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State of the Nation Address: An HR Perspective

State of the Nation Address: An HR Perspective

In the state of the nation address the President highlights a number of areas where human resources can play a part.  The human resources implications are all derived from the business imperatives also highlighted in the same statement.

The President indicated that “Zimbabwe is open for business.” We are likely to get investors from all corners of the globe setting up companies in the process bringing in their national cultures. Whenever new investors setup big business they always want the senior management to be theirs including in some instances technical people. This normally results is clashes with locals who normally expect to lead these organisations. It is therefore important for Zimbabweans to note that when investors bring in of senior management and technical skills that is good for the development of management practices in the county through skills transfers.

Besides the issues raised above there is a possibility of cultural conflicts.  In his studies of national cultures Hofstede (1997) indicates that national cultures differ on the following dimensions: power distance, individualism, uncertainty avoidance, long term orientation.  Most European countries and the USA have high individualism which is likely to clash with our collectivism orientation. Other clashes are likely to be on power distance where Zimbabwe is very high and compared to these countries. Most of these countries are high on long term orientation while we are oriented towards there “here and now.” Are human resources professionals ready to handle and manage the likely culture conflicts? Those who work in embassies locally will tell you that these culture conflicts are real and affect employee productivity. We have heard stories of locals clashing with the Chinese management in many companies. In some cases locals take the conflicts as racism. With better planning and cultural induction of foreigners coming into the country we have a better chance of managing such conflicts.

 

According to research by McKinsey (2007) in conjunction with Center for Economic Performance at the London School of Economics and Partners from Stanford and Harvard universities (2007) better managed organisations report higher productivity and resilience to negative economic swings. In the same study they note that multinationals across all countries studied tend to be more productive than local firms. They have superior know how and technology. According to the same study countries with more multinationals tend to perform better than those without. It is noted that the competition that multinationals bring to the local market forces domestic players to improve their own productivity – driving down prices, increasing demand and creating more choices for customers.” So we hope the President‘s call “Zimbabwe is open for business” will bring all the benefits that come with multinationals.  It is not a coincidence that when we started chasing away multinationals that is when the economy started going down. The not so good success of most indigenous companies points to poor management as the main cause.

 

The opening up of Zimbabwe to new investors could also signal freedom for employees who have been stuck for years with employers who have not looked after them. I see a lot of employers got fooled by the low staff turnover experienced over the past years. It is not because they are doing anything wonderful.  It is because employees had no choice.  However this new dispensation could mean employees will have more choices.  Human resources professionals need to build employer brands that are able to retain good employees in both good and bad times.

 

The President talked about “productivity and capacity utilisation across all sectors; enhancing foreign currency earnings.” This is a very important and good call but with so much challenges. The OECD defines country or national competitiveness as “the degree to which a country can, under free and fair market conditions, produce goods and services which meet the rest of the international markets, while simultaneously maintaining and expanding the real incomes of its people over the long term.” It is known and it has always been known that Zimbabwean products are noncompetitive for various reasons. The reasons for lack of competitiveness can be traced directly to low productivity. Our companies have largely depended on price to make money; rendering them noncompetitive. Producers and suppliers are equally culpable.  This is evident in the way local businesses fail to pass on the benefits of input prices reductions to their customers. What is evident is greed and profiteering honed in during the last two decades. Capacity utilisation which I see industry focusing on, is just but one component impacting on productivity. To a larger extend it has nothing to do with efficient use of resources which is at the centre of productivity improvement and competitiveness. The industry’s major thrust has been to increase capacity utilisation with the hope that it will increase competitiveness. This strategy which has been tried many times and will not result in Zimbabwean products being competitive. What is required is innovation around major cost drivers such electricity, water and labour. Wages cannot be a limitation: I know our wage system is a hindrance considering that our NEC recommend wages are not in line with productivity. In Zimbabwe on average minimum wage is less than $2 per hour but in the highly competitive markets its $13 to as high as $18 an hour but they still produce competitively. This could be that they have looked to other areas for productivity enhancement e.g. technology driven productivity improvements.

 

Most people including those in high offices celebrate a rise in production and equate that to productivity. Productivity has to do with the efficient use of resources to produce products and services that the market is willing to pay for. There are companies that have 100% capacity utilisation but are very unproductive. There are companies that are exceeding their production targets but also highly unproductive.

 

The second myth is that people think that every company that is profitable must be highly productive. While that logically make sense, in practice it does not follow that a company that is profitable is highly productive. Profitability in companies can change for reasons that have little to do with productivity for example upward increase in product price. We must accept that we cannot regulate ourselves to competitiveness as a country. Imagine even if the government was to protect every product that we produce locally we will still fail to export because we are very unproductive. Poor leadership and management misuse resources thereby impacting on productivity and competitiveness.

 

On the issue of skills which was also highlighted in the statement, I think we are far behind other countries. Those who think we have the skills are not looking at facts on the ground reflected in how some local companies are performing despite resources being poured into these companies. My view is that we are celebrating yesteryear glory that is not supported by facts. The President says we are 20 years behind in development – it is true we are 20 years behind in skills, technology, governance, leadership etc.  Various studies have indicated that we are far behind. Studies have shown that level of IQ (71 to 80) of the citizens we are far behind other countries including some in Africa.  Zimbabwe is ranked #115 out of 119 on The Global Talent Competitiveness Index (2018).  Zimbabwe is ranked #119 out of 128 countries on the Intelligence Capital Index measures (Chan 2017). All the above indices have a high correlation with economic development indicators. What other proof do people need to know that we need to focus on developing the right skills for the country not just education? Yes, we claim to have highly educated workforce, however, if I may ask, which field are we blessed with highly skilled and educated people except politics? We need to accept that we do not have the skills to raise the level of productivity to the levels of Singapore and other high productivity countries.  This needs to be a top priority for government and the Ministry of Higher Education seems to understand this challenge now with the new Minister.

