Planning pays off: Set clear, written goals for your enterprise

Writing a business or personal finance plan can be a lot of work, but pays dividends in the long run. PHOTO | FILE 

By CANUTE WASWA

In Summary

• Safaricom mobile phone subscribers borrowed up to Sh30 billion worth of airtime.
• Okoa Jahazi, earned the telecoms company Sh3.1 billion in revenues.
• Safaricom charges a flat interest rate of 10 per cent for airtime credit, which is repayable in five days.

A news item carried in last Monday’s edition of the Business Daily was all the prodding I needed.
Safaricom mobile phone subscribers borrowed up to Sh30 billion worth of airtime.

This was nearly a third of the total airtime Safaricom sold last year, underlining how critical telecoms operators have become in the credit market.
The report said credit, extended to millions of customers through Safaricom’s emergency top-up facility, Okoa Jahazi, earned the telecoms company Sh3.1 billion in revenues. At Sh30 billion, Okoa Jahazi’s loan book was larger than that of some bottom-tier commercial banks —making it a significant player in the credit market.

I will get back to the story. But first let me refer you to a book that talks about planning.

In the book What They Don’t Teach You in the Harvard Business School, Mark McCormack tells of a study conducted on students in the 1979 Harvard MBA programme. In that year, the students were asked, “Have you set clear, written goals for your future and made plans to accomplish them?” Only three per cent of the graduates had written goals and plans; 13 percent had goals, but they were not in writing; and a whopping 84 per cent had no specific goals at all.

Ten years later, the members of the class were interviewed again, and the findings, while somewhat predictable, were nonetheless astonishing. The 13 per cent of the class who had goals were earning, on average, twice as much as the 84 per cent who had no goals at all. And what about the three percent who had clear, written goals? They were earning, on average, 10 times as much as the other 97 per cent put together. The popularity of Okoa Jahazi simply points to our culture of lack of planning of personal finance.

You see, personal finance isn’t something you master at a certain age or after passing a certain class. You have to work on it over time and adjust as your situation changes. It is like fitness or health.

Financial planning is a continuous goal in your life. This is because of two reasons. One, you can’t learn everything at once and secondly, different things are appropriate to focus on at different times in your life as priorities change.
As a strategic planning facilitator, I’ve seen this principle time and time again in organisations with which I’ve consulted. The most successful organisations commit to strategic planning on a regular basis no matter what the external environment is like. In good times and in bad times.

I asked a board member of one of our clients why they were bringing in a facilitator from the outside to conduct their planning session. Their growth numbers were high and they were a top performer among their peers. Things were going so well, why did they even need to do a planning session?

His response: “The reason we are performing so well is we committed many years ago to ALWAYS do a planning session every single year—no matter what. We believe that is the secret to our success. Every year we carve out time to focus on our strategy.”

You could even make the argument that if you are having financial challenges, that is the most important time to conduct a strategic planning session.

Back to my story. For Okoa Jahazi, a borrower who fails to repay within the set period is blacklisted and denied the facility for a period of two weeks.

Upon expiry of the two weeks, such a subscriber is restricted to borrowing small amounts before rebuilding their profile.

Safaricom charges a flat interest rate of 10 per cent for airtime credit, which is repayable in five days.
You may not be able to control the future, but planning creates a direction for you. Without it, you will likely take action only to address immediate problems—a kind of crisis management approach. Planning gives a structure to make day-to-day decisions that follow a larger vision.

And of course planning costs. But not planning—in the long run that’s even more expensive.

Mr Waswa is a management and HR specialist and managing director of Outdoors Africa. E-mail: waswa@outdoorsafrica.co.ke