The Business Daily’s sister publication the Saturday Nation published an article titled “The crucial management lessons in Kodak’s decline” on Saturday, October 5, 2024.
In it, the author and former Laikipia Governor Nderitu Mureithi gave an obituary of Eastman Kodak, which was the largest photography company in its golden days.
I will not retell Eastman Kodak’s demise but the cause of death was the multinational corporation’s inability to change with the times. It remained with the traditional photo business when the world was gradually moving to digital photography.
On the contrary, American conglomerate 3M tells a different story. 3M began as a mining company (Minnesota Mining and Manufacturing Company) in 1902 but by the late 50s, it had pioneered manufacturing the first asthma inhaler.
From its mining history, 3M has diversified to healthcare and consumer goods and those old enough can remember the iconic 3M floppy discs.
From the above examples, we have two companies, one dead and one thriving. Their fates have taken different paths because one embraced change while another did not.
The above examples are important, especially for Kenyan Small and medium-sized enterprises (SMEs), which have operated in what management consulting lingo refers to as a Volatile, Uncertain, Complex, and Ambiguous environment over the last few years.
The Covid-19 pandemic was followed by the prolonged electioneering period, the worst drought in 40 years, and the worst flooding since the El Niño floods of 1997, and before businesses could recover the Gen Z protests followed.
These headwinds hit businesses amidst a raft of policy changes including increased taxation, which have made a challenging operating environment harder.
For instance, the electronic Tax Invoice Management System (eTIMS) is mandatory for businesses. Non-compliance can lead to significant financial penalties or loss of business. Many businesses find eTIMs complex and time-consuming.
It gets worse. Businesses have had to budget for costs related to the Affordable Housing Act and the Social Health Insurance Act, both of which became operational in 2024.
In short, it is not business as usual because we are constantly operating in an environment where one event can trigger a series of disruptions that can deliver a death sentence for your business. This is not being an alarmist but realistic.
One of the questions that we at SNDBX ask our members is what would they do if a new law came into place and technically closed their business e.g. a new tax that made their product uncompetitive or the government removed protectionist measures? Would they adjust or close shop? Luckily, we have experiences of SMEs that have adjusted their sails to the changing winds.
PTG Travel, Wandia Gichuru, Pochi Pay, and SNDBX are examples of Kenyan businesses that have diversified their offerings, expanded into new markets, and developed innovative products to remain competitive. Their strategies include building premium products, targeting specific markets, and leveraging technology to reach customers regionally.
I must also add that if we think Africa-wide, we can leverage on the big opportunities that the African Continental Free Trade Area presents.
These were the conversations we had with SMEs when we gathered for the Big Baraza, an annual convention for small and medium enterprises. In essence, we sought to explore how businesses can adapt and build resilience for the future.
This year’s theme is not only prescient but follows through on last year’s theme, which asked provoking questions on what can we do to ensure that enterprises outlive their founders. Building upon the lessons from last year’s focus on long-term business sustainability, we’re now advocating for proactive measures that enable rapid adaptation to unforeseen challenges.
As SMEs gathered for the 2024 Big Baraza, we emphasized the urgent need for businesses to become more resilient in the face of disruptions.
The more prepared a business owner is for potential disruptions, the better equipped they will be to handle them. Because as we have seen, disruptions are becoming the norm and not the exception.
The writer is CEO of SNDBX International, a Nairobi-based aggregator of professional services for SMEs and startups
