Are You Building Your Business Like a Political Party?

Are You Building Your Business Like a Political Party?

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Reflecting back on the 2014 national election got me thinking about the similarities between building a business and building a political party in South Africa.

The performance of the parties, most of which were lastminute.com in all their communications, their manifestos, their behaviour, demonstrated many similarities to the world of entrepreneurship and business development that I see every day.

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The Business Lifecycle

I’ve spoken often about the business development lifecycle. All entrepreneurs traverse this lifecycle as they endeavour to grow their businesses. All businesses start, enter into the early stage of development, hopefully move into growth, then the prime of their lifecycle, followed by maturity and eventually decline.

In each of these stages the activities, focus and tactics, to get to the next stage, need to be considered. What worked in the past is not a guarantee of what will work in the future.

Besides the fact that each stage of the business development lifecycle poses different challenges for you as the business owner, the technical requirements to get to that next level differ from those that worked so well before.

By the way, this is what ‘next level’ truly means. We hear the words being bandied about in adverts, conferences, and the media and so on, but have you ever considered what they really mean?

 

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In reflecting back on this election, the behaviour of the political parties represented by the ANC as an established business with a big brand, the DA as a medium-sized business, and the EFF and AGANG as the start-ups, makes for an interesting reflection on how you might be building your own business.

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The Idea Graveyard

The two most vital requirements of a successful start-up are an idea whose time has come, and a driven, capable start-up team. As a start-up entrepreneur, your idea is never enough. Many entrepreneurs I meet have ideas that can change the world and perhaps will one day.

Yet, most of these ideas find the ‘If only’ graveyard where they R.I.P.  An idea needs to be directed at someone, and finding that someone in the start-up phase of development is the single hardest action that you need to overcome.

If you try be all things to all people by promoting the features of your product or service to all and sundry, the likelihood of success is low.

You might find some traction but languishing in the start-up phase of your business’s development is the most likely outcome. This happens often to most ideas that are intellectually driven, that have big business plans behind them and that were born by bright, smart entrepreneurs who can intellectualise blood from a stone!

It’s also very typical of first-time entrepreneurs.

Speaking to the masses

If you start your business based on insights you get from the ground – the coal face of being in a group of people who are similar and have similar needs and wants – the idea of the start-up is often not yours.

It is often born from the fragments of insight, the bits and pieces of conversations within this group of customers that you can aggregate into an idea and who, with every iteration, becomes more cogent, relevant and real. The probability of your idea being a business idea is increased if you have spoken to many, similar people and not just your family or friends.

The probability of launching a new business with a fresh, new idea is also better suited to a customer grouping that is either young or ready for change and not contaminated by their views on the past.

It was Carl Jung who offered this famous insight: “We are trapped by the images of our past.” Launching new ideas and businesses to an older customer segment can be done but needs big marketing money behind it!

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Failure is the road to success

Previously failed entrepreneurs who see failure as a teacher and not an undertaker are bound to succeed eventually. If failure is simply a path to success, that it was the wrong path and illuminates another path that may work, is a mind-set that serves success.

In addition, entrepreneurs who try to start businesses on the back of deal-making alone without having built an asset stack – an expression I use to measure your value coming into a deal – often don’t make it to the next round. Your start-up team needs the right attitude, heart and credentials. Excellent, symbolic brand imagery also helps.

Given the economic concentration that South Africa has unfortunately inherited from its past, medium-sized businesses entering into their growth phase need tremendous patience in a slow economy.

It takes time for big established businesses to stumble, fall and create the space for these medium-sized businesses to grow into. But here’s the thing: You cannot afford to be a medium-sized growth business for too long since you too will eventually get trapped by the images of your past and the path to growing to the next level becomes harder to see with time. Leadership becomes fatigued, shortcuts get taken and strategy can be supplanted by expediency that compromises or confuses your brand values.

As a business owner in the growth phase and wanting to get to the next level – the prime phase of your businesses development – decide on what war you are fighting in your market.

Be the Tortoise, Not the Hare

Don’t be tempted to fight all the battles against your competitors who are often bigger than you. Entering the next stage of your business lifecycle needs patience, consistency and commitment to your stated goals and strategic imperatives.

If your value proposition is service delivery, the real war is local government elections and not the national election!

Right now at Aurik we are working with a number of businesses that are in their second generation, selling the products of a big, famous and well established brand and generating over R500 million annually. Their biggest asset, a famous, powerful brand has proven to be one of their biggest weaknesses.

A big brand is not enough to sustain a market leadership position. Simply relying on your established brand equity does not help you grow your business to the next level. There is another problem in this environment that time delivers – the treacle of bureaucracy that governs everyday life and activity.

These features are the exacting features that accelerate your progression to the next level of the business development lifecycle – decline!

In the medical insurance industry, would Discovery ever have existed if the big brands of the time had not suffered from these features? Would the inroads made by the small and medium-sized political parties have been made if the ANC were not hamstrung by similar challenges?

Business Decline? Re-invest!

As a business owner, if you are in this phase of your lifecycle, reinvent fast and if you can’t do it, get some help in fast. Your being unable to do it has little to do with not being bright enough, smart enough, clever enough, and whatever else goes on in the silent recesses of your mind. Rather this happens because of the loneliness we all experience as business owners.

It is further compounded by depleted energy and a team that is too comfortable within your ranks, one in which group-think governs the views and decisions taken in the business. The biggest failure of group thinking is that you often believe your own propaganda, a fatal flaw in any business!

So, as we look to our next national election five years from now, I look forward to the business models, leadership teams and promotional tactics that will govern the local government elections two years from now.

How the start-ups grow and how the mature parties respond to them, in my view, will make the most significant elections in our young country very exciting. Never let it be said that lessons and insights into political party strategy cannot be applied valuably to our own businesses.

Who would have thought?

There’s more to be learnt from political parties than you might realise, especially when it comes to winning or losing loyalty.

The South African political landscape is representative of business lifecycles with energetic start-ups, fatigued medium-sized businesses and mature organisations bogged down in bureaucracy.

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Pavlo Phitidis
Pavlo Phitidis is the CEO of Aurik Business Incubator, an organisation that works with entrepreneurs to build their businesses into valuable assets. Pavlo is a regular commentator on entrepreneurship on 702 Talk Radio and 567 Cape Talk Radio. He can be contacted at www.aurik.co.za