Project Management In Construction

 

Chilipi
Chilipi Mogasha, Operations Director, InnoLead Consulting

In the local construction industry, the biggest infrastructure projects are dominated by large multinational companies. Local contractors are left to make do with “leftovers” or subcontracting to these larger players. It is therefore of no surprise that there is mounting resentment of this foreign dominance, with local contractors demanding that their turn is overdue. This trend is also consistent with the country’s local empowerment strategies. The question is, how legitimate is this claim, and what needs to change to reverse the status quo. In this article, I will focus on just one aspect of this multifaceted challenge.

 

Let’s begin by contrasting these industry players. Typically, the large multinational companies have, or are expected to have more capacity. They have established systems and process, skills and competencies that enable them to handle the complexity and scale of large projects. Broadly speaking this is an indisputable reality, although it frequently does not translate into the results that stakeholders and clients would expect: successful project delivery.

On the other hand, local contractors tend to be small in scale and without a proven track-record. In a classic chicken and egg scenario, their lack of experience is the reason cited for not giving them the big jobs, but how can they get the experience if no one awards them the jobs! In any case, frequently, they are not resourced with the prerequisite skills and experience, even in cases where they are run by suitably qualified architects, engineers, and quantity surveyors. And as I will elaborate in the following sections, they more frequently than not do not have the required systems and processes to manage large-scale or complex projects.

How does the small contractor generally manage a project? What should be carried by the systems and processes is substituted with “common sense”. The planning and execution, be it scheduling, budgeting, risks management, monitoring, and control, is done, “in the head”. And when explicit plans and budgets are done, it is frequently for narrowly defined reasons, such as to meet tender and contractual requirements.  There is no universal appreciation of the value of the “Gantt charts and critical path analysis”, beyond clinching the deal and appeasing a demanding client. And as a result, the benefit derived from these tools is at best minimal.

If local contractors are to graduate from small time projects and rub shoulders with the major players, they will need to embrace proper project management. They need to appreciate the value of the application of project management best practice. Now, most people dismiss the so-called “best practice”, as “just theory” or “academic stuff”. This is a misguided point of view. What best practice is, is the application of what has been found to work best for most projects most of the time. Standards such as the PMBOK and PRINCE2 where not developed by detached university academics and theorists. They were progressively developed through reference to how the best performing projects are managed. By continuously harmonising these best industry practices, over time a “body of knowledge” has been developed, which represents the best-known way of successfully delivering a project. Therefore, when you deviate from best practice, whilst it does not necessarily mean what you are doing is wrong, it does suggest it is not proven. Therefore, you risk reinventing the wheel and repeating known mistakes.

A frequently expressed refrain is the applicability of best practices developed in the western world and applied locally. This is a valid concern. This emphasises the importance of local professionals, which we have in abundance, coming in and tailoring these practices to the local context. The recent developments to establish a local PMI chapter represent a promising development in this regard.

So in closing, the local industry needs a paradigm shift, and change in mindset, to embrace project management best practices and build the necessary skills, competencies, and capacity. The crux of the matter is that the project owners want to ensure that the organisations hired to deliver a project, will do so cost effectively, timeously and to the agreed upon quality standards. The adoption of “best practice” project management practices by local construction organisations will garner trust in the project owners that their projects will be delivered well while simultaneously positioning themselves within the local market as organisations capable of successful project delivery.

Chilipi Mogasha holds the position of Operations Director at InnoLead Consulting offering Management Consultancy and Corporate Training Solutions. He can be contacted on +267 3909102 and innolead@innolead.co.bw

Project Management in Mining, Part 2

 

Mark
Mark Muzinda, Senior Consultant, InnoLead Consulting

The development of a mine is a complex venture that entails the integration of various disciplines i.e. geology, environmental, mechanical, metallurgy, electrical, civil, structural e.t.c into a coherent whole. The development of a mine also entails various stakeholders including central government, local authorities, communities where the mine is to be built etc. Anglo America’s famous Minas Rio Iron Mine project, required over 300  permits or authorizations from various bodies. The delays with these played a big role in the project delays experienced.

