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Why Kenyan companies need to review their reporting systems – Business Daily

Working with a client who specialises in governance, it quickly became clear where the issues are that can save businesses millions in costs and transform entire economies.
For, very frequently, our organisations stumble in the same two places — the centralisation of responsibility, and flawed co-ordination — to such a degree that fixing both problems can completely change performance.
A case in point was an export licence process that the client had redesigned for another nation, where it found that the head of the export licensing agency was the only person authorising that country’s export licences.
That agency head had quite a lot of other responsibilities too —managing staff, taking part in meetings, committees and technical working groups, briefing politicians — leaving far fewer than 40 hours a week for approving export licences.
But, even at 40 hours, a single sign-off on an entire nation’s trade, carton by carton, amounts to a horrible bottleneck and was creating inordinately long queues for licences. When the process was redesigned with all but high-risk licences approved by a senior cadre, turnaround times fell, and the capacity for export growth ballooned.
Yet, it isn’t only agencies where central concentration can slow a race car down to the speed of a horse and cart. It has surprised me many times just how many decisions, in many Kenyan companies, can be taken only by the CEO.
Marketing can be grounded, PR stalled, sales delayed, new products, IT tools and office equipment halted, waiting for the ubiquitous CEO sign-off, as that same CEO takes calls from complaining customers, myriad stakeholders, and is preparing board packs, and running department heads too.
Yet the problem is rarely the capability of other senior or mid-ranking executives to make decisions or do the tasks, but inadequate mechanisms for oversight, which is the second area where we frequently go wrong.
If an organisation wants to protect itself from risks, spot emerging issues and trends, and seize opportunities, management and the CEO, need sight of what everyone is doing: yet who can take all day staying abreast with every operational and service department?
Thus, at the crux of our centralisation sits, very often, an unresolved challenge with business visibility, thanks to poor reporting structures and the bias towards ‘good news’ for the boss.
Yet, if the CEO deconstructed what he or she looks for, as red flags and green flags, and created a reporting format that reflected his or her own analytical process, the horse and cart could start to pick up speed.
The trick is process re-engineering and creating a reporting system that replaces a sign-off on every decision with oversight of the strengths and weaknesses of all the decisions.
The writer is a development communication specialist



Joseph Muongi

Financial.co.ke was founded by Mr. Joseph Muongi Kamau. He holds a Master of Science in Finance, Bachelors of Science in Actuarial Science and a Certificate of proficiencty in insurance. He's also the lead financial consultant.