CONVERSATIONS WITH MAWERE

"Invest in the change you want to see"

- Mutumwa Mawere -

Africa Heritage 2009 – Bridging the knowledge gap – Part 1 of 30

Posted on November 15th 2009

Africa HeritageAfrica's future is our business. Its legacy is and should be shaped by our own experiences, actions and choices. We have the power to change Africa and yet many of us feel powerless.

We all know that the identity of any society is inextricably to the actions of people who choose to be part of the social contract that underpins the society's foundation.

This is the first part of 30 conversations whose themes are drawn from selected comments and questions that have been directed at me by readers and followers of my own personal business and professional journey.

Today, 15 November 2009, I received the following message from a facebook contact:

"I know sometimes people will ask from you as I am now, somethings can never be duplicated but if you can pass some of your legacy onto our generation it would be most welcome. As a young zimbabwean I fail to escape the business mentally of the now now that has been prevailing. So I would like to learn from you in anyway possible to establish businesses that transcend generation and that will inevitably set a higher standard in our country. "

The question posed is no different from the many questions that I receive everyday. Business

Unfortunately, being only human there are limits to what I can personally digest and more importantly respond to.

God has not made it easy on humanity.

Irrespective of one's station in life, there is little one can do to increase the number of hours in a day.

Accordingly, rich or poor we all have the same access to God's time and, therefore, it is important to organize ourselves. I have learnt that the only enduring power that people who have no power is the power to organize.

If for instance, we decide to convert an idea like AHS to a bank or insurance company, there is nothing that can stop us. However, if we bank with people we purport to despise then there is no one to blame that the people who make the wrong choices.

There is no conspiracy out there preventing us to conspire about Africa's future let alone Zimbabwe's. No political leader will do for citizens what they cannot do for themselves. After all citizens only get leaders they deserve.

African LegacyIn the quietness of my time, I also have been reflecting on what is required to establish institutions that transcend generations and that will have a legacy impact.

I have come to accept that faith is the most powerful instrument to make human beings do what ordinarily would be impossible to imagine. Each of us is ordinary but together we can produce extraordinary outcomes.

If, for example, Jesus Christ were to come back to earth, he will no doubt be pleasantly surprised that his legacy still lives on.

Equally, Prophet Mohammed's legacy is still intact. The number of institutions that have been built on the back of faith are staggering.

It was Christ who said that if two or three people meet in my name then he would be there.

If people choose not to meet in the name of Christ, then it would be difficult to imagine how Christianity like other religions has managed to prevail.

When the first Christian Church was built, Christ was not there for people to consult and yet many institutions have been built because of him.

People often want to blame leaders for their lack of progress.

What is even more remarkable is that they expect, for instance, that merely because I have chosen to share my insights in the public domain that I have superior answers to issues that confront many of us in life. This is simply not the case.

Often we want to look for solutions from outside our circle of influence.

Each individual is sovereign and there is nothing one cannot do if they set their mind to it. Success

Success is linked to attitude. A right attitude can make altitude elastic and scalable.

When we are in the valley we are challenged by the steepness of the climb but what makes the heights scalable is the idea that someone else has walked the path.

It is never easy to scale the heights but what is satisfying is that the experience inspires many in the valley to invest in hope.

People who understand and appreciate the true meaning or meaningless of life are better builders of enduring institutions than people who live for the present.

Human beings value immortality and yet generation after generation who have come to learn that what we leave on earth are memories of our experiences.

To the extent that human life is perishable, all one can do in life is to play one's part. There is nothing that man has done in life that is meant for the dead.

For those of us who have chosen business as a vocation, we all know that shareholders do not own businesses and more importantly that human beings are incapable of owning anything.

Through the instrumentality of companies, human beings can do more together without suffering the burden of constantly dealing with the ownership issue.

Even the rich are not guaranteed a better life than the poor. In the final analysis the poor may very well lead a stress free life than the few who may be privileged to have access to resources.

AfricanIf in the construction of life as we know it human beings are incapable of owning anything then the challenge is to bridge the knowledge divide on some of the critical and fundamental principles that allow nations to progress.

One has to start appreciating the very idea of what it means to be African, what heritage means and finally what obligations are imposed in terms of nation building.

At the nation state level, we have to interrogate the notion of what it means to be, for example, Zimbabwean.

To be or not to be is a choice. Being born in Zimbabwe does not entitle one to citizenship. One could be born in Zimbabwe and yet choose to be a citizen of another country.

If Zimbabwe belongs to all who choose to be Zimbabwean then Africa ought to belong to only those who choose to be African.

One has to accept that in as much as many black Africans may choose to be citizens of foreign states, many who may be African need not be black.

I have to come to accept that shareholders like parents have to be selfless for their children to succeed.

Shareholders do not own companies in as much as it is impossible for children to be not owned by their parents.

The sole purpose of a company is to serve. If a company produces what customers are not willing to purchase, it loses its reason to exist.

The real owner of a business, therefore, is the customer and yet many look to shareholders as the true owners. If a company earns, for instance, US$1 million profit the profit does not belong to the shareholders but to the company.