 

I have also noted that we are celebrating the Zimbabwean work ethic as a source of competitive advantage. We need to ask, is Zimbabwean’s work ethic a blessing or a curse? Zimbabwe is ranked high on the Protestant Work Ethic value; in the same league with India. Research on work ethic points to the fact there is no relationship between work ethic and economic development. Zimbabweans are high on work ethic which makes them hard working, obedient and loyal employees and not thinkers who can innovative and challenge authority. Over and above this, studies on personality for citizens of countries all point to challenges that the leadership may need to contend with in-order to address the human resources challenge Zimbabwe is facing.

 

Research on average personalities for countries and national outcomes show that of the big five personality traits, Zimbabwe is high on Conscientiousness and low on Openness to Experience. Research comparing countries on personality traits has largely found that countries with high average levels of conscientiousness tend to be poorer, less democratic, and to have lower life expectancy compared to their less conscientious counterparts. Others have argued that highly conscientious people tend to emerge in harsher life conditions like ours. Such people are goal focused and rarely challenge authority. They value conformity, adherence to policies, tradition, and are very obedient to authority.  Countries with highly conscientious people perform badly on most economic and social indicators.

When you look at national values and economic development we are nor faring well as well. According to the World Values Survey: a country’s level of economic development is related to its societal values. The values range along two dimensions: survival versus self-expression values, and traditional versus secular-rational values.  According to this survey Zimbabwe is high on survival and tradition.  These two values have a poor correlation with economic development.

 

The statement also talks of the need to harness opportunities presented by the Special Economic Zones. Selective application of the Labour Act in the zones brings its own challenges. Are HR people ready for this change and what does this mean for the movement of employees from one organisation to another? Is this not going to compromise how labour rights are going to be observed? If the labour conditions prescribed in the Zones are tried and tested, why not apply them to the rest of the economy so that every investor local or foreign can benefit?

The statement highlights the need to “Increase in youth vocational training centres – aim to enhance entrepreneurial and business relevant skills.” Is this new? The intervention is too late if it is targeting people already in vocational institutions. Redirecting people to the right careers must start in early childhood education. Government must invest in providing resources for early childhood education, nutrition and the right stimulating environment first. The government must revive the Schools Psychological Services so that it plays an important role of assisting in directing students to the right paths early in the career rather than to wait until they complete secondary education. From grade 7, students must be directed into a career capitalising on their strengths instead of waiting until after ‘O’ Level. We need more doers than thinkers. The current system seems to be focusing on producing too many thinkers who all want to be managers. This is what has brought us to where we are now; too many managers managing others managers.

 

On the State Enterprises, the President notes the need to “commercialise, or wind up some. Poor corporate governance, undercapitalisation, unsustainable salaries and allowances and excessive borrowing”. The unsustainable salaries and allowances are a result of “poor management” and nothing else.  I do not see how capping salaries would address the core problem of “poor management”. Most of the State Enterprise reforms are not informed by proper root cause analysis. Patriotism is not one of the variables employees look at when choosing an employer. Capping of salaries will not work. Competent employees will leave and state enterprises will attract mediocre skills and ultimately poor performance. Undercapitalisation and excessive borrowing points to poor management and poor corporate governance.

 

The President says “Local Authorities are expected to transform themselves”. Same problems as above. Local authorities have no human capital capacity especially leadership to take themselves out of the current situation even if they get more than what they need in financial resources. The governance structures of local authorities is wrong. Harare is bigger than a number of Ministries combined but its top governance structure is manned by people who have never been in a proper functional organisation.

The President talked about the National Productivity Institute to speed up productivity initiatives in the country. The framework is already there with an interim Board. However the legal framework in being worked on and if this can be accelerated it would make a huge difference to the competitiveness of the country. This will allow the institute to get budgetary support from the government.

The need to exploit social dialogue between social partners and the need for a social contract was highlighted in the statement. This has been on the cards for more than 10 years now since the Kadoma Declaration. If this can be finalised it will help the country to be more competitive. Labour and Business have been ready but the previous Government has been reluctant to take steps to make this a reality.

The President noted that the biggest threat to economic revival and development is corruption. Corruption thrives in countries with inefficient systems. If the government can leverage on technology and automate all key government functions allowing citizens to access services with little or no human interface corruption will disappear.

Harnessing internet connectivity throughout the country presents opportunities for HR professionals. HR seems to lag behind in harnessing technological development for the good of business. This includes internet connectivity. Besides payroll which is purely administrative, most companies do not have a proper HR information system. Where technology infusion is being tried it is heavily underutilised. High value interventions like People Analytics require HR to harness integrated business information and employee information.

The President noted that “The goal of my government is to build a new Zimbabwe based on the crown values of honesty, transparency, accountability and hard work.” Mr President, Zimbabwe needs a culture change. This change must be in civil service and local organisations of all nature and size. The changes currently taking place in the country are not going deeper into the core and toxic collective shared assumptions developed and perfected over the past 37 years. If we do not change the toxic cultures developed over the past years, the changes currently underway will not have the desired impact on people’s lives.

The analysis above should give leaders in the government, civil service and companies a good starting point as they reflect on what needs to be done from a human resources point in order to turn around the economy and companies.

Memory Nguwi is an Occupational Psychologist, Data Scientist, Speaker, & Managing Consultant- Industrial Psychology Consultants (Pvt) Ltd a management and human resources consulting firm. https://www.linkedin.com/in/memorynguwi/ Phone +263 4 481946-48/481950/2900276/2900966 or email: mnguwi@ipcconsultants.com  or visit our website at www.ipcconsultants.com

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