Fortune News | May 25,2019
Jun 22 , 2019
By Haben Mehari ( Haben Mehari is an entrepreneur and a postgraduate student at Addis Abeba University. He can be reached at firstname.lastname@example.org. )
Before the privatisation commences, work should be done in advance to ensure that everyone at the top agrees about the case for the change and the particulars of implementing it, argues Haben Mehari, an entrepreneur and graduate student at Addis Abeba University. He can be reached at email@example.com.
Ethiopia is on the verge of a paradigm shift. The government is going through the steps of privatisation, and now the Ethiopian parliament has approved a draft law that enables companies to invest in the telecommunications industry. This is the first step for the start of partial privatisation of state-owned enterprises, an unprecedented event not seen in Ethiopia in a generation.
When it comes to change, risks come inherently with it, but most people have a misconception when it comes to the word risk, associating it with something negative and to be avoided. We even hear it in regular conversations, “Oh, this is too risky.”
However, risk is just the probability of an outcome being different from what we expected, and this probability can both be negative or positive. That’s why the dictum goes “the higher the risk, the higher the reward.”
When we go through the literature on how to properly manage change, the guiding principle is to lead with the culture. Lou Gerstner, former CEO of IBM, used to say that the most important lesson he learned from his experience was that “culture is everything.” Skilled change managers make the most of their organization’s existing culture.
In analysing these issues, I came across work done by Geert Hofstede (Prof.) who has been studying national value differences since 1965 and who has developed the Hofstede model of cultural dimension to quantify cultural differences across international lines to understand better why some ideas and business practices work better in some countries than in others.
There are six cultural dimensions of Hofstede’s framework: power distance index, individualism vs collectivism, uncertainty avoidance, masculinity vs femininity, long-term orientation vs short-term orientation and indulgence vs restraint.
One of the models is of interest here. The uncertainty avoidance, which according to Geert Hofstede, is “the fundamental issue how a society deals with the fact that the future can never be known - should we try to control it or just let it happen?”
The uncertainty dimension relates to the degree to which individuals of a specific society are comfortable with the unknown. Weak uncertainty avoidance comes with the following features: undertaking risk, flexibility and tolerance toward differing opinions and behaviours. The following aspects represent strong uncertainty avoidance: tendency to avoid risk, organisations that have several standardized procedures, written rules and clearly delineated structures; strong requirement for consensus and respect for authority.
Uncertainty avoidance is the anxiety and distrust in the face of the unknown, and conversely, with a wish to have fixed habits and rituals. In contrast, low uncertainty avoidance cultures accept and feel comfortable in unstructured situations or changeable environments and try to have as few rules as possible. People in these cultures tend to be more pragmatic and more tolerant of change.
In the uncertainty avoidance dimension, Ethiopia has received an intermediate score of 55, with the highest score of 112 for Greece and the lowest score of 8 for Singapore. Countries with a low score tend to be more entrepreneurial. Ethiopia has had its own share of uncertainty, and Ethiopians have shown time and time again to embrace uncertainty in the political climate, but the same cannot be said in the economic front, the recent ban (that has since been lifted) of RIDE being a prime example.
The role the government has to play in effectively managing change in the country is crucial. Another fundamental principle in change management tells us that change has to start at the top. All successful change management initiatives start at the top. Before the privatisation commences, work should be done in advance to ensure that everyone at the top agrees about the case for the change and the particulars for implementing it. Let us not make change painful, let us understand our culture, start at the top and make the change.
PUBLISHED ON Jun 22,2019 [ VOL 20 , NO 999]
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