Proposed 2016 Budget: A Lesson in Skill Development for Nigerian Businesses
A good number of Nigerians appear shocked by what they consider less-than-desirable quality of the proposed 2016 budget. Whether they are right or wrong, it seems that the 2016 budget proposal is dotted with tales of priority misalignments as well as supposedly ample evidences of poor post-design review/evaluation in many of its pages. This piece neither attempts to evaluate nor assesses the quality of the 2016 proposed budget. Nevertheless, it asks one question in that respect: what could have been responsible for all those short comings observed in the proposal?
Successfully, making national economic budgets requires first and foremost good understanding of the vision and goals of the government in power. This knowledge has to include the specific attendant fiscal activities already (or should be) drawn up for the purposes of realizing those goals particularly within the year in question. By extension, reasonable understanding of macroeconomic policy and public choice economics as it applies to our socio-economic circumstances is very important. That notwithstanding, it is also needless to say that a university degree in economics is not required for anyone to possess these budget making skills. Apart from economics, the second critical skill here is some working knowledge of project management which enables the designers and budget modelers to realistically track and estimate costs of budget items. Oftentimes, this skill is mashed with basic or cost accounting knowledge, but the gap is usually evident when one of the skills is lacking. The third and extremely important of these is the forensic data analytics skills which combines within it strong statistical capabilities and the ability to query the budget data, fish out inconsistencies, make more realistic statistical estimates where needed and ensure better budget by the end of the day. To what extent were these skills present in the makers of the proposed budget?
Unfortunately, we shall not answer the question since, this essay is not about the proposed 2016 Nigerian budget. It is more about drawing crucial lessons from the similarities that exist between the role that relevant skills should play in making a robust 2016 budget-proposal outcomes vis-a-vis same role in the performance outcomes of most organizations. Virtually all failures in business performance are attributable to the existence or lack of reasonable quantum of the skills and competences needed by its human resources at various levels. One of the biggest errors that tag on this truth and regrettably delay the the needed change in many organizations - as far as this is concerned - is the often mistaken assumption that the more the years of ‘experience’ of its manpower, the better the skills that the organization needs in order to succeed. Of course many good experiences obviously come with more years of work. Some may be relevant for succeeding in work being done or career pursued, while a lot more may be relevant only in other spheres of life. Therefore more years in work does not automatically mean that the skills for making a difference in a job come with more years spent in either an organization or even a profession. Not at all. Every good thing must be worked for and acquired. And so it is with the skills for robust positive corporate performance. Thus, persons who want to boast of their years of experience must make sure that those years have been actively spent acquiring the best skills needed to perform optimally at each stage in career progression.
Ideally, the capacity of a senior member of staff to effectively mentor and/or supervise others - for instance - lies more or less on the depth and wealth of skills and competencies that are available within him to pass on. No one gives what he does not have. On the contrary, many organizations regrettably assume that after some of their members of staff have stayed in a role and have been promoted to a higher position that they automatically possess those needed skills and competences and thus invariably qualify to supervise others. This is the root of management performance disaster. The truth is that unless the staff in question has been exposed to and have been confirmed to have reasonably acquired most of the skills needed to successfully operate at the immediate past levels; and have been adjudged to have optimally used same to the satisfaction of the organization, the quality of that supervision and mentoring may be treated cautiously, and will obviously not be at the best possible level of productivity. Typically in evaluating the adequacy of skills deposited in an employee, comprehensive bench-marking (of the employee against his/her peers in other organizations and against his/her performance levels relative to targets set for him/her in the organization) is necessary.
Unfortunately, many of us are aware of lots of senior management staff that apparently have lots of years (of supposed experience) in the industry to their advantage but lack the skills and other competences needed to function as good assistant managers even in the same firm where they currently work. This challenge was quite commonplace in the banking industry (I do not know what the situation is like now) when members of staff climb the ladder merely by mobilizing deposits from where ever they could. Do not get me wrong. If for instance one has such deft marketing skills that can be easily learned by others and which can be replicated by virtually anybody whether it is Japan or Pakistan in addition to other critical skills then rising through the ranks with such performance may be justified. But, rising solely on the back of ones corporeal and groin qualities without other critical complementary skills and rising beyond the level of a deputy manager may not be the very best for the future of any good organization. This is however not limited to the banking industry but cuts across virtually every industry in Nigeria.
At the risk of over generalization, substantial percentage of the senior management staff in most Nigerian organizations lack the analytical capacity they need to effectively stand their strategy formulation and implementation; skills they ought to have acquired at much lower levels. Many times we hear some members of executive management quip, “you know I am not a numbers person”. Understandably, different persons have different fascinations and strengths, but clearly not desirable to claim apathetic about numbers at a directorate level. How can such executive director develop and efficiently monitor strategies based on empirical conclusions and knowledge buried in management data - human resource, financial, marketing etc. - over time. At a certain level you must be prepared to frontally confront numbers. Again, sometimes we also hear such defeatist reactions like “what I know is that I am sufficiently knowledgeable about this industry to make a decision”. Perhaps the era when such local knowledge offered strong competitive advantage is long gone. The ‘Oyibo’ man gets his own - even deeper - equivalent of local knowledge by analyzing tons of structured and unstructured data across geographical and other dimensions. Numbers give enormous knowledge power! Today’s world is a global village and the greater understanding of data we have and how to make sense out of them the more informed we are of anything. Thus, expatriates may be strangers but through their analytical strength they often times do better than us in even understanding our local environment.
So without such critical skills as already mentioned, it is without question that our budget proposals will be defective; that our supposedly achieved levels of performance will be less than optimal and; that we may not really take advantage of those supposed strengths that we think are in our favour. The man without strong analytical competencies is not really roundly educated. Even good logic has a basis in mathematics and is made better with concrete statistical evidence. That is how it is for all of knowledge and should be for any business with a future. We can help you acquire this kind of knowledge.