Death of the Average - Why Your Company Must Proactively Look Inwards To Sustain Itself.

Consulting and Advisory
Death of the Average: Why Your Company Must
Proactively Look Inwards To Sustain Itself.
It must also be said that the profitability (ROI) and productivity index of
an average staff (per head) in a few random sampled “Grade B”
organizations in Lagos, Nigeria has in so many years dropped so badly
(back-to-back) that it is looking much like a broken record “year-in,
year-out”. This brings to bear that an Organization (big or small,
corporate or well-organised private sector -SMEs) is only as good as
those behind its’ vision and mission and general operation, be it at the
frontline, back office, or at the management strata.
Augustus Hall Limited (RC. 912580)
www.augustushall.com

3
Death of the Average: Why Your Company Must Proactively
Look Inwards To Sustain Itself.
Introduction
The New Economy here in Nigeria is harsh, with lots of uncertainties. For most corporates
sourcing businesses (or repeat business) are scares and even if available the “order- to-
cash” cycle takes so long. Coupled with high cost of running business in Nigeria which is
ranked among the first 7 Countries in Africa, characterised with poor electricity supply,
bureaucratic (rigid) land use policies, lack of basic infrastructures, poor and mostly un-
administered Government policies, poor access to banking facilities and services (hence,
poor access to free “international” trade and exchanges), revised (constantly somersaulting)
Domiciliary Account Holding policies, tight control of Foreign Exchange management in
“sixes and sevens”, bureaucratic bottle-necks, lengthy protocols in business registration,
currently increased electricity tariffs, removal of subsidies on petroleum (even though its’
prior existence was never felt, benefitted from or noticed), and all other scarce means or
resources to essential business promotion, welfare and growth; while some has resorted to
downsizing which has now been seen as an annual culture and still looks to be un-ending
(due to huge staff strength and high operational over-heads) while for most SMEs it’s a
question of survival of the fittest.
If I May Ask, How Do You Do?
Whether you may “be fine” or “not fine”, we must always note that the first Law of Nature is Self
Preservation. As a corporate or business entity, now where do you stand in all of these episodes?
If you ask me, the New Economy has birth the death of the AVERAGE. This simply means that for
you to survive and be relevant in the new dispensation (whether as an individual since this would
also create intense job delivery competition within co-workers and exacerbate work place power
tussles, job position lay-offs down the hierarchy of which only those personnel lagging behind in
performance will fall victim) you must be BEST at what you do, and more so you must be
exceptionally innovative, result oriented, value driven, and creative, ability to multi-task and be
inward looking so as to re-create value and hence sustain profitability in all spheres.
Your service delivery, existing systems and all deliverables within the value chain must be well
perfected and orchestrated. As for the AVERAGE corporates, or companies or any other entity
within the real sector, the age or the era of the “AVERAGE” is gone.

4
It must also be said that the profitability (ROI)
and productivity index of an average staff
(per head) in a few random sampled “Grade B”
organizations in Lagos, Nigeria has in so many
years dropped so badly (back-to-back) that it
is looking much like a broken record “year-in,
year-out”. This brings to bear that an
Organization (big or small, corporate or well-
organised private sector -SMEs) is only as
good as those behind its’ vision and mission
and general operation, be it at the frontline,
back office, or at the management strata.
This takes me be back to the subject matter of
this article once more, as you can’t dress-up
an old woman (an operationally lagging firm)
to go to war, irrespective of the military kits,
apparatus, apparels, resources and arsenals at
her disposal; hence this simply means that you
must:
1. Re-View (Inwardly),
2. Re-Haul (Re-Peal),
3. Re-SWOT (Re-Strategize),
4. Re-Fix (Re-Vamp),
5. Re-Align (Re-Position),
6. Re-Orientate (Re-Learn Objectives),
7. Re-Select (Re-Team),
8. Re-Develop (Re-Innovate e.g. Departmental Vision and Mission)
9. Re-Prioritize (Re-Manage by Objectives),
10. Re-Start (Re-Serve).
As it is most companies would need to be very strategic and proactive in the new business
environment, and as a result of this it would drastically call for strict attention on these 3 Cardinal
points listed below:
1. Strategic Human Resources Selection and Management
a. Flexible/Multi-skilled
b. Critical Talent
c. Gaps Analysis
d. Mindset Paradigm (as mindset of staffs 5years ago may have weaned or simply may
not be the same needed to do today’s task which makes up a “critical mass”; hence a
new paradigm is needed)
2. Strategic Cash Flow and Financial Management

5
3. Strategic Business Development (Re-Modelling) and Operational (Turnaround)
Management
“Who Moved My Cookies”
In line with the aforesaid, I would choose to only analyse and emphasize more on the second
cardinal point above as it relates to Strategic Cash Flow and Financial Management. I strongly
advice that Companies must tackle bad debt (or to further say; performance risk, default risk,
payment risk, and any other nature of credit risk) or risk becoming another failed company
statistic.
It must be well spelt out that most “outwardly-looking-good” companies and their suppliers are
facing massive financial pressure due to the current economic climate.
According to a Survey in Nigeria, most sectors
such as the Construction, Manufacturing, and
other Service oriented firms and without
leaving the SMEs have fallen at the fastest
pace for two and a half years in the last
month. Indeed problems in the construction
and manufacturing sectors (to mention just a
few) are being cited as some of the key
reasons why the unemployment rate in
Nigeria was seen to have sky rocketed; hence
the Economy fell back into recession at the
start of 2012 and till date these mentioned
sectors begging for bailouts.