 

All these stakeholders have varying impacts on the success of the project. They also have varying interests. These interests need to be managed or the project may be compromised. The complexity alluded to the above introduces another conundrum; uncertainty. The development of a mine is a not a routine endeavour, it is unique and laden with a lot of unknowns. Unknown terrain, unknown and unpredictable stakeholders, volatile commodity markets, unpredictable government regime or policy, and increasing nationalistic mineral policies. These unknowns have the potential to impact on the mine development objectives of delivering this entity on time, within budget and within the required functionality. These unknowns (risks) need to be managed systematically or else the project delivery will be compromised.

Project management provides a framework to manage the numerous stakeholders, and the uncertainty on the project. It also provides a framework as earlier discussed to manage scope, time, costs, procurement, the required resources to perform the works, and quality. This increases the chances of the success of development mines to full production.

Despite the adoption of project management as a discipline in mine development, we still see some of these endeavours failing, i.e. delivered late, over budget and late and sometimes the mine output is well below planned capacity. The reasons for this phenomenon is out of scope for this article.  Some of these reasons may include poor due diligence on the acquisition, fast tracking of the project with associated risks e.tc. Nevertheless, a significant number of mine development projects have been successfully delivered thanks to the adoption of capital project management methodologies.

Project management in mining has also been adopted in other endeavours including mine expansions, the case of Cut 8 at Jwaneng mine in Botswana, plant modifications, major maintenance works etc and continues to deliver value.

Mark Muzinda holds the position of Senior Consultant at InnoLead Consulting offering Management Consultancy and Corporate Training Solutions. He can be contacted on +267 3909102 and innolead@innolead.co.bw

Project Management in Mining, Part 1

Mark
Mark Muzinda, Senior Consultant, InnoLead Consulting

Lucara owned Karowe mine in Boteti region has been in the media for its large exception stones including the largest in 100 years, the famous Lesedi Larona.  How does  Lucara as a developer move from successful exploration (proving a substantially feasible mineral resource underground) to a fully developed mine producing exception stones? How is this process managed? This article presents the role of project management in the mining sector particularly, in the mine development process. 

After exploration that may take years to prove a resource (such as diamonds, gold, copper) exists in viable amounts the next step is to develop a mine to exploit these resources profitably and sustainably. This entails designing and building or developing the pit, i.e. exposing the ore bore body for mining with associated infrastructure such as roads for haulage of the ore for treatment. A suitable ore processing plant needs to be designed and built to recover minerals in a sellable form. There is also need to develop associated support infrastructure such as roads, hospitals, accommodation for the employees that will run the mine etc or for the smooth operation of the mine.

The development of the mine with its associated infrastructure is done by promoters of the entity. The promoters normally use either debt (borrow money from banks, or other credit providers) or use own money (equity or get equity partners on the stock exchange or elsewhere) or a mixture of both. This money has a cost to it, either interests (for debt) or opportunity cost / expected return on investment  (for equity). It is imperative that the mine is developed in the shortest or most feasible timelines to be able to meet the stakeholders’ expectations (lenders or the equity owners). This is to enable production/operations to start according to plan so that mine can start selling its outputs. Sometimes the developers want to take advantage of a window of opportunity where the prices of the mineral commodity are high, any late delivery would compromise this opportunity. A case in point is Anglo America’s Minas Rio Iron mine, which was delivered very late (price of Iron ore was about 120 dollars per tonne at original baseline completion date per by delivery it was  50 dollars per tonne).

The mine should also be delivered within budget as planned because the viability (business case) of the development of the mine is based on certain assumptions about the capital costs. Any escalation of these due to late completion of the project may render the business case null and void most especially with the marginal mines.  The plant is also supposed to operate reasonably within design capacity i.e. it should produce the right amount of amount at the right quality. It shouldn’t be stopping and starting all the time, or else the assumed production capacity in the business case will be severely compromised.

