The repercussions of the ongoing crisis in Lebanon have knocked on every door, be it businesses, homes or the public sector. Whilst companies cannot ignore the crisis, there are strategies to mitigate them in order to self-sustain, achieve growth and collectively contribute to the circular economy. Wakilni, a logistics and services partner for thousands of small to medium enterprises (SMEs) in Lebanon, is well positioned to understand the core needs of businesses and tailor its offerings to support companies to grow.
The human element is at the forefront of today’s challenges, namely talent. This is often echoed in the private sector space where the brain drain phenomenon has left businesses struggling to identify, attract and retain top talent. Younger talent specifically is rushing to leave. This comes at the cost of lost investment; searching and onboarding new talent can cause delays from an operational standpoint. In addition, when operating in times of crisis, company cultures may be impacted due to external pressures, impacting the work environment, as well as customer satisfaction.
Clients too, are keen to set up abroad, downsizing local operations, and impacting servicing and logistics companies across Lebanon. Moreover, the cost of living has become unsustainable for many – both talent and the business owners, prompting more than 4,500 people to leave Lebanon on average per month between January 2019 and mid-October 2022, based on numbers issued by the General Security.
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From a commercial aspect, challenges are prevalent when it comes to pricing and costing services. Due to the currency devaluation, and without a clear exchange rate – from the official banking rate, to the black-market rate – businesses are losing. The banking sector has taken no strides to rectify this lingering issue or provide any sort of certainty or regulatory framework for businesses to abide by. To provide context, in 2022, Wakilni’s revenue per service produced amounts to approximately one-fifth, or 20 percent of the same service provided in 2019.
The regression of public sector services has also created further difficulties for doing business, due to power cuts, resource shortages and employees disgruntled by collapsed salaries. Private sector companies now have backlogs of crucial paperwork tied up in the government’s hands, with no clear deadline for completion.
How have we adapted and grown during the crisis?
The answer is one that is layered and complex. Firstly, the importance of civil society has grown in the absence of a government and as a result, a solution-oriented mindset has been adopted. The private sector is a major part of civil society, and we find that collaborative efforts have led to sustainable solutions.
In this case, we see our role as twofold. The first being how to self-sustain the business, and the second being our role as part of the circular economy. In the latter area, we ask ourselves often what initiatives we can lead or be a part of that will have a positive impact on civil society in general, but would also contribute to the sustainability of our operations.
Predating the crisis, Wakilni’s strategic pillars have always been solid. With the advent of the crisis, we had to adapt how we do things to stay afloat, but also continue to identify expansion opportunities – be it through geographic growth or vertical integration.
At the core of our strategic priorities, are people and communities. We set up a Human Resources department early on; focused on talent retention, leadership pipelines, an internal education and development arm, as well as carefully studied financial facilities. We created loan facilities, subsidized medical support, summer camps, barber and manicure services, and even set up a nursery within our premises. These strategic steps have yielded positive outcomes to date, and fostered a sense of community even more.
On the business front, we are focused on scalability, including the institutionalization of all our processes. This has enabled us to expand our services and generate foreign revenue streams. This step has also created new opportunities for the team to broaden career horizons. Wakilni’s leadership is also geared towards vertical integration, through the increase of services, based on market demand.
On the other hand, our continuous technical innovation is powering what we do. We found that if we modernize our internal processes and offer clients access to innovative features and tools, we can operate at higher levels of efficiency to get the job done. We have integrated tech features to streamline operations, such as traceability, access to full visibility on order status, as well as an overview of KPIs that are integral to businesses.
With these key foundations in place, the sustainability of our business operations comes naturally. We have recently added sustainability as one of our core pillars, although it has been embedded in our ethos from the start.
A focus on society
We are part of a grander ecosystem and it is our responsibility to give back to society and positively impact various segments where we have expertise. One such area is our impact on SMEs. In 2023, our focus is to implement strategies that allow for both service and market expansion. When we set up in new markets, the SMEs which we service can also follow suit. One example is the dark store, which enables clients to test their products or services in new markets, before making an investment. Driving this is an approach to advancement from a technological standpoint, as well as a commitment to the community. Our regional and international strategic partnerships enable clients to ship at minimal costs, store and process their orders, while maintaining full visibility on their businesses. This ultimately allows for revenues to be generated from new markets, with low exposure to risk.
Alongside enabling market expansion for others, we have also explored how to augment opportunities for our drivers – who make up the majority of our workforce – to have access to greater benefits and achieve more job security. We plan to set up mutual funds, to support our drivers to sustain their professions, and also benefit from insurance and preventive maintenance.
But despite our achievements, we still lack the fundamental basics.
We need the basics to operate
We need the proper infrastructure in place that allows for business continuity, with minimal disruption. We also demand return for the taxes that we are paying. We need guaranteed security and safety, which allows for some level of certainty to validate our mission to remain rooted in Lebanon.
Moreover, when looking at expense sheets, the ledger is no longer balanced. We, as well as other businesses in Lebanon, are incurring double and triple the expenses, which is not sustainable. With the dawn of every day, a new crisis emerges. We hear this from our team, and the companies which we serve, that if only we were given the space to focus on the business and the bottom line – we would be light years ahead.
We admire the companies that have remained committed to operate and grow from Lebanon. We are one such company. But without the proper systems in place to allow for growth, for how long is it sustainable? Our experience has taught us that what every business, individual and organization needs is a state that sets viable strategies, one that is agile in its decision-making processes to support SMEs, which are the key drivers of the Lebanese economy. Such decisions that impact businesses include the identification of sectors, services and products that should be supported through subsidization, with clarity at the expense of whom this will happen – whether through taxes or other means. We also call for a state that is held accountable – just as our businesses are, through proper governance systems.
On a national level, we call for the government to prioritize the relationships between societies on an internal level, and concurrently regulate, maintain, and foster relationships with other markets internationally. Ideally, we aspire to operate within a state that builds a sustainable economy that serves society, as opposed to the current sectarian regime that has continually proved its willingness to sacrifice society as a whole, to maintain the status quo that benefits a fraction of the population.
