Diversification is a risk management strategy that creates a mix of various investments within a portfolio. A diversified portfolio contains a mix of distinct asset types and investment vehicles in an attempt to limit exposure to any single asset or risk.
Communicating effectively
More often than not, managers and business owners do not communicate effectively with their workers. It’s important that communication with staff doesn’t only occur around negative instances but positive achievements need to be communicated as well.
Communication and feedback is the key to a successful working environment, and helps to engage staff and reduce turnover because people learn, opportunities are created for professional and personal development, it boosts morale and loyalty and it provides insights into how your business is running.
We often make mistakes in the way we communicate with staff and such mistakes include but are not limited to:
- Only ever giving negative or redirecting feedback.
- Sandwiching negative feedback in between two positive feedback messages – the person will only hear the good.
- Storing up 12 months of feedback and dumping this on employees in one meeting.
- Being insincere when giving positive feedback.
- Not being direct enough or honest enough – fluffing around the issues.
- Yelling, screaming or getting emotional.
- Communicating in an inappropriate forum – for example email, publicly, hallway conversations.
- Making it personal – it’s not about you, so focus on the receiver.
- Being unprepared and trying to ‘wing it’.
Try these effective communication techniques instead:
- Be balanced – provide positive and negative feedback when it’s due.
- Be direct and honest – provide truthful feedback.
- Be timely in your feedback and communication as it happens – don’t put it off.
- Have a script so you can practice and prepare what you’re going to say – be specific and use examples.
- Be prepared and don’t match behaviour – you’re the manager and you need to display a calm approach.
- Always communicate face-to-face – so much is lost in translation when you shoot off emails.
- As a general rule – praise in public and criticise in private.
- Focus on the facts – have all the right information and evidence if possible, and use examples.
Below follow examples, guidelines and tools to communicate effectively around specific issues:
- Constant lateness
An employee is constantly late to work. You’ve spoken to them informally, but now you want to speak to them in a more formal setting. To solve the problem, you should organise a meeting with your employee, go through the actual dates and times they were late – be specific, ask them if there’s a reason why they’re continually late – listen and give them a chance to speak, document the conversation to place in their file, give them a copy and ask them to agree to try to be on time in future.
- A job well done
An employee has completed a major project and you want to give them positive reinforcing feedback. To give great feedback, you should organise a meeting with your employee, gather all the information about the project, be generous and specific with feedback, explain how their contribution has benefited the business, be prepared and be sincere – practice if you need to.
- Dealing with redundancy
You’ve had a downturn in work and need to make an employee redundant. To best support the employee, you should organise a meeting with your employee, prepare a formal letter to help structure the conversation, be prepared for the employee’s adverse reaction, listen to the employee if they want to vent or voice how they’re feeling, don’t avoid the situation if they get emotional, be professional – don’t promise things you cannot commit to.
- Staff not working well together
Your team are having issues communicating with each other. You need to get them together to outline your expectations about how you want them to work together. To deal with this issue, you should organise a meeting for the whole team, ask the team to voice their frustrations in a constructive manner, document team responses and try and come up with fixes or recommendations, get the team to agree on an action plan, act as a facilitator for the session, but don’t take over or railroad outcomes, document the outcomes in your action plan – and make it happen.
Try and implement the above suggestions and you will experience how effective communication helps in dealing with issues that bother you. Prepare for conversations well, explain the issue as clear and objective as you can, listen with the intention to understand and finish with clear follow up steps.
Ton Haverkort
Source and further reading: BusinessVictoria
The launch of Ethiopia’s first interbank market trading platform on ESX marks a historic milestone
The launch of Ethiopia’s first interbank market trading platform on the Ethiopian Securities Exchange (ESX) marks a historic achievement as it becomes one of the few African exchanges to introduce interbank trading, setting a new standard for short term money markets on the continent. With dual regulatory oversight from the National Bank of Ethiopia (NBE) and the Ethiopian Capital Market Authority (ECMA), the ESX is proud to host a modern and flexible trading platform that promotes efficient price discovery, better transparency, and enhances liquidity in the Ethiopian banking sector. This enables a more stable, resilient, and adaptable financial sector, one that’s better equipped to support the nation’s long-term growth ambitions.
By Michael Habte
The interbank market forms the key part of a suite of short-term financing instruments in the money market asset class. Money market instruments are generally defined as highly liquid, low risk ‘cash equivalent’ financial instruments that mature in less than one year. In addition to the interbank segment, the money market includes time deposits, Treasury Bills, repurchase agreements (collateralized interbank loan), and commercial papers which are unsecured short-term debt instruments issued by companies to finance short-term working capital.
For years, Ethiopia’s financial sector has operated with limited mechanisms for interbank transactions. One of the primary reasons for this has been the lack of the necessary technological infrastructure which has held back the formation of an effective interbank money market. This lack of infrastructure coupled with the requisite regulatory framework has restrained the capacity of banks to respond effectively to liquidity needs, making lending and investment cumbersome and riskier than necessary.
The new interbank market trading platform changes this landscape, introducing a key financial market infrastructure and global standard regulatory framework that facilitates real-time transactions and more efficient allocation of capital in the wholesale financial sector.Banks can now trade cash amongst each other more seamlessly, ensuring liquidity is dynamically balanced across the system. Importantly, the NBE paved the path for the successful launch of the trading platform by finalizing and publishing the Interbank Money Market Directive (MFAD/IBM/03/2024) which formally regulates the interbank market prior to the commencement of trading in October 2024.
The interbank market is an essential prerequisite for the robust development of modern debt capital markets and serves as the foundation for constructing a proper market-based yield curve and building liquidity in the government debt market. An efficient interbank market helps to support government bond markets by optimizing financial institutions’ liquidity positions and helping price short term debt instruments such as Treasury Bills more accurately in the secondary market. The short-term interbank T-Bill market are inherently linked to each other.
The presence of a liquid money market also reduces the risk and expense in terms of storing government securities to maturity as banks can use these securities as collateral in the interbank market – in the form of repurchases agreements (repos)- unlocking valuable implied optionality in Treasury instruments that until now has not been realized in Ethiopia due to the absence of a functional capital market and necessary trading and settlement systems. The ESX trading platform will allow trading in both the interbank and debt – both government and private securities – markets and be integrated with the Central Securities Depository (CSD) hosted at the NBE that handles trade settlement, providing an integrated and seamless trade execution process on par with modern exchanges around the globe.
The significance extends beyond operational efficiency for banks alone however. A regulated trading platform will improve price discovery in the cash market, enhance market discipline, and reduce the cost of interbank borrowing. These advancements mean that Ethiopian businesses — from SMEs to large corporates — can access credit more predictably and affordably and provide added flexibility to banks to meet customer credit demands more proactively. The ripple effects can spark increased investment, job creation, and innovation in the real economy, accelerating Ethiopia’s march toward becoming a middle-income economy.
It is also important to underscore how this milestone aligns with the nations broader efforts to integrate into international trade and finance following the recently announced reforms in the financial sector. By enhancing liquidity management and promoting a structured, regulated interbank market, a platform that adheres to modern money market norms provides a means to increase investor confidence in the banking system, both local and international.
As we take note of this achievement, we must remain cognizant of the new nature of this business and provide adequate capacity building and resources to market participants in the interbank market. This platform’s success hinges on trust, transparency, and resilience, which must be nurtured through continuous learning and adaptation. With thoughtful stewardship, the ESX Interbank Trading Platform can and should serve as a model for innovation and growth in Ethiopia and across the continent.
Michael Habte is Chief Operating Officer of the ESX