What brings together the time (completion of the mine development in the most feasible time), within budget to planned or within planned functionality (both capacity and quality of product output)? The simple answer is  Capital Project Management. The mining industry has been one of the earliest adopters of Project Management due to the huge costs (capital investment), tight timelines, the large number of uncertainties involved in the development of the mine. The need to deliver this on time, within budget and with required functionality cannot be over emphasised. Project management provides a framework that enhances the probability of delivering the mine development successfully within the budget,  time and required functionality.

The process to develop a mine generically involves four stages. The stages include the following concept, pre-feasibility, feasibility, execution. Each of these phases is treated as part of the project running from initiation, planning, execution, monitoring and controlling to close out. The stages dovetail into each other, and planning of the next stage is done in the predecessor stage. At the end of each stage, there is a gate release review to the next stage where go-no-go decisions are made. If the project is not viable, it can be stopped at the gate release or the stage may be extended to enable clearer information to be developed.  

Concept stage entails a desktop study of available information including, the topography of the area of the mine, mineralogy, hydrology of the area, required infrastructure and equipment, environmental impact assessment,  permits required, similar plants. The stage also entails identifying various options for the type of pit to develop and plant to build i.e. different plant configurations, infrastructure and mining equipment. The next stage is pre-feasibility where the identified options are studied in detail and a trade-off is done to identify the most suitable and feasible option. The trade-off involves identifying advantages and disadvantages of each option, cost implications, timelines and risk profiles of each option. The best option based on predetermined criteria is proposed and this option once approved at gate release moves to the feasibility stage. The feasibility stage then entails doing a very detailed study of the identified option with associated designs and cost estimating, and planning for execution. At this point in time, a detailed business case is presented to the financiers with a comprehensive associated project execution plan for the construction stage of the project. Some of the stages may be combined such concept and pre-feasibility depending on the circumstances. 

Depending on the ability to raise funding by the developers for construction of the mine the project proceeds to execution. The execution phase entails conducting further detailing of the designs, procurement of contractors to construct the mine and associated infrastructure and equipment, execution of these works up to commissioning, ramp up of production all the way to operations.

As earlier alluded each of the stages is managed as a project, with a fully defined signed off scope, aligned to a budget (cost), schedule, with associated procurement, human resource, communication, stakeholder, quality, risk management plans. Using project control techniques, the stage execution is managed and controlled within acceptable tolerances.  

Mark Muzinda holds the position of Senior Consultant at InnoLead Consulting offering Management Consultancy and Corporate Training Solutions. He can be contacted on +267 3909102 and innolead@innolead.co.bw

The Challenges of Implementing Strategy: An Interview

 

tapiwa
Tapiwa Mugore, Senior Consultant, InnoLead Consulting

BL: In your article, “Strategy In Times Of Change”, you state that an organisations vision or strategic intent is rarely changed, but rather the strategic tactics will be the ones to change and adapt to the environmental changes. Is this an easy process?

 

TM: On paper, the process is very simple. Let us assume you are one year into your strategy. You examine where you are now. You look at where you should have been after that one year. You identify why you have achieved in those areas that you did achieve. You similarly identify reasons for failure in areas of underachievement. Then you review the validity of your strategy going forward. This means making sense of the external environment that you operate in, including your industry. You ask yourselves whether there are changes to that environment that require a change of direction. You examine yourselves internally. You check your capabilities, both strategic and operational. You ask yourselves whether you are ready to leverage those capabilities to exploit the opportunities. Equally, you check that your weaknesses will not blindside you to any threats. It is a simple process.

BL: So where is the problem? If it is that simple should everyone not be doing it well?

