Lessons from my coach: The customer will either make or break your business
When you are doing business, small, large, complex or simple, you must understand what trend is driving what the client will prefer tomorrow.
Over the course of this year, I have been privy to three job losses resulting from economic changes in markets served by Kenya based companies. One was a US service company supplying technical services, the other was a local business whose primary target is local consumers.
Whether you are the business owner or an employee in that business, you owe it to yourself to understand the fundamentals driving the world economics on the go. No one will share this with you on the 9pm news, but retrenchments and cases of businesses going under will be reported.
In the job market, advancement in ICT has driven innovation around convenience and efficiency, making it a huge business opportunity. Advancement in ICT is the third global trend and perhaps one that has the greatest impact on the other two.
It presents opportunities real quick, but takes away your bread even faster. Like a sword, it is a very good tool when faced with a situation where you need to defend yourself, but a real bad one when you get cut because you mishandled it while using it.
Way back in the late 80s into the early 90s, when my age mates were graduating from mid colleges and universities, the World Bank was selling the Structural Adjustment Programmes to developing countries, a bitter pill that if you did not swallow, government aid was cut.
Former President Moi, buoyed by his giraffe instincts, refused to give in for years, but while holding on, he did not prepare the nation for the emerging global realities and soon he had to accept and move on. What followed was the death of the coffee sector, tea sector, pyrethrum sector, maize and key agricultural sectors of the economy that had relied heavily on government funding to hide inefficiencies.
Once the government withdrew from doing private business, poor management was the first in the list to cause collapses. The business had not prepared for a competitive environment, having been covered for many years by regulations and quotas. For example, to this date, Kenya’s sugar companies produce sugar at almost the cost per kilo used to land it on your dining table from Malawi or Sudan.
Global prices moving freely in response to demand created new competition. Parts of the world that could not produce tea and coffee competitively responded to market forces and became significant sources of competition for Kenya’s coffee, tea and other agricultural produce, leaving the country to get value addition elsewhere.
Suffice to say that Kenyan tea is no longer the universal global tea blending option, and with that came down our prices. The global trend pushed by the World Bank was liberalisation of all sectors. It gave birth to globalisation, constant reorganisation by companies, growth in service sectors, a boom in entrepreneurship.
It spurred growth in outsourcing, the rise of the customer as the king who decides whether your business lives or dies, and more important, the rise of service sectors as the fastest growing sector away from manufacturing, which defines the industrial age. It also created increased competition, another major global trend, as small businesses begun to compete with conglomerates more efficiently.
The International Monetary Fund instigated liberalisation of all sectors, with the intention of encouraging private sector driven business, but it inadvertently pushed the speed of globalisation. Globalisation is the new trend riding on advancements in ICT to create a truly connected large market with no legal or physical borders. Today, even Somali, a desert country with no known sugar plantation on irrigation can export sugar into Kenya through Eastleigh.
When you are doing business, small, large, complex or simple, you must understand what trend is driving what the client will prefer tomorrow,
By Patrick Wameyo is a financial literacy coach at Financial Academy and Technologies, and an entrepreneurship coach at The Entrepreneurship Center EA. [email protected]
