There are a lot of local SOE (State-Owned Enterprises) in existence. There are numerous learning points we can extract from closely examining them. One of those learning points is centred on assessing how innovation is handled in juxtaposition with cost-cutting. It is common practice for most institutions or business to always explore cost-cutting measures but oft time it’s overdone. I have first-hand experience of this from my involvement with a certain SOE for about 3 years. I recall a very bad experience pertaining to the disregard of innovation through cost-cutting excuses that I encountered there. In this article, I will touch on this issue by looking at some local examples.
How My Innovation Was Once Disregarded
My role was mainly administrative work and I came up with a lot of cutting edge initiatives, at least i thought they were. Due to my software background, I found myself inspired to develop a certain software application that was going to make a huge difference. There was a particular key recurrent exercise that had to be done often (but manually) – so I thought to computerize it. I pitched the idea and was encouraged to develop the application. When the time came to avail the product and start doing nation-wide installations and inductions in their various branch offices, I hit a brick wall.
I started getting a barrage of excuses on how the company didn’t have the funds to facilitate what I wanted to do. Even being paid for developing the application was out of the question because they were developing cold feet about just facilitating installations and inductions. Since the application was dedicated software which could only be used for only that organization I ended having to just donate it for free. I had no use keeping it so I had no choice. Up to this day the application is still being used and at times I’m even requested to come to do updates by one of the branches. This is a real personal experience of how innovation can be thwarted because of the incessant narratives of cost-cutting. I had so much that I could have done for that organization but I was demotivated and introduced no new innovation since that incident. Even other prospective innovators would be uninspired to innovate given such coarse attitudes towards innovation.
A Look At Local Mobile Service Providers
Former NetOne CEO gave some interesting insights into this subject recently through his Twitter handle. He made reference to how mobile telecoms operators who prioritized innovation more than cost-cutting are enjoying huge rewards. He pointed out that those that prioritized cost-cutting did reap some rewards but they were short-lived and largely unsustainable. He alluded to the fact that over the years operating costs have skyrocketed coupled with dwindling revenue. This obviously predisposed most operators to turn a blind eye to innovation and prioritize cost-cutting.
Don’t forget that these remarks are coming from someone who was once at the helm of Zimbabwe’s second largest mobile telecoms operator. He went on to highlight that top management at SOEs tends to disregard innovation. This, he added, is further exacerbated by excessive bureaucracy and inconsistencies rampant in policies and regulation that’s laid down. He even said something quite telling and I quote, “I can confirm that innovation in an SOE is punishable!”.
Owing to the fact that government has stakes in both NetOne and Telecel, it brings things into perspective as to why Econet dominates locally. That’s why privatization of SOEs can be a step in the right direction as that will untangle those enterprises from the vices of anti-innovation systems. The suggestions proffered (which are premised on the privatization route) by the former CEO of NetOne are two-tier i.e. allowing any interested locals to buy shares and employee to have share ownership in the SOEs.
Even a snap sweep across government departments will show this disdain for innovation. I often scoff at how teachers still use handwritten scheme books in this day and age. You’ll be amazed to find that the relevant authorities are the ones emphasizing on that. Whether it’s fear of change, having most decision-making power in the hands of older generations or just too much bureaucracy I wonder. All I know is that the narrative has to change; innovation deserves the attention and value it deserves. Even in other non-SOEs these dynamics I’ve been discussing seem so prevalent – in fact, all across society. We are now living in a time where innovation is the catalyst that’ll propel any corporate endeavour forward. Let’s not obsess with cost-cutting at the expense of the much-needed innovation. Cost-cutting can turn out to be costly later on.