TM: Sport is a very good example of how psychology affects strategy. If you go into it with the wrong mindset, you have lost even before you have begun to play. Many things in life have a simple process. The human mind, however, is not that simple. There is an emerging field of strategy that deals with behavioural strategy. It deals with how people, business leaders, in particular, make strategic decisions under different conditions. People that normally seem sane make the craziest decisions.

That is the complexity of the issue at an individual level. If you multiply that complexity with the number of executives, you get a really potent and unpredictable mix. History is inundated with tales of many sports teams that have done great things even though they looked inferior on paper. Leicester City 2015/2016, is one that immediately springs to mind. On the other hand, some teams and individuals fall from the lofty heights of success with no apparent reason. It really is difficult to predict what will happen. That is why the top sports teams and individuals have teams of psychologists. It is about getting the right mix, balancing the right dose of superstar players with the brilliance of the coach. All the moving parts matter. If they are connected well, a winning formula is created.

In an organisational context, we struggle to define this value-creating recipe. We do not spend enough time examining value cycles within the organisation. We do not understand how all the moving parts link together to create value. Organisations in the same industry, just like teams in the same league, will probably have very similar visions and mission statements. They will experience the same industry challenges and would be targeting the same clients. Because of this, we often accuse strategists of spouting the same tired measures and targets. The truth is, the uniqueness of an organisation is not captured in its targets and its mission statement. It is captured in the interactions of all its moving parts, in an activity system map similar to the IKEA one below.

activity-system-map
1: Source: Havard Business Review

Another organisation may be able to enter the low-cost furniture industry, but it will need to spend significant capital and time to be able to replicate IKEA’s unique blend of processes and activities to offer the same or better value proposition. Therefore, to answer your question, it is a little easier to change tactics if you can understand value creation in your business to this level. That requires difficult and open conversations and hard choices. Most of us simply do not go there in our strategic discussions.

BL: How do different industries compare in terms of Strategy Flexibility?

TM: In my view, it is less about the industry than the type of organisation. Of course, the industry affects the type of organisation. For example, banks are known to be very rigid hierarchical organisations. So are mines, which are very military like in their culture. In fact, do you know that the current predominant strategy thinking has its roots in military strategy? That is why it’s very top-down in its approach.

So you will find that the current way of devising and implementing strategy (at least the way they teach it in business schools) works better for organisations that have a “top-down” culture and where there are clear delineations between the different levels both in terms of function and expected contribution to the organisation. Those organisations generally tend to also be the most rigid and least responsive to their environment. A stable non-moving environment is what they thrive on and what they seek to create.

In a fast changing industry like Fast Moving Consumer Goods (FMCG) where all the big supermarket chains play, you would expect more strategy flexibility because consumer patterns change all the time. You really need to stay on your toes in that industry; similarly, or more so, in the information technology industry.

We live in an age where consumer choice has never been greater. We also live in a knowledge economy, where knowledge that comes from your intern can revolutionise the company just as much as insight from your top executive. We will probably need to re-think our strategy design processes and the way we gather and use knowledge. Industry lines are already blurred. Think about banking and mobile money for example. I suspect we are just hanging on because hierarchy, scorecards, and individual performance agreements are all we know. I have the same misgivings about capitalism and the world’s monetary system, but perhaps we can discuss that another day. My point is if you know exactly where the value is being generated in the organisation, it does not matter what industry you are in, you can be more responsive to your environment and flexible in your strategy.

BL: Finally, what are your thoughts on the challenges that face Africa in successfully implementing strategies?

TM: Now, obviously, there are many answers to that. There is one fact that I think we often ignore. We devise and attempt to implement our strategies exactly the same way that organisations do it in Europe and America. We use their tools and their measurement systems. In fact, we create our organisations in exactly the same way they do. The Japanese and South Koreans, in their era of massive growth did not do that. Neither did the majority of the Asian countries. They created organisations that assimilated their culture seamlessly. Look at the success it brought them.

