Tag: Impediments to growth

What’s holding back business? Covid Zombies, supply chain disruption & engine room entrepreneurship

Pavlo Phitidis identified 4 issue plaguing business owners and spoke to The Money Show about what to do about them. Listen to the podcast or read on

Rail to Road

On a recent journey along South Africa’s roads, particularly in the Eastern Cape, between Craddock and Port Elizabeth, Pavlo was struck by the incredible number of trucks trundling along, many transporting manganese, from north of Kimberly!

The roads are being destroyed, as they lie parallel to a railway line that is almost entirely empty.

 

Broken Supply Chains

Commodoties are booming right now, mining is booming, and the extensive net of industrial service businesses that supply and support these mines are struggling – to find steel, a key raw material to support mining activity.

Pavlo spoke of a large fencing business owner who he spoke to, who was desperately trying to find steel, to preserve his business.

This business owner had a strong sales team visiting customers, leaving them with R80 – 90million of business that they couldn’t service! And he was terrified that his clients would find someone else who could find steel somehow.

Pavlo’s advise to him was to put the customer at the centre of the decision. This business owner insisted that he needed the raw material to manufacture the fencing in South Africa, because to import the completed fencing material eroded all his profit on the deal.

Pavlo’s point is that at times like these, when you risk losing customers, and demand for you service could dry up, rather take the hit and do whatever it takes to fulfil the promise that you made to your customers.

When steel does become available again, at least you will have a customer base to work with, to build up your profits again.

Rather make no profits for the next 6 months, and hold on to your customers. It will also keep your sales team busy and motivated.

 

COVID Zombies

In the first 6 months of lockdown, staff went home and all of a sudden found themselves incompetent.

They had moved out of a workplace environment where staff would interact with their colleagues, bouncing ideas and problem solving together. When they were out of their context, they couldn’t do it.

For managers it showed up that they had been measuring performance on activity – being on site, attending meetings etc, rather than output.

Many companies needed to digitize their HR – communications and productivity software, which created great apprehension among many staff who weren’t sure whether they were being spied on, or micro-managed, or misunderstood why they were being monitored in a new way.

 

Engine Room Entrepreneurship

The shock of the lockdown brought leadership from the ‘bridge’ down to the ‘engine room’ where they were back into day-to-day matters, putting out fires and managing their apprehensive staff far more directly.

The crisis here is that new opportunities – and there are many that have come with the changes that Covid brought – are hard to see from below the decks.

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