CEOs in sub-Saharan Africa develop resilience and agility as they navigate an evolving and complex business operating environment, according to PwC’s “Africa Business Agenda: Business Operating Environment Perspective 2023”.

To enhance business sustainability and performance, they can diversify their products and services, streamline operations to focus on core competencies aligned with their purpose, collaborate to drive impact, invest in attracting and retaining talent, and prioritise good governance, sustainability objectives, risk management and cybersecurity.

These and other strategies help organisations to achieve balance, which can feel like a moving target.

Jan Groenewald, PwC Africa deals leader, comments: “CEOs in Africa may have an advantage when it comes to dealing with a challenging business environment. Given the history of the African political environment and periodic challenges to peace and security as well as significant climate events, CEOs that are familiar with doing business on the continent may have a better chance of navigating Africa’s unique business environment.”

Business is a balancing act

There are many strategies for managing this balancing act and maintaining a dual focus. CEOs in Africa highlight efforts to diversify their product and service offerings and streamline their operations, focusing on areas that are core to their brand and purpose.

Groenewald says that this balancing act is not new, but it is an evolving challenge complicated now by factors like technology, geopolitical supply chain and climate disruption and local factors like load-shedding.

“CEOs that succeed in maintaining the balance will instil in their organisations the agility to manage through disruption without losing sight of longer-term, strategic initiatives. After all, those longer-term initiatives will build the agility and competitiveness needed to navigate the disruptions and opportunities of tomorrow,” he adds.

Short-term solutions also require a long-term view

Africa’s business leaders have also told us that when businesses are facing headwinds such as inflation and challenging macroeconomic conditions, it is no surprise that reducing costs (91%), diversifying products (90%) and increasing prices (74%) will be top of mind.

The choices they make, however, are key to the success of the business. Even when searching for a short-term solution, CEOs need to apply a long-term view.

Pieter Crafford, PwC Africa Strategy& leader, says that knowing when your cost base is not aligned to the areas which will drive top line growth, or when certain areas of your business have started not making economic sense, is a critical factor.

“Understanding the cost-to-income ratio at a detailed level is vital as it allows a business to extract wasteful costs from areas which will not drive future growth and re-invest this in parts of the organisation which have or require differentiating capabilities,” Crafford adds.

Collaboration supports impact

The survey shows that the balancing act of business can further be supported through collaboration, but collaboration requires trust. Partnering with other organisations to deliver more value to stakeholders or to address societal challenges is not always a common approach, according to CEOs in sub-Saharan Africa.

Only 31% identify the government as a partner or collaborator in addressing societal issues, and a smaller percentage work with industry consortia, NGOs or competitors in a collaborative manner. And yet collaboration can have a beneficial impact, not just in addressing some of the societal challenges that can destabilise the business operating environment but also in building stronger, more agile industries.

Talent drives performance

Organisations in sub-Saharan Africa that successfully navigate change tend to invest significantly in talent and supportive performance cultures. These investments only really deliver value where there is sustained retention of talent. And, although 53% of CEOs in South Africa may not anticipate any change to retirement/resignation rates at their companies, 42% of CEOs in Africa overall expect this rate to increase.

“There is now a need to deploy technologies such as artificial intelligence to optimise the time spent by employees at work”, says Emma Whalley-Hands, PwC Africa operational restructuring leader. “This allows for businesses to free up different parts of employee activity profiles to redirect talented people, and those with specialist skill sets, to areas where they are needed most.

“This way the machines and other digital tools can be deployed to speed up the more mundane, bureaucratic and duplicate activities,” she adds.

ESG strategies build trust

Through the survey, PwC noted that, increasingly, more stakeholders expect organisations to be purpose led and committed to contributing towards important ESG goals. The report also looks at how purpose-driven companies are reaping the benefits of focusing on the triple bottom line of people, planet and profit and positioning themselves for sustainable success.

However, the company’s recent “Africa Business Agenda: ESG perspective” publication reported that just 50% of sub-Saharan African companies are working on or have delivered a data-driven, enterprise-level strategy for reducing emissions and mitigating climate risks, compared to 65% globally.