Where is our culture in our organisations? Botswana is an example of a country with a predominantly collectivist culture.  What is the role of an individual performance agreement in a collectivist culture that puts community first? As a manager in Africa, you must leave all that you have ever known about people, community, not putting yourself first and not trying to outdo your peers at the door when you come to work. You must do all you can to get a good individual performance appraisal. Psychological research tells us that we must be our authentic selves to be our best. Is there not a link then between this constant clash of cultures and our poor productivity? More importantly, knowing this, what can we do to create better organisations and better strategies? Those are things we need to debate and more importantly, research. There is no point in putting ourselves down year after year and shrugging our shoulders is not going to make the problems disappear.

Tapiwa Mugore holds the position of Senior Consultant at InnoLead Consulting offering Management Consultancy and Corporate Training Solutions. He can be contacted on +267 3909102 and innolead@innolead.co.bw

Strategy In Times Of Change

 

tapiwa
Tapiwa Mugore, Senior Consultant, InnoLead Consulting

I play golf. I love golf. I would rather do very few things than play golf. There are also many things I have heard people say about golf and the people that play it – many misinformed things. Apparently, it is an elitist sport for the wealthy. My experience has been quite the opposite. Of course, my meager income also flies in the face of that theory. There is also nothing elitist about (most) of the people that I interact with at the golf club. But those are opinions. We can argue back and forth all week and never find common ground.

 

The point I want to get to is that golf is one of my strategic choices. Most of us have a vision of living a long and healthy life, with more moments of happiness and relaxation than sadness and stress. We make strategic choices about how to achieve this, consciously or otherwise. Some find their solace in religion. Others find peace and relaxation in front of the television. Some find true-life purpose in time spent with friends and family. Others find their true happiness once a week for a whole three days at the bottom of a bottle. A very lucky few (fewer than we are willing to admit) find the meaning of life and complete joy and fulfillment in the daily routines of their work. For health, some run, gym, cycle and engage in all manner of sweat inducing endeavours. Others simply raise their glasses/bottles and toast to a long and happy life – it is a two in one solution for health and happiness for these folks. There is also the category of people who just say “Life is too short. Enjoy it while it lasts. We will all be worm food, healthy or not”.

In truth, most of us find a little bit of joy in many of these categories and we enjoy some more than others. I enjoy golf. I have chosen golf because it helps me to disconnect from the world for a few hours. No mobile phone (I try), no laptop, nothing to worry about except competing and winning. It rejuvenates me and brings me back closer to my best self. At the same time, I exercise and spend time with friends and meet people that I would not meet in the course of an ordinary working day. Therefore, it is a choice about how I will achieve some level of happiness and health in my life.

Of course, in future, no one knows with certainty how the world will change. My need to have a greater income may force me to move to Iceland (a competing strategic choice). If you do not have sunshine and a respectable amount of grass, you cannot play golf. I may develop a back problem or a knee problem that prevents me from swinging a golf club. The owners of the golf club may decide they want to use the land for something else. A myriad of things could change in the world. I would be forced to make a different strategic choice. I would need to find other ways of achieving my happiness and health vision. If I was in cold and dreary Iceland, I might just have to join the “here’s to a long and healthy life” group.

Clearly, my vision stays the same. Whatever strategic choice I make remains guided by my vision for health and happiness. There is a cause and effect linkage between my choice of action and achievement of my vision and hopefully, that link is strong. There is also a clear link between my strategic choice and the world around me. In the moving-to-Iceland scenario, my physical environment changes, therefore I must adapt my strategy for achieving my vision.

