If we agree that character has value, then it follows that anything that diminishes that character represents a risk. This means that when certain people, holding a particular stature in society go about talking badly (truthfully or maliciously) about your person or company, this, will have the impact of minimising your person or the company’s reputation. Reputational risk is, therefore, a threat or danger to the good name that depletes the reputational capital of the person, company or institution.
Since 2000, several issues including but not restricted to the chaotic land reform programme, the weakened rule of law, insecurity of tenure, the dodgy electoral environment, the sham electoral outcomes and the offbeat and unconventional fiscal and monetary policies followed, contributed to the depletion of Zimbabwe’s good name and amplified its reputational risk.
With the current Cabinet predominantly populated with actors who worked hard to defend this misanthropic and dogmatic past, it is going to take more than “Zimbabwe is open for business” utterances to get the country where it would have been had these uncompromising, unchallengeable and hazardous 17 years not happened.
One of the underpinnings of a good reputation is trust. When trust is eroded, it takes long to build it back. Words are cheap and can be hollow. Concrete action, in the form of prioritising the fixing of Zimbabwe’s infrastructural issues, such as, consistent power supply, safe water delivery, road, rail and air transport networks and healthcare, just to name a few, is what is going to deliver desired outcomes.
At citizen level, individual Zimbabweans were not spared either. Most Zimbabweans lost their ability to be masters and mistresses of their own destinies. Personal confidence was lost. A significant number of the population left for neighbouring and overseas countries as either political or economic refugees. Although many Zimbabwe citizens have settled in those foreign countries, many more feel displaced. There are many daily constant reminders of your second-class citizenship status. Very few countries are welcoming of migrants coming from countries with a raised reputational risk. The desperation of the migrants is a basis for exclusion and exploitation.
But many Zimbabwean citizens stayed. Whether one chose to stay or chose to leave, both groups suffered double jeopardy. Zimbabweans were judged harshly. Communities around the world condemned Zimbabweans for being generally highly educated but failing to remove former president Robert Mugabe. This played out in many offshore business dealings, where, because of the country’s heightened reputational risk, the terms of engagement would be skewed against transacting Zimbabweans.
Back at home, the scramble for Zimbabwe continued with the well-heeled and connected politicians leading the pack. Ordinary citizens were able to scrounge for the fewer resources made available to the public. As hopelessness and helplessness set in, in midst for economic survival, personal values were shelved and left suspended as if they were drapes hanging outside to dry on a laundry line. As a result, Zimbabweans were left with no unifying doctrine. Business ethics and most importantly personal governance of self were severely compromised.
Close to 100 days after the ushering of the new dispensation in November 2017, there is a great sense of hope, but our mindsets, our psyche, our collective ethos, that which informs our characters, remain at old dispensation level. We lost more than our capacity to have decent livelihoods during the last 17 years. We lost more, our collective value system, that which makes us a unique nation. A great value system is like spilt milk, once it is scattered, is hard to gather. I must concede, however, that not all was lost because I witnessed a glimpse of our collective value system on November 18 2017, when we marched from Highfield to the central business district (CBD) in support of the removal of a tyranny in our midst. The fact some 1,5 million marched in the CBD and there was not a single report of mayhem signalled hope, optimism and a great foundation to build from.
Your personal and business reputation has value; guard it with everything you have got. Let me use my previous experience in banking here as a metaphor. With a team of several persons, I helped set up what used to be called the Zimbabwe Banking Corporation Small Business Services Division. The late 80s to early 90s was a period when the government, together with the banking sector, had a huge commitment towards the development of small-to-medium sized enterprises (SMEs). As bankers in the new arena of SME financing, we learnt about people, character, honour and entrepreneurship in a way that no tertiary institution could have taught us.
One of the criteria, albeit very traditional that we used in appraising business proposals from the SME sector were the three Cs, collateral, capability and character as follows:
Collateral — is the security, preferably immovable, which is available. The bank would secure the title deed and register a first or second mortgage on the property as security. We became creative and if the business loan was going to be used to buy equipment for the business, the bank would have a lien over that business equipment. This is risky if you are operating in a low trust environment. A rather simplistic example, but it forms the essence of what collateral we secured from the SMEs.
