Businesses in Nigeria sometimes hinder their own growth.
Stransact Partners, a professional services firm, has said businesses die in Nigeria because they lack the capacity to create value.
The firm said this while announcing the commencement of its 2013 Executive Coaching Programmes, a service it renders to boost the value of its clients’ businesses and meet their rising needs.
“Stransact Partners have discovered that businesses die in Nigeria because they lack the ability to create values and since we know the secrets to value creation because we have helped many struggling businesses regain stability, it is therefore necessary for us to coach desiring executives on how to create values for business growth,” the firm said, in a statement.
“This is our way of delivering on our commitment to create wealth for Nigeria. We do this by birthing businesses and by providing strategic advice that guarantees sustainable growth” it added.
The firm said it plans to launch its programmes in July with a two-day class on Essential Business Secrets in Dubai. The Lagos-based firm also announced the suspension of its open courses on finance and accounting, beginning from September 2013. It added that its knowledge brokerage events on finance, accounting and tax would now be strictly by invitation.
The company, which emerged as Africa’s Best Tax Service Provider of the Year 2013 in the just concluded African Brand Leadership Merit Awards, said it has thoroughly examined the need to shift attention from organising open training sessions to focusing on Executive Coaching Programmes for business managers and top executive officers, based on request.
“The executive coaching team, which will be led by Eben Akinyemi, Stransact’s Country Partner, would be glad to share, with serious minded business owners and top executive officers, the secrets some of our clients have been enjoying in achieving organisational growth and financial success” the firm said.
Experts say the purpose of any business is to create value by producing goods or services that are worth more than the cost of the necessary inputs and that for a business to survive and thrive, it must create value.
Doing business in Nigeria has been described by businessmen and women as very challenging because of the numerous challenges which include disconnect between expanding public fiscal operations and monetary policy from domestic production, high poverty incidence and weak purchasing power, multiple taxing, continuing opening of opportunity windows for foreign investors to the detriment of domestic investors, poor access to credit, inhibitive tendencies of monitoring and regulatory agencies, sustained insecurity situation across the country, dwindling public power supply, and budget approval/implementation crisis among others.
Despite these challenges however, businesses in Nigeria hinder their own growth by ignoring some basic fundamentals while running their businesses, according to experts. Customers lament poor customer services, employers are disgruntled and investors are not happy, with the performances of some businesses.
Even the banks are not left out of the businesses with value creation challenge. Only recently, Renaissance Capital, an investment bank said for some years, the banks have succeeded in creating zero value for themselves.
“We note that in some years, the banks created no value, and in fact destroyed value” Renaissance Capital said in a report analysing the banks’ 2012 performance.
According to the firm, even shareholders are not left out in the consequences of the lack of value creation.
“Banks delivering returns below 18 per cent are falling short of creating value for shareholders. As banks start to think about their balance sheets and potential capital raises, we think this issue of value creation is going to become more critical” the firm said.
If businesses must stay alive and remain profitable in the long run, they would have to review narrowed self-interest goals and invest in trainings on how to satisfy their customers, employees and investors.
Paul O’Malley, founder of Paul O’Malley Associates, LLC, a Boston-based executive coaching and consulting firm founded in 1991, said the most successful organizations understand that the purpose of any business is to create value for customers, employees, and investors, and that the interests of these three groups are inextricably linked.
“Sustainable value cannot be created for one group unless it is created for all of them. The first focus should be on creating value for the customer, but this cannot be achieved unless the right employees are selected, developed, and rewarded, and unless investors receive consistently attractive returns” he said in an article titled Value Creation and Business Success.
According to him, value creation for the customer, “entails making products and providing services that customers find consistently useful. In today’s economy, such value creation is based typically on product and process innovation and on understanding unique customer needs with ever-increasing speed and precision. But companies can innovate and deliver outstanding service only if they tap the commitment, energy, and imagination of their employees. Value must therefore be created for those employees in order to motivate and enable them. Value for employees includes being treated respectfully and being involved in decision-making. Employees also value meaningful work; excellent compensation opportunities; and continued training and development”.
“Creating value for investors means delivering consistently high returns on their capital. This generally requires both strong revenue growth and attractive profit margins. These, in turn, can be achieved only if a company delivers sustained value for customers,” he added.