One of the biggest mistakes organisations make during uncertain times is treating risk as something that happens to them. The businesses that perform well take a different approach, writes Lawrence Okumu, Associate General Manager, Minet Kenya Pensions.
Should you invest in growth when the economy feels unpredictable, or hold onto cash until things settle down?
It’s a question many business leaders are asking today. Rising costs, changing regulations, currency fluctuations and an uncertain business environment have made long-term planning more challenging than ever.
When uncertainty increases, many organisations instinctively slow down. Expansion plans are put on hold while investments are delayed and recruitment is paused. Some of these decisions make sense; others simply shift today’s uncertainty into tomorrow’s problem.
Consider two manufacturing companies operating in Nairobi’s industrial area, both import raw materials and are dealing with a weakening shilling, rising production costs and growing employee benefit obligations.
In one office, the finance director is still at work long after everyone else has left, refreshing exchange rate dashboards and recalculating budgets. A recent actuarial assessment has revealed higher future gratuity obligations than expected. Every decision now feels like a trade-off. Should the business postpone expansion? Delay equipment purchases? Reduce investment?
Across town, another company is facing the same economic conditions; the difference is that these conversations happened months earlier. The leadership team had already modelled different economic scenarios, understood how each one would affect the business and agreed on the actions they would take. When market conditions changed, they adjusted their plans instead of starting from scratch.
One of the biggest mistakes organisations make during uncertain times is treating risk as something that happens to them. The businesses that perform well take a different approach: they identify potential risks early, understand their financial impact and build those insights into their planning.
That changes the conversation in the boardroom.
Instead of asking, “What do we do now?” leaders begin asking, “What are our options?”
That shift creates better decisions.
A business that understands how inflation may affect future liabilities can prepare for it. A company that has assessed its investment portfolio before markets become volatile is less likely to make emotional decisions. An employer that understands the long-term cost of employee benefit obligations can plan funding well in advance rather than reacting when the numbers become uncomfortable.
Good decisions rarely come from certainty; they come from having enough information to evaluate different outcomes before making a choice.
This is where independent advice becomes valuable.
Business strategy, investment governance and actuarial analysis are often viewed as separate disciplines. In reality, they answer the same question: What could happen next, and are we prepared for it?
Minet Kenya works with organisations to answer that question through management consulting, investment advisory and actuarial services.
Management consulting helps leadership teams understand market trends, benchmark performance and evaluate strategic opportunities using data rather than assumptions.
Investment advisory provides greater visibility into portfolio performance, governance and diversification, enabling organisations to make more informed investment decisions during changing market conditions.
Actuarial services help organisations understand future financial obligations by modelling long-term liabilities, assessing funding requirements and supporting sustainable financial planning.
Together, these insights give leadership teams a clearer picture of the decisions in front of them and the risks attached to each one.
If your organisation is reviewing its long-term strategy, investment governance or financial obligations, speak to Minet Kenya’s advisory specialists at [email protected] or call +254 719 044 000.
