasingly showing us who’s Boss as she fights a rearguard action against Climate Change. As reported in the UK’s Guardian here: “The intensity and scale of the floods in Germany this week have shocked climate scientists, who did not expect records to be broken this much, over such a wide area or this soon. After the deadly heatwave in the US and Canada, where temperatures rose above 49.6C two weeks ago, the deluge in central Europe has raised fears that human-caused climate disruption is making extreme weather even worse than predicted.”
Secondly, given the entire world runs on software, as we pointed out above, hacking and malware will become all the more prevalent even for non-strategic companies, so these are both areas with which we all must concern ourselves. As we have said many times when faced with such situations, let us ‘hope for the best, but prepare for the worst’.
So don’t forget the basics.
Check your insurances - there have been many reports of Insurers pointing to their small print recently to get out of paying for say, Riot induced looting etc., but we have also seen occasions when flooding was not included (if your business is in an area called ‘Flood Plain View’ and that view is now all concrete - be very concerned!). Whilst we are shocked by such stories from the Insurance industry, sadly it is the same the world over. Read the small print - if an insurance is cheap it is probably cheap for a very good reason…
Please back up your data and keep a copy off site (‘the cloud’ simply refers to a server outside of your business to which you can back up, so let’s not get too technical, but there are some very good free ‘cloud’ based ones). Keep your anti-virus and anti-malware software up to date (all the top ones provide constant upgrades that keep you secure against the latest attacks).
Talk to your suppliers, where are they based? Near at hand, or many miles and oceans away? Can you find a supplier closer? In addition, many top multi-national businesses having previously insisted on a central buying program with a central warehouse to feed all their businesses ‘from the Mother Ship’ in various countries, are now very insistent that their companies look to local suppliers. Time to dust off your business cards and go knocking…maybe you’ll pick up a new customer as well!
We also constantly hear of situations whereby Lionesses having rendered a service or provided goods to a 3rd party have to wait significant amounts of time before being paid. When payment comes it is almost always begrudgingly paid and often surprisingly, larger firms are the worst culprits.
Just as, if not worse, is when Lionesses have these issues with Governments not paying. Seriously?
The RSA Treasury Regulation 8.2.3 states: “Unless determined otherwise in a contract or other agreement, all payments due to creditors must be settled within 30 days from receipt of an invoice…”. We looked many times at this and throughout the full Regulations and could not see anywhere written: “…or until or if you feel like it!”
Are we missing something here?
We wrote very early on in the 'Covid Era’ in article for the Lioness Weekender 'Coronavirus - Hope for the best, but prepare for the worst’ (March 15 2020 here - what a long time ago that was!):
“…You have time to put emergency measures in place now and that starts with ensuring your company survives. Many companies will go out of business because they cannot get cash in through the front door fast enough to pay their suppliers, workers, freight costs, rental or even tax. Many western governments are putting in place huge measures to support their SMEs, but we cannot rely on all governments doing the same. Far better as business owners to ‘hope for the best, but prepare for the worst’.”
Luckily many Lionesses followed our call (or maybe they were just sensible and saw for themselves that Cash was their Oxygen during this time, either is fine by us obviously), but it shouldn’t have to be this way. SMEs are the lifeblood of all economies. Of course we all marvel at Sir Richard Branson shooting to the stars as Melanie mentioned this week in one of her morning blogs, but the reality is that it’s not the superstars that drive the economy (although they certainly do their bit in employment and taxes) but it is the SME sector that is the essential cog for any economy and a lifeblood for employment, especially amongst the youth. With youth unemployment sitting at 57.47% (here) in South Africa in 2019 (no guesses as to where it is now sadly), and just as bad in other African countries, Governments across Africa must look to seriously and meaningfully support their SME’s.
While we wait for that realization to sink in and with such uncertainty all around us, living as we sadly do in such ‘interesting times’, we must lean on areas where we can be certain.
One area in which you can be absolutely certain is the support that comes from the Lioness community. Lean on it, learn from it, and as we have often said, be brave and contact others in your community, across your country or even (as we have seen many times) across Africa - say the magic words: “I am a Lioness” and opportunities will be opened, advice will be forthcoming, there will always be an ear willing to listen and a shoulder to lean on, even to cry on if necessary.
That is the power of the huge community to which you belong, with over 1.3 million Lionesses across Africa.
You are not alone.
Stay safe.