In his famous Harvard Business Review article, Theodore Levitt told stories of how the US railway industry forgot what business they were in and were fast overtaken but road and air transportation. We have been reviewing some of the behaviors of certain premier companies and it’s clear to us that some of them chose to not be myopic.
With a macro environment that has become hostile to many companies, few Zambian companies are stepping up and making the kind of strategic adjustment that will render their businesses to run ad continuum. These are companies that have answered the quintessential question “What business are we in?” The sort of companies that have realized that growth industries are few and far between. Management teams that know that their responsibility is ensuring their companies do not suffer fateful purposes ergo realizing that if caught in a self-deceiving cycle they would render their businesses obsolete. Decision makers that realize that regulation, when in effect, must be given the seriousness that it deserves or else their business could face foreclosure. Adapt or die.
CEC is one premier company that lives up to the bill of non-myopic. If the management team were asked, “what business are you in?”, we envisage a response that could possibly be partly shrouded in camouflage albeit protecting company strategy. However, they are an energy company with interests in telecommunication. They have been steadily working at increasing the scope of their vertical chain but at the same time, have looked at their resources and capabilities and discovered means of creating competitive advantage through resources that would traditionally condemn them to the status of a non-energy company. However, just because one is a farmer, it does not stop him from selling water if it’s in excess. The paradox of reserve capacity demands that if you are a player in a game and your resources allow you to compete in a nontraditional market, it would be folly to ignore that value creation potential that capacity gives you. This is essentially what CEC has done…is doing. On the back of its resources, it has been able to spawn off new businesses such as CEC Liquid and Hai Telecom.
As we continue to adapt to the current macro environment, entrepreneurs will need to dig deeper and assess the various resources and capabilities that they have. Bounded rationality will become a liability for anyone in business who chooses not to adapt. When the environmental pressures increase, strategy will demand self-reflection and an answer to the proverbial question: “What Business Are We In?” Ultimately, every Zambian desires to create value.