6
To make matters worse businesses in the construction, manufacturing, and other service oriented
firms in the various sectors are waiting longer than any other sector to get paid by customers,
waiting on average 72.2 days to be paid. With more and more construction, manufacturing, and
other service oriented firms’ projects being shelved or “mothballed” due to current financial
insecurity, and tight cashflow, only the fittest will survive and remain profitable; hence, we are
urging businesses in the construction, manufacturing, and other service oriented industry
everywhere to undertake a full credit review and overhaul of internal credit processes to ensure a
successful future and avoid becoming one of the above statistics.
“We have seen a massive 55% increase in
enquiries from businesses in the
construction, manufacturing, and other
service oriented industry and from “selected
few” associated trades such as support
service businesses seeking to recover unpaid
debts and overdue accounts. Many problems
could have been averted by companies
reviewing and overhauling their internal
credit control procedures. By making simple-
changes such as how and when they grant
credit and reviewing how they chase unpaid
invoices, a company can boost cash-flow and
drastically reduce it’s bad debt provision.
Most importantly having a specialist
knowledge of how the construction,
manufacturing, and other service oriented
industry works including the collection of
authorised extras overspends and unpaid
retentions is essential to get the cash flowing
back into your business”
Key Areas to Review Are:-
 How credit limits are set and monitored
 Internal dunning cycles and collection strategies
 Terms and conditions of trading
 The early use of third party debt collection agencies to resolve problem accounts
 Choosing a collection agency experienced in dealing with construction, manufacturing, and
other service oriented firms’ disputes and the ability to negotiate, and mediate.
 Liaising with financial organisations

7
 Processing payments and allocations
 Reconciliation of accounts and accounts analysis
 Developing strong relationships with customers
 Timely collection of outstanding debts in a high volume environment
 Dealing with debtors, securing payment plans, finalising matters and accounting to clients
 Outstanding invoices for goods and services supplied by wholesalers to the retail industry
 The recovery of unpaid hire invoices in the plant hire / construction industry.
 Dealing with debtors, securing payment plans, finalising matters and accounting to clients.
 Last in all of these, is having a STRATEGIC REVIEW of your current CREDIT POLICY to sync-
in (synchronize) with the new business environment.
At this juncture, we should also have it at the back of our mind that all hope is not lost, as the new
business environment would simply usher in a much stronger and vibrant real sector driven
economy, with a well diversified “non-oil reliance” Economy. This will bring with it the New
Enterprise, value driven establishments
and with standards raised above the bar
(status-quo).
Lastly, The Nigerian Government’s current
attempts to help develop the Nigerian
Economy towards been more of EXPORT
(Value) ORIENTED than the current
IMPORT (deficit) ORIENTED which seems
to be the norm for decades. More so, this
EXPORT (Value) ORIENTED thinking would
directly enhance a well diversified and real
sector driven business environment; hence,
boosting productivity, trading and
profitability do not go far enough and
business owners need to ensure they do everything they can to help themselves.
Roughly on an average now (as at the time this article was written – Jan. 2016), the Naira exchanges
at a N285 to $1 US Dollar, although it may be debatable in some quarters that this may not
represent true international value of the Naira, but it is very important at this new era of our
economy to allow the Exchange rates to be flexible (i.e. to be driven by the forces of demand and
supply) rather than the Government always trying to manage it.

8
This could also be achieved by having proper management of Nigeria’s resources and expanding
productive base.
To make it worse the Central Bank has also revised their Bureau De Change – BDC policy, which
now states that the Central Bank will no more source FOREX for the BDCs anymore, so the BDCs are
left on their own to now source (do the home run) for their stock in trade.
Lastly, we need purposeful Leadership in all spheres to drive home the real objectives our existence
be it in Government, or in the organised private sector. Looking inward to survive will yield
numerous returns (positive returns) and further boost GDP. But to avoid asking the question –
“Who moved my Cookies” - yet again after the whole dust must have settled; we must be courteous
and Re-Strategize and be Re-Sourceful.

Death of the Average - Why Your Company Must Proactively Look Inwards To Sustain Itself.

Recommended

Recommended

More Related Content

What's hot

What's hot (18)

Viewers also liked

Viewers also liked (19)

Similar to Death of the Average - Why Your Company Must Proactively Look Inwards To Sustain Itself.

Similar to Death of the Average - Why Your Company Must Proactively Look Inwards To Sustain Itself. (20)

More from Augustus Hall Limited (RC.912580)

More from Augustus Hall Limited (RC.912580) (20)

Death of the Average - Why Your Company Must Proactively Look Inwards To Sustain Itself.