Creating value in an economic recession

The world is currently going through an economic downturn and the symptoms of the recession are being felt all around the globe especially in the developed economies. As expected, most developing economies are experiencing the “cold from the sneeze” from these developed countries since we are heavily dependent on them through inflows, trade, and technical support among others.

As an organisation, we need to look deep into ourselves and harness the potential in our world to create value for ourselves, businesses, nation and continent by challenging the status quo and effecting the changes or innovations required to ensure survival and growth during these hard times.

We all need to purge from our individualistic and self centred approach in doing business and adopt a more win / win mentality in creating value. These are relevant in all areas of our lives from the regional level to government, to private sector, our communities and households among others. Value can be created as follows:

By trading and exchange of resources such as goods, services, technologies, ideas and time with the basic philosophy that you can give out something which involve a low cost or value to you currently but which have a high value to the other party. Africans in general have the tendency to keep everything they have even if the current value has diminished or could be better exchanged for a much more pressing need. We all need to undertake a self audit deep into our systems and access our current portfolio to determine what constitute a dormant resource and look out for partners who will value then to effect the necessary exchange or trade in. On the other hand, we can also source for goods, services and ideas which others can give to you that will cost them little but which have great value to you or your system. I believe we can learn a lot from soccer clubs and administrators in Europe and other developed jurisdictions on how they acquire, off-load and swap players depending on their needs and financial position at any point in time. They are very good at trading and exchanging players and managers when the time is ripe and they do it so professionally that you might wonder whether they are trading in human beings. Internal trading or exchange of resources within an organisation can also be encouraged on the micro level to achieve the same purpose. We must take a cue from them and trade off our excesses.

We need to change the focus of our nation, businesses and organisations through negotiations by focusing on the bigger picture instead of narrow minded and myopic outlook, for example, negotiating a longer term contract with suppliers and external stakeholders which will give them stability while giving the purchaser a better price. Alternatively, it could involve paying an account more promptly in return for a settlement discount which will be more valuable in returns than the cost of the early payment. Fostering mutually acceptable partnership arrangements can add value to our businesses to satisfy our collective needs and aspirations in the short and medium term.

We also need to be creative and innovative by thinking outside the box; for example seeing the business negotiation not as a linear process whereby parties fight for an outcome somewhere between “A” and “B”, but instead choose to be creative in looking for tangential solutions, such as “C” which will serve out collective interest. These exploit other avenues to create value without necessarily sticking to ones exclusive agenda. The whole wide world is bigger than any continent, country, business, organisation, community or household and we have to be creative and innovative to provide for ourselves during these trying moments. These go to support the quote that “necessity is the mother of invention” and thus let us invent throughout this recession.

Revaluing and recycling dormant resources are some of the many measures we can undertake to contain the situation for now without committing to fresh expenditures. We don't have the luxury of incurring or engaging fresh resources and thus need to fall back into our stores or reserves to do with what is available for now. Dormant and spare inventory, human resources, production capacity, intellectual property, customers among others could be temporary traded to our mutual benefit.

The global financial crunch is still with us and we have to live with the effects for now until we pray for God's intervention. However until that time comes, we have to proactively look deep down in ourselves to trade more than ever (even if barter trade), focus on the bigger picture or out of the box objectives, be creative and innovative with our products, services and ideas as well as applying value to dormant resources. These can cushion us during these hard times whiles we all patiently wait till the situation improves.

Credit: Sam Buabasah
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