I was at the Latitude 15 Degrees Restaurant last week sharing notes with a group of American Fund Managers monitoring the performance of the economy. One of them was gravely concerned about the country’s operating environment: ‘Looks like I would not win at the moment if I invested in Zambia,’ he said while sipping his soda. ‘There are just too many odds that do not favour businesses to thrive. I am a fiscal deficit person, and am worried the continued deficits will hurt any investment.’

The indicators point to gloom ahead of us. All economic indicators are not business friendly: high government debt levels and a significantly huge chunk in domestic debts. Once this debt is in arrears, it hurts business. Inflation levels are pointing towards the double digits. This means the buying power has significantly been mutilated. Those who produce price sensitive goods and services may suffer the most because some costs such as those from electricity tariffs will not easily be passed on to the consumers.

The national budget to be announced this week does not give much cheer either: the economic growth projections will certainly be gloomy. Businesses thrive when the economy is on the momentum of expansion. Economic growth itself means companies are investing and producing more goods and services. When we project low growth, companies are investing less and growing at very low levels. In any case, we know 40 percent or more is earmarked to creditors abroad. This is money we have already consumed.

This story of a depressing economy is not new to the Zambian businesses. Many of them have endured hard times in past many years. For example, farmers have been borrowing money from banks at astronomically high interest rates but still been able to get their chin up the sky. Zambian businesses have endured tough competition from well financed foreign companies, some of them flooding goods into the economy. There are companies that are marginally on a life drip; keeping employees they can hardly pay; daily contending with bailiffs from statutory bodies. We have, somehow, mastered the art of scrounging for survival even if it be by the skin of the teeth. How have we done it?

NETWORKS: We are a community that believes in sharing. We embrace a strong bond within our networks to give business to one another when confronted with tough times. This means Zambian business can be the answer to its own problems. Those who win tenders, even international tenders, tend to channel opportunities to others to provide goods and services. There can never be a business stand still because Zambia is in a global economy. Those that have markets outside Zambia will bring the money home and still share the earnings through the value chain. In other words, as long as one business will remain standing under the economic dire straits, we should rest assured the money will circulate to water the rest.

STRATEGIES: When the going gets tough, businesses usually respond by changing their strategies. I know many Zambian businesses that are currently reviewing their strategies to reflect the changing operating environment. One business we consulted for recently decided to refocus the purpose of the business. He told us, ‘This is the time to cut off what does not work for us. We were just into too many things and we cannot continue to have divided attention.’

For two days, we focused on answering the simple questions, ‘What business are we in? Do we have a competitive advantage in it? How do we compete under the circumstances? Do we divest the business, merge it with other businesses to develop the level of resilience or even acquire other businesses faltering? How do we develop capacity among our staff to perform differently given the challenges and opportunities ahead of us?’

These are serious questions that some forward looking businesses in Zambia are answering. This is not the time to be sentimental about your products; it’s time to be realistic about what works and does not work.

This is not the time to be sentimental about your products; it’s time to be realistic about what works and does not work.

LEADERSHIP: Great business leaders emerge during tough times. They say necessity is the mother of all invention. Business leadership builds confidence across the business. It is about strategic thinking. Strategic thinking is identifying, imagining and understanding possible future operating environments for your organization. Great business leaders read the environment very clearly and take timely action. They adapt, reflect and generate new business transforming ideas. This is how some businesses in Zambia have remained resilient under tough economic times.