Apple’s reality in Cupertino has changed. Donald Trump does not want to play nice with companies that he perceives to be exporting jobs. He would like companies like Apple to bring manufacturing jobs back from China to the USA. Apple may have to pay tariffs for phones it makes in China if it wants to sell them in America. Britain’s Easyjet suffered heavy revenue losses because of Brexit in 2016. Presumably, there will be even greater changes to its ability to operate in Europe once Brexit is finalised. Locally, SPEDU made all the newspaper headlines last year as the government took a decision to liquidate BCL mine. All these changes are external to the organisation, which may or may not have any influence in the decision or how it gets implemented. Will Apple change its vision of making great products and focusing on innovation? Probably not! Will it have to change its strategy? Possibly! It just depends on the specific effects of this change and what Apple and others in the technology sector can negotiate with the government. I would think the same would apply to EasyJet. SPEDU needs to intensify its efforts to diversify the region but I do not think anything changes fundamentally in its vision.

Those are major changes. Many other changes happen in the world. They happen almost imperceptibly. Millenials are slowly taking over the workplace and we have generation gaps. People trust Google more than they trust professors, senior managers or “experts”. Buying patterns change. So while we have a golf shop 5 minutes from where I live, I have never bought anything of significant value from it. I buy from South Africa or online from the USA. I choose to not be ripped off just because I live in a small city where there is no big market for golf equipment. Local availability of products and shipping cost are not justification enough to pay higher prices for golf equipment. I have found a way to enable my strategy at the least cost. Like me, all these changes in the world probably affect your organisation.

Should they change your organisation’s vision and your reason for existence? If it is well defined, most likely not. The point is there is no change proof strategy, no magic wand that will allow you to have the right answer in changing times. Strategy is not a hindsight game. It is about keeping your eyes firmly focused on the future while reacting to all that is happening around you. There is a lot that happens from the moment you have signed off your strategy. After all, the cliché goes, “the only constant is change”. It is clear that right now, America is in transition. Europe is in transition. All this will have a major impact on Africa and it will also need to shift position. Countries will either flourish or sink further. How will your organisation react?

If you keep your eye on your strategy, review it, check its cause and effect linkages regularly and are prepared to make choices every day (difficult or otherwise), your organisation is more likely to live a long, happy and healthy life. However, be warned, there are no guarantees! That is except, change will happen!

Tapiwa Mugore holds the position of Senior Consultant at InnoLead Consulting offering Management Consultancy and Corporate Training Solutions. He can be contacted on +267 3909102 and innolead@innolead.co.bw

Executing Marketing Strategies through PM Best Practices

lebo-7-copy-copy
Lorato Kwelagobe, Sales & Marketing Manager, InnoLead Consulting

The purpose of a marketing plan is to provide an outline of how the organization will combine its resources such as people, products, pricing, promotion, and place (distribution) to create an offering which can attract the consumers or the targeted audience. This is what they normally call a marketing mix formula, to get the right combination with a unique pull, one has to be creative and be mindful of the market dynamics. Similarly, when baking a chocolate cake, the end result of a rich and tasty sponge, solely depends on how well you mix the ingredients. A company’s marketing strategy will determine why a chocolate cake instead of vanilla for instance as well the right ingredients in the right mix.

 

The role of a Chief Marketing Officer is to figure out the company marketing approach or strategic positioning, he/she studies the economic indicators and lifestyles along with the organization’s strategic objective and then decides on the marketing mix.

The inspirational Sir Richard Branson has mastered the art of marketing through product launching tactics such as jumping from a tall building in Times Square while holding a large Virgin cellphone. In no time everyone heard about the Virgin cellphone, people came to see him and reporters all over covered his marketing stunt. His tactics are always in line with his brand. The man is the best self-promoter who is always bold, draws the right attention and gets his execution right.

With many CEO’s concerned about the failure of most marketing strategies as well as the return on investment of these strategies, the blame or discussion is normally focused on business not doing well, an unstable business environment or industry challenges. I do agree that market forces and environmental factors such as global economy, politics, and natural disasters may negatively impact our plans, however, we also fail because of our own doing by failing to manage our actions and control the controllable.

