Zambia Journal: No Risk, No Reward
Guest blogger Brian McBrearity will be reporting from time to time about his experiences working in Zambia on SME and financial services development. His Zambia Journal posts will appear about once a week here on NextBillion.net. This is the third in the series; read his previous posts here and here.
My past posts have offered questions without answers, observations without insights, reality without reasons. While the economic picture of Zambia is still a murky haze in my mind, a few lights are beginning to shine.
There seems to be a cultural rejection of risk and aggression in Zambia, which carries over to the business environment. From my business experiences here, few local managers exist. Those that do lack the confidence to make decisions with conviction, lack the willingness to accept the risk that comes with those decisions. They defer to others, or make decisions by consensus opinion. This weak management style leads to second-guessing, and overall inefficient business practices.Many of the apparently successful managers that I have met while here have fallen into two categories: foreigners or foreign-trained. The Ugandan population in and around Zambia seems particularly comfortable running departments, product lines, or entire corporations. Along with the Ugandans are Zimbabweans and South Africans, not to mention a small but noticeable contingent of NGO-sourced managers from Europe and the US. Zambian managers who have been foreign-trained are bringing educations and experiences from Zimbabwe, South Africa, and Europe. In this category I would also include those managers who have or had careers within multinational corporations.
As an example, I met a Zambian who is a very effective manager in his current role; he is relying on the skills honed during a long career at the Zambian office of British American Tobacco. Among his peers, this BAT alumni stands out as a confident, “up and coming” director, while his colleagues are struggling with the concepts of direct reports, problem solving, and earning respect from the staff.
The aversion to risk appears to stem from colonial times, when the British controlled Zambia, then Northern Rhodesia. A map of Zambia reveals one main road in the country. This route runs from Livingstone (at the southern border with Zimbabwe) north through the center of the country up to the Copperbelt Province, and through to the Congo (DRC). The road, and neighboring rail line, was used during the colonial period to extract resources from the country, and as a conduit for resources being extracted from countries south of Zambia. (A second northern branch of the main road, heading to Tanzania, was constructed later when the DRC’s political climate became unstable). Many of Zambia’s exports were sourced from the central region, and this road provided a quick and efficient method for export. Travel a few kilometers off the main road, and what was tarmac and electricity quickly becomes undeveloped bush.
Foreign corporations controlled this massive exportation of resources. North American, European, and South African companies had relative monopolies in many industries, most noticeably mining. Over time, this foreign control permeated the culture, and the resulting passive behavior seems to have been ingrained in successive generations.
Coincidently, Zambia seems to be one of the more stable countries in the region; the recent election results speak to that stability. For a quick and very broad summary, the urban areas were voting for a change in leadership; the rural areas were voting for continuity. The urban areas lost the vote. In other countries (i.e. the DRC) the resulting tension post-election leads to clashes, violence, civil unrest. Here, there were a few isolated outbursts of built-up tension, but overall calm remained after the elections. From my observations, the local culture is to avoid risk and aggression, which is good from a quality of life standpoint, but may hinder competitiveness and innovation in the business climate.
At the time of independence, the country was largely dependent on foreign corporations, and their management expertise. The reliance on foreign corporations may have waned, but the reliance on foreign management and foreign business training still appears in the Zambian corporate world today. I am beginning to feel that this may be a contributing factor as to why Zambian companies could not, and largely still cannot, compete with the foreign competition for consumer spending.