My last visit to Nairobi was right after Brexit. As everywhere else, this was a major topic of conversation. In a casual chat with a group of CEOs, we talked about the uncertainty that the British move has created, and we went on discussing other factors that create uncertainty.
I ventured that African companies may be at advantage relative to Western ones. Being used to compete in instable environments with sudden regulatory changes, they develop strategic agility, and are better at adapting to sudden change.
One example: Computer Warehouse Group (CWG) started in 1991 as a reseller of computer equipment. The business grew to sell hardware, software, and communication systems. In 2010, the Central Bank of Nigeria banned the use of ATMs outside bank branches. CWG’s ATM sales fell off a cliff: from $35 million down to $0. The company was at the brink of disappearing. However, CGW was able to shift their strategy and corresponding business model from an IT provider to an enabler of IT operating in the world of cloud computing. By 2013, the company was listed in the Nigerian Stock Exchange.
Environmental change is a constant in business. Adaptation should be in our radar screen permanently. But it’s in the presence of sudden change that strategic agility – to use a term coined by Yves Doz from INSEAD – proves critical. It’s on the basis of agility that companies that operate in instable environments can outcompete established companies that move slowly.
The CEO of a Nigerian real estate company told me once: “They call us cheetahs.” He referred to how quickly they are in making business deals. But he could as well have referred to how quickly they adjust to changing circumstances, like the CWG story illustrates.
How can companies develop strategic agility?