Too often, statements like, “We going to be the best innovate mobile company” will be made without the know-how to implement the strategy. Many come up with these good marketing strategies to achieve but most companies also have the challenge of implementing or execution of these great ideas. Collins and Hansen 2011 supports that there are factors that determine whether a company becomes great or successful in a chaotic and uncertain world, this lies within the hands of its people. It is not a matter of what happens to them but a matter of what they create, what they do and how well they do it. We are accountable to strategies which we create, therefore we can control the success of our marketing strategy. All strategic marketing initiatives are projects and programs, the success of which are dependent on how well we plan and execute them.

Like all projects, a marketing plan has an initiation stage where marketers build concepts or the business case. Then follows the planning which is a critical stage, this is where you define the marketing activities and make a work breakdown structure of the marketing project, that is the preparation of resources, cost plan, quality plan and communication plan to name a few. The next phase is execution; in marketing very often the root cause of failed products and marketing campaigns is not necessarily the concept or the idea but the planning and execution of the marketing project plan.

Imagine you are a launching a new product to build recognition and increase sales. Having identified all the stakeholders, the product development teams will normally collaborate with the marketing team in the project to develop a project charter, outline the tasks and appoint project managers with the right skills set from each department. Both teams also agree on the time frame, scope of the launch, targets, and external stakeholders like customers, suppliers and media companies to promote the launch.

In terms of the direction and management of the product launch, the teams will have scheduled meetings to keep the project rolling and make sure everyone involved is working on the right task to complete the project on time. The relationship between these two teams is crucial for a successful launch, which is why communication must be consistent to stay on track, identify the potential risks and mitigate against them. Communication between the teams will foster great success but if things are not done properly there will be a reputational risk and a cost risk which is very common today. Companies launch products or even brands which are not fully ready due to pressure to meet targets or from top management.

This must be avoided at all times because launching a product is a once in a lifetime experience and if you don’t do it right it will cost you badly. The market will remember your bad experience and lose confidence, ultimately resulting in a high cost on the company sales. Richard Branson says “Do it right the First Time”. This is where the aspect of monitoring and controls comes in to manage your cost, risk, stakeholder engagement and adhere to internal procurement policies. Therefore I can confidently say there is a benefit realization of the project management discipline in creating value and best marketing results. It gives you the advantage in executing marketing projects on time as well as within budget.

It is, however, important to understand the connection between the marketing strategy and best practice Project Management to improve on your “Go to market” approach. In addition, managers must shift their mind-set, take charge and motivate teams to adhere and commit to these principles.

Lorato Kwelagobe holds the position of Sales & Marketing Manager at InnoLead Consulting offering Management Consultancy and Corporate Training Solutions. She can be contacted on +267 3909102 and innolead@innolead.co.bw

The Economics of Happiness

By Oabona Kgengwenyane

For every country, it is its people that have to set its development course, tone and account for both successes and failures. Whatever happens, the challenges will always be there and the test of character and leadership comes from the intellectual courage and stamina to tackle current and imminent challenges. Even with the level of challenges we face, I never expected that we would rank amongst the bottom countries with regard to our level of happiness. The TIME magazine “The science of happiness” 2016 special edition showed Botswana (Page 92) as being among the least happy countries on the planet! I read the article 4 months ago and revisited it again lately and still could not understand why we would score that low….

Over the years we have ranked badly with HR Development indices due to the impact of HIV/AIDS and this has been much publicized globally through media houses and international agencies. And now of recent, it appears our happiness scores are receiving much attention globally and like HIV/AIDS impacting negatively on how we are perceived by outsiders. Unfortunately for humans, bad news tends to travel faster than any piece of good news….

We have a country that has enjoyed one of the highest GDP growth rates over two decades with a growing middle class and improvements with poverty eradication, yet we remain unhappy. The trouble with unhappy people, like a company dealing with a demotivated workforce, is that very little gets done, trust is compromised (fertile ground for corruption),  crime increases, low innovation and creativity levels and growing cynicism. Happier people generally get involved in healthier and progressive behavior. Importantly well-meaning national strategies can easily get sabotaged leading us to continue dreaming without ever achieving. This could present a  new  risk to the achievement of the newly approved Vision 2036.