Shareholders are only entitled to income that the company does not need to grow. A dividend is not a claim on a company rather it is a discretionary allocation of income that is not required by the company.Shareholders

In many cases a company may be liquid while its shareholders may be challenged financially.

What is required for sustainability is that shareholders like directors need to understand their rights and obligations to the company.

A company belongs to its stakeholders and what is required for durability is that the company must be close to its customers.

One needs to enlarge the circle of influence to include customers, suppliers, employees and many other stakeholders to succeed.

In many cases the company may benefit from the services of people who may not hold shares in it and yet many owner operators are reluctant to relinquish control to others.

It is not unsurprising that people who are outgoing and goal getters are more likely to succeed that people who spent their time looking at the rear view mirror in search of answers to current challenges from the past.

If we invest in knowledge, it will be easier to appreciate, for example, that Jesus did not need to be alive for the first Church to be built.

What he left was an idea that was more powerful than his present. Jesus did not leave cash with his disciples and yet faith pulled them together and generation after generation has followed the tradition.

Religion transcends national borders and yet the same people who belong to a global Christian family, for instance, are very people whose minds never transcend the race, gender, and ethnic barriers.

What is obvious is that in business we tend to be more selfish to the extent that we invest in a misplaced notion that we will leave forever and in so doing condemn the institutions associated with us in life to failure after we die.

AHSWe established AHS www.africaheritage.com as a response to our own personal loneliness in business.

As first generation role players in business, we lack the support system required for success. People who purport to know us rarely invest in understanding what we go through to create the perception of success.

People who look up to us mistakenly believe that we are in control and only need us for their own selfish ends rather than as partners in a pyramid of opportunity and challenges.

We need to share business experiences and I intend to use the remaining 29 articles to do precisely this.

Through these kinds of exchanges we may discover that there is more that unites us than divide us.

Comments

Comments by McK (2009-11-17 12:39:14) from RSA

Oh, we surely have a lot to learn to become proficient in business. There is something that I could have picked in MM's contribution regarding the attitude in developing a business. There is a strong suggestion that says "do not be a lone ranger where you could have done with a partnership". If I got it right, then we must seek to understand the founder's motive in continuing single-handedly instead of associating with another to build a bigger and stronger empire.

Perhaps its because we all want to be heroes, to be in control, to be worshiped and exalted for our marksmanship, to be credited with every ounce of success and to feel more popular than others. This destructive spirit is the one that is corroding many fertile business ideas.

The contributions in the upcoming articles will surely enlighten us regarding the issue of business orientation.

Comments by The Oracle (2009-11-19 04:19:27) from Utopia

Interesting read, though there are some key points I am at variance with.

You claim that “The real owner of a business, therefore, is the customer and yet many look to shareholders as the true owners. If a company earns, for instance, US$1 million profit the profit does not belong to the shareholders but to the company….Shareholders are only entitled to income that the company does not need to grow”

However, it is quite evident that the owners of a business are those who have a claim to its residual cash flows i.e. the shareholders. The whole idea behind any business run on anything other than humanitarian and socialist lines is to make a profit; and the question is therefore to whom does that profit accrue? Serving customers is a means to an end, but we must not lose sight of what the end itself is. It is actually far much easier to “serve customers” whilst incurring a loss; I guarantee that if you were to open a retailer which sells all its stock at 50% of cost, you would “serve customers” better that anyone else, but whether or not you would remain solvent for long is another issue. Whether we like it or not, PROFITS are the basis on which industry should be run, despite the incessant moralizing on the evil of profits by everyone from Pastors at the pulpit to socialist demagogues.

If one wants to build a business that will last, they would be well advised to look for something in which they can establish and maintain a competitive advantage. No business lasts forever, and no idea remains innovative; the lifespan of a firm depends on how long it can stay one step ahead of the competition and how fast those tasked with its strategy can preempt change and act accordingly. Once you find yourself doing “what everyone else is doing”, you can be sure that time is up.

Also note that besides debt covenants and similar legal restraints, nothing limits shareholders entitlement to the “income the company does not need to grow” besides prudence. A fool may decide to siphon all earnings and reinvest nothing, and actually get away with it for a while (think of the “Local Zimbabwean Banks”), and there is nothing to stop him besides good sense, so long as he has the voting rights to declare that dividend. When, however, you have ownership dispersed amongst a large number of minority shareholders who are unable to agree on a common policy and simply look to management (who usually have little or no shares and are totally divorced from ownership) to dictate how the company is run, the aberrations we see today become pronounced, and the sermonizing against the rights of the owners in favor of so called “stakeholders” (usually entrenched management looking to create sinecures and labor unions looking to earn more than a market based salary) reaches epic proportions, always ending up in the political arena. In such a scenario, which is common the world over, management who are no more than employees acquire the omnipotent and self seeking attitude of gardeners when the landlord has gone on holiday and left them with the keys to the main house, but that is another story altogether

Post Comments:





Turing Number