opinionBy Eddie Mugarura Balaba
A lot has been said about the recent 'cuts and freezes' to Rwanda's aid allocations by western powers. Both international and local media has been hysterical and overly concerned by the ramifications of said aid cuts for the Rwandan economy.
While it is true that in the short term the impact will be felt by the average Rwandan, the situation is not as hopeless as many are making it out to be. Only eighteen years ago, the world had written Rwanda off. Another failed state ala 'post Siad Barre' Somalia at the time.
Look at Rwanda today, a model for all developing nations. I guess we have inspired countries like Somalia to get their act together and change is truly on the way in that part of the world too.
The same cohort of individuals that pulled Rwanda up by its collar from its knees to stand proudly tall today have fortunately not left our midst. Rwanda Inc is facing some financial difficulties during this economic downturn but the management is up to the task.
We will surely bounce back. The creditors may be jittery but all we need right now is shareholder confidence. Like all business cycles, this one too will come to an end.
What good organisations and their management are measured against is their long term strategy to address the challenges they face.
A drop in revenue over a few quarters need not be life threatening if the management can be trusted to innovate and harness the resources at their disposal to guarantee the long term survival of the organisation.
The current management's track record speaks volumes about their ability to deal with the present challenges. The real question now is "what strategy to adopt?"
W. Chan Kim and Renée Mauborgne the co-directors of the Instead Blue Ocean Strategy Institute in Fontainebleau, France may just have the answer.
These two stalwarts of strategy and management espouse a philosophy that organisations can define the structure of the markets they compete in.
This precisely means that you can overcome the perils of operating in an essentially unfavourable environment by innovatively focusing your resources and management's mindset to gain a relative position of strength within the market. Think Steve Jobs and apple.
This is known as a 'reconstructionist' approach to business strategy.
The traditional approach to business strategy has been to study the organisations business environment and then try to figure out in which areas to compete based on competitive advantage analysis. This required understanding the structure of the market and then aligning the organisation to that structure.
This is what W. Chan Kim and Renée Mauborgne have defined as a 'structuralist' approach to business strategy.
Rwanda Inc finds itself in a hostile business environment. We do not have the option to exit the market. Our choice has been made for us. We need to embrace the 'reconstructionist' approach to business strategy to tame the market.
The biggest concern right now is the cash flow situation and radical decisions have to be made by the CEO and his management team. There is no question about the mind set and only marginal gains are to be expected from focusing resources as all existing records show Rwanda Inc tops all comers in managing creditors' funds.
The reality is that the frozen or cut funds in the short term, have to come from somewhere outside the organisation. If the creditors or venture capitalists from the west will not barge, perhaps it's time to look east?
Unconventional approaches will have to be considered too. The current leadership has a very successful history in 'crowd sourcing' of funding and other resources; there is no shame in going back to those routes.
Agaciro Development Fund may seem a novel idea today but its routes are to be traced in the fundraising efforts of the liberation struggle.
People like the recently deceased honourable Aloysea Inyumba were particularly adept in mobilising the masses to contribute both financially and materially to the struggle. Her passing at this defining moment in Rwanda's future is indeed a great loss.
This young nation owes it to her in the memory of her unwavering spirit in the face of adversity to soldier on in these trying times.
May her soul lie with the angels in heaven of which she was truly the mortal equal.