Capacity — involves assessing for managerial capacity to run the business, including analysing the skill sets the project promoter and their employees had in the business to be funded. For example, if a lawyer wanted to set up a property development business and they were going to do the work themselves, we would obviously be worried and probe the applicant further. The status of the application would obviously change if the project promoter who was a lawyer by profession had a team of qualified project managers, foremen, brick layers, carpenters, engineers, roof technicians and so on, to execute all the construction projects.
Character — entailes an assessment of the character of the project promoter. In a nutshell, this included investigating the level of indebtedness of the person with other people, organizations and financial institutions. We also tracked down people who had transacted with the person and asked them to provide objective remarks.
The personal interview also provided a lot of clues about the nature of the project promoter. During the interviewing process, we paid attention to people who did not answer the questions asked, body language and reading in between the lines. These are all very subjective clues but in banking, one acquires experience over time on interviewing potential borrowers. As they hone their skills, they also sharpen their competency around hearing the unsaid during that communication process.
There were many issues that came to the fore, but of note was the fact that, for funds that were meant for women entrepreneurs only, there were entrepreneurial men who would attempt to use female members of their household to front for them. This also happened in situations where the men had bad credit ratings. During the interviewing process, we quickly picked up from discussing the essence of the business that the female member of the family was being set up after it became increasingly apparent that it was not their business idea to start with. A person who uses fronts for whatever reason is not of good character. Therefore reputational risk is high.
We also observed that, eighty percent of the projects where we had assessed the character traits right, thrived. In giving character, the largest weight amongst the three Cs, we saw many borderline SMEs whose promoters were genuine and authentic grow from strength to strength and succeeding. Those that seemed viable at the outset but had dubious promoters whom we had given the benefit of the doubt, initially seemed like they were flourishing, but due to character flaws of the promoter faltered and eventually failed. Character flows included, diverting of business proceeds for personal domestic consumption, unnecessary travel overseas, etcetera.
What many people do not realize is that your character is your passport to opportunity as it determines your credibility and integrity. It impacts on everything you do at home, socially and particularly in business. It is impossible for a person to have a different personality at home, another different one with friends and yet another different character at work. If that is the case and you are a potential lender to this person, be very worried. Consistency is a key ingredient in good character development. When you are inconsistent in your deeds or what you say is at cross purposes with what you do, you ought to be doubted.
Character is everything. An experienced lender ignores their intuition at their own peril. That is one of the fundamental reasons why people prefer to transact with either with people they know or who have been recommended by people they trust and whom they have had a good track record with. This is because the person who is being referred or who is already known to you or others has had their character qualified or validated through one means or another. Great qualifications in your field of expertise alone, are an insufficient condition to give you the right of passage to participate in certain transactions.
For the wise, golf courses are predominantly for cutting deals.
It is said that a lot of business deals are generated, discussed, apportioned and concluded on the golf course. This is because golf players spend a lot of time together, walking the course, talking and of course playing the game. An 18-hole course, takes some five or more hours to play. If say two teams of two people each play just twice a week, that is forty hours of sharing and of course bonding which is necessary in business. Escalate that to twice a week for say 40 weeks per year, that amounts to some one thousand and six hundred hours of talk and bonding time.
Perhaps that is why golf mates first seek each other out when opportunities present themselves than accommodate someone from “outside”. This is because, when you spend one hundred and 60 hours per month of playing, walking, talking, bonding and laughing, you are bound to know each other well enough.
If you change your playing partners every month, it means you are expanding your territory of networks, people who can vouch for you. After everything is said and done, it is the intangibles that matter, intangibles like authenticity, credibility, reliability, trust, dependability and character is a total sum of these.
Your character determines your credibility and integrity; guard it with everything you have got. Zimbabweans ought to go back and embrace the values that once made Zimbabwe a prosperous and an admirable nation. That journey starts with each and every one of us.
Gloria Ndoro-Mkombachoto is an entrepreneur and a regional enterprise development consultant. Her experience spans a period of over 25 years. She can be contacted at email@example.com