Patience Siwadi

 REPORT ON THE CURRENT SITUATION AT STEELMAKERS ZIMBABWE COMPILED BY PATIENCE SIWADI FEBRUARY 2012 REPORT ON THE CURRENT SITUATION AT STEELMAKERS ZIMBABWE Preamble This report is a pre strategic planning exercise report to analyze the situation of Steelmakers on the ground. The purpose of the exercise was to provide a diagnosis of the current situation which will highlight the strategic issues worthy of management attention before embarking on strategic planning session. A total of 9 Heads of department were interviewed by the consultant who requested each to be as frank as possible. The idea being to determine Where we are now What is the nature of planning and who is involved What is happening in the different departments What is missing that is causing production to remain stagnant Findings The findings were based on interviews from the nine managers, observations by the consultant and insights from stakeholders who have dealt with Steelmakers. Company cohesion The general consensus was that there was a general lack of cohesion within the company with each department operating as an autonomous unit yet practically all units feed into each other. The actions of one department has profound effects on the activities of another for instance the current situation is production per order where the marketing department obtains orders, which are communicated to the production department which plans the production depending on the available materials. If materials are not there then material department has to order and accounts then pays. The lack of coordination has resulted in orders dating back 3 months which have not been filled and procurement terms have become more stringent as some suppliers were not paid for 4 to 5 months resulting in loss of credit terms, loss of trust, loss of reliable suppliers and ultimately loss of money to the company. Furthermore this has damaged the image of the company with important stakeholders like the municipality and banks, stakeholders who have the ability to bail the company out. Planning issues All departments have interviewed indicated that they are up to date with their planning. In the majority of cases the planning premise was one year. The departments seem to have the requisite people to undertake the plans. Company-wide planning started in November 2011 but there is no evidence yet of the results of the sessions. To date January and February 2012 production has the lowest since 2010. There was a general consensus that the plans were presented and agreed upon but some of the objectives have not been implemented because of lack of resources. It was however noted that in some instances it is not a lack of resources but seemingly a lack of information about the resources. For instance the consultant was told that certain products could not be produced because of the shortage. But there do not seem to be innovative effort to come up with solutions to the shortages but to continue to reiterate over unavailability of the said material. It can then be concluded that the instances where the right hand does not know what the left hand is doing may be more than the ones alluded to and may have negative effects on the implementation of the company’s strategies. The other concern was how complete the planning was because when objectives are set, the planners also have to agree on the ‘how’ part, that is what resources are required, who is responsible and priorities. The question of lack of resources would then be minimized because it would have been planned for. Organizational structure Steelmakers has a rather tall organizational structure evidenced by the many levels of managers in all functions. This has resulted in managers managing other managers and there is concern of the value addition of each management level. Tall structures affect communication speed and in turn decision making. Thus creating beurocracy. Furthermore, some functions which are normally grouped together in similar situations are not working hand in hand at Steeelmakers. For example the marketing department is related to the customer service and the public relations departments but in this case they seem to be stand alone departments which do not leverage at all from each other. Ideally the structure of an organization should follow strategy. Human resources issues The biggest issue which was noted and also observed was the boundaries and barriers between locals and foreigners. There was little evidence of cultural integration. Such distinct separation is fast disappearing in emerging economies that applaud the wealth of diversity. Issues which might fuel the afore mentioned lack of cohesion which may result in lack of coordination, lack of appreciation of one another’s roles and lack of appreciation of one’s presence. Further probing brought out issues of de-motivation caused by instances where an experienced local trained an expatriate who subsequently manages them. Combined with issues of lack of cohesion is debilitating organizational politics which negatively affects productivity. Strategically speaking, structure must follow strategy and rewards ideally must be tied to the strategy. This was not evident. The time was too limited to verify in depth but given the observable the question of cohesion, team spirit, togetherness and shared vision still linger. Resource utilization The company is clearly pursuing a strategy of self reliance and has invested heavily in ensuring the availability of raw materials from reliable sources. It is against this background that the consultant concluded that the popular song of ‘lack of resources’ was given as an excuse or as a symptom of other underlying issues. It seems that it could be more of a case of resource utilization than the lack thereof. For instance, Steelmakers has the major producer of steel in Zimbabwe for close to 10 years which was a huge opportunity to make major inroads into every town in Zimbabwe. To date depots exist in 4 major towns but unfortunately none of them have stocks of steel. Further to that Steelmakers has a special relations with the government given its history. Such political clout is a great intangible resource at a time where interventions are of utmost importance. The consultant was not privy to internal affairs of this nature but can conclude that such clout can and should open doors for the necessary resources. It is against this background that a strategic planning workshop is proposed. Modus Operandi It is proposed to have a Strategic Planning Exercise which will be divided into 4 parts. Part 1 This is the planning stage which involves The just completed company’s internal analysis to determine the current position. Preparation of workshop materials including reading material for the workshop participants. No one is a monopoly of knowledge so some participants may not have had previous experience with strategic thinking. So the facilitator has prepared and sent reading material for participants to read before-hand so everyone will be up to speed. Site visit for the facilitator to familiarize herself with operations so she can best assist to make informed decisions. A meeting to discuss workshop modalities and selection of the workshop participants. Part 2 This is the workshop itself . It is proposed to have the workshop over a 2-3 day period on the 9th and 10th of March at a venue that provides maximum cooperation. Guided by the facilitator, members are expected to complete crafting the draft/skeleton of the strategic plan. Part 3 Writing of the Strategic Plan and presenting to the executive who will make the necessary additions which will inform the final report. Part 4 An evaluation will be done after 6 months using the Results Based Management premise to determine if the strategy is still on course. Conclusion Strategic planning is a rigorous, painful exercise with long term rewards for the organization. It must be emphasized that it does not end with a beautiful, glossy document but the plan must be implemented with entrepreneurial dedication and commitment. Further to that it requires new thinking not merely thinking outside the box but actively burn the box and think afresh and at times breaking with the past to create a vibrant organization here today and into the future. Quotation Activity Duration Charge Total Preparation 3 days $ 400.00 $ 1200.00 Workshop facilitation 2 days $400.00 $800.00 Report writing 2 days $400.00 $800.00 Grand total $ 2800 The charges exclude venue, travel, meals and refreshments.