New Ideas for Africa to boost growth

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This article first appeared in my column with the Business Daily on May 15, 2016

Last week I attended an event organised by the University of Pretoria Gordon Institute of Business Science (GIBS) titled Africa Economic Outlook 2016: Strategic Thinking in Complex Times. The one day conference articulated issues facing the continent and provoked questions that I think ought to be asked. I took great interest in a presentation by GIBS Dean Professor Nicola Kleyn which addressed issues in management as I have seen numerous shortcomings in management in the region. Previous research in which I participated pointed to key gaps in management in East Africa. For example, we found that for senior management, while there was consensus there is competence in hard/technical skills such as finance, HR and operations, important management gaps exist in areas such as ethics and integrity, managing ambiguity, and soft skills.

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(source:http://novatechservices.com/wp-content/uploads/2016/02/ManagementLeadership.jpg)

Kleyn’s presentation provided ideas on how to manage effectively in complex environments such as Kenya where factors such as lack of a functioning legal system or ethnic competition make effective management difficult. She argues that six attributes can enable companies to effectively manage and thrive in complex environments; I will only address the three in this column.  The first attribute is that a spirit of enquiry must be encouraged where organisations encourage a culture of questioning their approach because without such questioning, more effective approaches cannot emerge. Embracing humility is also key, and this particularly resonated with me because in Kenya there seems to exist a ‘big man complex’ where hubris immediately accompanies one’s promotion to a position of power. Kleyn argues that, especially at top level management, a spirit of humility must persist rooted in an openness to learn from junior staff and even those in the field who may not be as technically qualified as management. Such humility again, allows innovations and insights from unexpected corners to percolate thinking in management in a constructive manner.

The third is a willingness to experiment (again and again). Again here I looked back at what my previous research on management gaps had highlighted: the general inability for managers in East Africa to manage in an environment of change. A key element of addressing this is by managers having an openness to experiment (within reason) and try new ideas until the best fit emerges; and a willingness to change the model when the environment changes again…and again.

Why is this important? Well because, management affects productivity. The World Bank acknowledges that although that there are differences in productivity on the Kenyan landscape, more effort is required to boost productivity such that economic growth is more sustainable. Effective management is a key element of making this a reality. The question for Kenya (and Africa) then becomes how thought innovations such as those elucidated above can be adopted by firms. Do we have a culture that accommodates thought disruptions that challenge current management practices?

Another presentation of interest was by Professor Lyal White from GIBS who shared the Dynamic Markets Index 2016 (DMI). The Index broadly seeks to measure competitive performance of countries through the evolution of their institutions or institutional reforms and looked at 144 countries of which 39 were African. Basically the DMI asks, do institutions in countries such as Kenya create a dynamic economy that thrives? The GIBS DMI measures looks at six pillars between 2007 and 2014; the first pillar is Open and Connected which looks at indicators such as trade policies and the movement of people. Second is Red Tape with indicators such as corruption perception. Third is Socio-political Stability with indicators such as civil liberties and political rights. Fourth is the Justice System which looks at indicators such as the time and cost of enforcing contracts and director liability. Fifth is Macroeconomic Management with indicators such as state debt burden and monetary stability. The final is Human Capital with indicators such as demographic energy and skills levels. All these pillars are weighted differently and create a score between zero (worst) and 200 (best). In the DMI Kenya scored 72.45 and was classified as an adynamic market due to factors such as terrorism, high corruption perception, political instability in 2007/08 and poor performance in the justice system; all these resonate with me.

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(source: http://www.travelstart.co.ke/blog/wp-content/uploads/2014/05/Nairobi1.jpg)

Although the DMI has shortcomings such as not factoring the informal economy into the index, having to contend with incomplete data sets and, for Kenya, not factoring in (positive) shifts due to the new constitution, it starkly highlighted country shortcomings. So the question is, how can Kenya and other African countries) consider issues raised by the DMI such as areas in which countries may have regressed?

Anzetse Were is a development economist; anzetsew@gmail.com

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