In recent years some countries have placed the desire to develop a happier society in their national agendas. I recall David Cameron the former UK  prime minister when he wanted GDP measure to be recalibrated to include happiness levels. According to Cameron “Wellbeing can’t be measured by money or traded in markets. It’s about the beauty of our surroundings, the quality of our culture and, above all, the strength of our relationships. Improving our society’s sense of wellbeing is, I believe, the central political challenge of our times.” I couldn’t agree more. O otlile kgomo lonaka!

Under the leadership of Sheikh Mohammed, the UAE has established a Ministry of Happiness with structures and officers dedicated to a happier society. The UAE is ranked as the 28th happiest country in the world, according to last year’s UN World Happiness Report and highest in their region, so it’s already doing relatively well and being proactive in managing happiness levelsEven Aristotle talked about “eudaimonia” –  Greek word translating into happiness as human flourishing and purpose to life, and Joh Keynes talked about the art of life in 1930.  Admittedly it is a very fluid subject that can be very subjective and much research is still ongoing on the science and art of happiness.

A young country like Botswana, which is still at the infant stages of carving out its national social makeup, presents an opportunity to define a future vision of a well-rounded society that is happy with high levels of satisfaction beyond the typical economic indicators. I fear that the more we leave this to chance, the more we expose our country to all the social ills associated with modern societies which would be difficult to reverse.

The following are typically considered as influencers of happiness for a country or society; social support, GDP per capita, healthy life expectancy, freedom to make decisions /autonomy, generosity/gratitude and perceived corruption. Studies have shown that a growing economy does not necessarily translate into a happier society. The TIMES survey showed this with Botswana scoring much lower than countries like Mozambique, the DRC, and Lesotho.

The recent development at BCL and Tati Nickle Mine will result in happiness levels that are  bound to deteriorate even further when thousands of unemployed hit the streets contributing to an already high unemployment environment. A recent study on the Better Life Index by OECD showed a direct correlation between a good life and unemployment. According to the study, a healthy job market is one of the most important factors contributing to higher life evaluation. The top 10 countries had the highest employment rates. It goes without saying that unemployment and fear of job losses have a detrimental impact on workers mental health and hence happiness levels. As a nation, reducing unemployment has to be  a TOP AGENDA item in all the  corridors of policy makers and strategists. It’s an urgent matter to keep our social fabric intact and with positive happy attitude.

I have had the opportunity to give talks to many young people at the local universities and at times I am struck by the negative energy that prevails across many of them. They seem to have lost hope and are waiting for government and others to define their destiny. My message as an entrepreneur is usually very simple; kill the sense of entitlement and dependency on others! Recognize your unique abilities, polish them up and take on the world. Even with the struggle you get to enjoy the journey because it’s on your own terms. I get them to embrace a sense of abundance instead of the typical scarcity mentality that troubles most of our people.

As we look back on the past 50 years of independence and the current rich air of national introspection, it could be the right time to seriously address our issues around happiness and psychological well-being. It can become our undoing if unmanaged. Who wouldn’t want a wealthier, fairer, healthier, more creative and purpose driven society? We have one of the richest cultures on the planet, the most well-kept / unspoiled natural environments, relatively sound economic grounding, warm climate with long days of open sunny skies, sparsely populated and uncrowded living large spaces. We could become a global attraction for happy living, but this will take deliberate strategies to achieve and reverse the negative trend. A great investment for our future generations!

Oabona Kgengwenyane is the Managing Director of InnoLead Consulting and X-Pert Group offering Project Management, Management Consultancy, and Corporate Training Solutions. He can be contacted on 3909102 and okgengwenyane@innolead.co.bw.