by Lionesses of Africa Operations Department
Marc Andreessen of the massively successful Tech investment fund ‘a16z’ likes to joke that the best thing about startups is that they “only ever experience two emotions: euphoria and terror. And I find that lack of sleep enhances them both.” (See here).
As we move from being a start up (which for investors is all about ‘promise’) into delivering on our dreams and we build our business into something more solid, it changes for investors from this ‘promise’ into the need for them to see ‘performance’. However, these extreme swings in emotions as so eloquently stated by Marc stay the same, all that changes are that the intervals of time between them lengthen.
That’s during normal times, but as the new World Bank President, Ajay Banga in his closing speech at the recent meeting in Morocco warned: “Never has humanity stared down a set of problems so complex and severe — that our very existence is in question.” (here) With comments like that and to see the news darken further hour by hour across the Globe, we know that there is no way the time intervals between ‘euphoria and terror’ for our businesses will lengthen - they will instead be crushed - think far more 'short wave’ than ‘long wave’ frequency.
So how do we make it through this very volatile period - because that is exactly what this is, an extended period of volatility, and as we pointed out last week (here), an extended period with higher long term interest rates across the world. Make no mistake, this is gonna be tough. Indeed since our article the Financial Times, Bloomberg and many other news sources have published pieces on this including warnings on government debt levels becoming unbearable in Kenya (as the latest of African countries where large debt levels are now impacting their ability to finance essential services across their countries).
Indeed in 2015 the IMF judged that eight countries in sub-Saharan Africa were in debt distress or at high risk of it. Zambia defaulted in 2020 but by March 2022 the IMF’s list had grown to 23 countries who were at severe risk of default. According to Bloomberg and visualised brilliantly by Visual Capitalist (here), of those across the world most likely to default, Ghana comes in at number 2; then Egypt (5); Kenya (6); Namibia (10); Angola (12); Rwanda (14) and South Africa 15th…a total of 12 African countries in the top 24. If your country has oil or gas then life will be better as these are priced in US$, but if not, expect the worst including severe restrictions on the amount of foreign currency you can purchase from your bank (Nigeria we heard recently is capped at $30k).
To make matters worse, Africa’s growth is expected to slow down to 3.2% in 2023, which for many countries means that the economy is not growing fast enough to create jobs for the new youth joining the workforce… And we are not even going to mention the effects of Climate Change on so many African countries - we all know, see and feel the impacts already.
At times like these, with so much to worry about, and dark clouds hitting our economies and communities, if we are not careful we end up rushing around doing more and more, putting out fires left, right and centre and lose the ability to run our companies.
Jack Ma said in the ‘Looking for Africa's Business Heroes - Documentary of the 2019 Africa's Business Heroes Competition’ (here - time 14.32) in answer to a question on how he avoids burn out from our very own Christelle (here):
“You have to know how to prioritise, otherwise it is impossible to survive.”
This is absolutely essential for any entrepreneur, yet in normal times (and we are not living through ‘normal’ times) as we grow, employ and expand, we also forget about the dangers of doing everything ourselves, forget about the dangers of not prioritising. Instead we take everything on ourselves, rush after anything that looks like it might be a deal, and worse, dive after anything that might unravel our best laid plans.
Ultimately it’s all about controlling the controllables, as Melanie wrote this week in one of her GML Blogs (here):
“If you read or watch any news coverage right now, it seems like the world is again facing challenging times on so many fronts - from economic downturns, to conflict, to political upheaval, and climate change repercussions. At times like these, staying focused amidst the chaos and uncertainty is crucial for success as entrepreneurs. When everything feels hectic around us, it's essential that we prioritize our efforts, maintain our focus, and establish a clear direction for everyone in the business to follow. I have always found that by getting laser focused on what I can control rather than what is outside of my control, is the way to navigate such times…By staying organized, setting clear goals, and maintaining our discipline, as business owners we can thrive amidst the external chaos and achieve the success we desire.”
Controlling the controllables, starts with what you know you can control, then with the rest hope for the best, but plan for the worst. This also involves your middle management and wider team. They must know that they must be able to tell you bad news early - you cannot afford to have any surprises. Of course mistakes can happen (we are only human), but with your knowledge and experience you will possibly recognize a serious issue way before your team does, however this does not mean you have to step in and solve it. Delegation is essential at these times.
In the engine room (Finance/Operations, etc) this means you must tighten up the processes that run your business. These processes are where control is essential. Again, this is not necessarily something for you to do, but middle management must ensure that the process, the ‘engine room’, is not something that can be a sudden ‘Twister’ worry.
Lastly create a strong mental message for yourself, such as:
Do it, Delegate it, Dump it, or Diarize it, and encourage your management to do the same.