Ask Clem Sunter about what business should be doing to stay relevant and competitive, and he has a wealth of experiences to draw from, from his days as an executive of Anglo American Chairman’s Fund, to his current roles as entrepreneur and scenario planner.
Here are his three top tips for staying ahead of the game (and the competition).
1. Use small business to grow your big business
When Anglo American launched Zimele in the 1990s, it was originally a CSI project. Today, it’s a strategic component of the group’s business model. Why? Because by setting up a venture capital arm that aimed to promote small business and do its bit for the economy, Anglo learnt two very important lessons: One, don’t do what’s not your core.
There will be a supplier who does it better than you, at a lower cost. And two, SMEs are flexible in a way that big business is not – and there are ways to use this to your advantage, even if you yourself have lost that small business agility you once had.
“We designed Zimele to assist SMEs in gearing up for our contracts,” Sunter explains.
“We invested money into these businesses, simplified our tendering procedures, gave them mentors and installed Anglo managers on their boards. The project has grown to such a degree that today there are 1 200 businesses employing 25 000 who operate under the Zimele banner.”
Despite the fact that this started out as a CSI initiative, Anglo soon learnt some interesting things.
“In many cases, these SMEs now supply the food at the mines we operate. We are not in the catering business, and so these small, agile, expert businesses do a better job, at a lower cost. It made us realise that in order to remain competitive in today’s market, you should focus on your core – what it is you actually do – and outsource the rest to experts in that category.
“It also means you can lower your labour force. It’s commercially sensible, and even though it’s still classified CSI, the reality is that it’s an important part of Anglo’s strategy.”
2. Cultivate the mind of a fox
In 1982 Anglo created a scenario planning division headed up by Sunter. The idea was to create and evaluate the various scenarios the future of South Africa might hold, and adjust Anglo’s business plan accordingly. At the time, there was a high road, and a low road.
The low road did not include a democratic government in South Africa, and ultimately led to high levels of unrest and a failing economy in which Anglo realised it would no longer be able to operate.
The high road led to an inclusive, democratic government which the company knew was essential to future growth and sustainability.
While most businesses cannot impact the political environment, scenario planning remains an essential factor in real business growth.
“You need to become what we call a foxy leader,” affirms Sunter. “Foxes are always paying attention to their surroundings, they’re looking ahead, but also at what’s taking place around them. While it’s impossible to forecast exactly what the future holds, by paying attention to what’s happening outside of your business, you can determine a few likely scenarios, and begin preparing accordingly – and then have the speed and agility to react to what you see.”
For example, Sunter currently has two scenarios. One predicts that the global economy will remain flat. Two of the largest economic blocs (Japan and the EU) have ageing populations, and this does not correspond well with high economic growth. In this scenario, business owners need to evaluate what they can do to grow their businesses in a flat world.
“The emphasis must be on innovation and new products to create new markets. You need to live your brand in such a way that differentiates you from the crowd, because the economy isn’t growing, which means you need a larger slice of what’s already available.”
The second scenario is coined the ultra violet scenario. In this scenario, while the economies with ageing demographics go through the long U, younger, more vibrant economies are chasing the short V – they’ve hit the bottom and are aggressively pursuing economic growth.
“This will take place in the emerging economies: India, Africa and South America,” says Sunter.“In this scenario, businesses must target these economies: Create products that work for them, create strategic alliances with businesses on the ground to grow your brand. Find ways to tap into these growing markets.”
Sunter offers flags to help business owners determine which scenario is more likely to develop. “One of these is China. If China experiences 8% to 10% growth, this will galvanise growth in the emerging economies, and we’ll be in the second scenario. But if China’s growth falls to 5% or less, then we’re in the flat economy scenario and it’s hard times for everyone.”
The takeaway lesson? Your business does not operate in a bubble – pay attention to what’s happening around you, on both a micro and macro scale.
3. Encourage an entrepreneurial economy
As your business grows bigger and more corporate, don’t forget about the value of smaller businesses to the economy.
The most vibrant economies enjoying the highest percentage of growth in Africa have strong entrepreneurial spirits. South Africa, while Africa’s largest economy, is by no stretch its most vivacious.
“I work with an entrepreneur who travels extensively. He quips that in other countries they roll out the red carpet, and in South Africa, they roll out the red tape.”
While he’s a firm proponent that government’s mantra shouldn’t be five million jobs by 2020, but one million businesses (and the rest will take care of itself), Sunter believes that much can be done if the corporate and big business mindset changes.
“A vibrant economy is good for everyone. If you want your business to grow, no matter its current size, you need to support small business. The economics of this work, we’ve already proven that, but it also starts with a mindset. Start with the question: How can I involve smaller businesses in what I do? And take it from there.”
We Need To Unite For A Better Entrepreneurial Future!
Here are my key entrepreneurial tips from The Passport Showcase.
In our modern world, where nationalists walk the street and xenophobic beliefs are on the rise, as a Zimbabwean serial entrepreneur and motivational speaker, I’ve identified that we need to bridge this division and unite us all through celebrating our diversity.
We need to come together not because it’s the right thing to do, but because united, we can work towards a profitable future. However, before this can happen, we need to change the global mindset. That’s why I transformed my book The Passport into a showcase in which performers from across the continent took part and showed off their talents.
While preparing for the show I noted some important lessons that I learnt along the way. Here are my key entrepreneurial tips from The Passport Showcase.
Success can’t happen in a vacuum!
Setting up The Passport Showcase took a lot of collaboration. As an entrepreneur and a believer in a united Africa, I’ve learned you can’t operate a successful business if you’re not willing to work and deliver services to everyone. It’s for this reason I invited fashion designers, artists, and dancers, to come together and educate us about the dangers of xenophobic beliefs through their art forms.
We need to be able to blend skills and overcome our preconceived notions, in business and the arts, so that we can achieve great things.
Education is the key to every problem
It’s a part of starting any business; educating the public about your company and quickly converting them into consumers. Arguably the same was true of the showcase, creating a truly unique experience to inform the public about celebrating diversity.
Helping individuals understand that acceptance is key for a better future is critical for business expansion. If any of us want to expand our businesses, we need to be able to engage with different markets – who won’t chase away the unknown.
Identifying a new opportunity is one of the fundamental building blocks for a new business. Finding unique solutions is a truth that echoes across corporate industries and the arts. But change can cause concern and adverse reactions.
On our continent, ideas that disrupt the norm are needed to catapult our brothers and sisters to a brighter future. But this can only be achieved when we celebrate our diversities and collaborate.
9 Ways To Elevate Your Small Business To The Next Level
The South African economy is strongly supported by the nation’s entrepreneurial spirit, which encourages a culture of growth and development in communities.
With the unemployment rate currently at 27.71%, people of all ages and backgrounds are looking for an opportunity to work.
Although many entrepreneurs have enjoyed great success on their small business journeys, choosing to start your own business comes with many risks. One of these risks is the financial burden it can bring. While there are various challenges faced by small businesses, it is possible to overcome these and jumpstart your business with these useful tips from FedEx Express, the world’s largest express transportation company.
1. Connect with customers
As a small business owner, it is important to know who your customers are, where they spend their time, what they are looking for and how your business can meet their needs. Times have changed and waiting for customers to come to you is no longer a feasible business strategy. In today’s evolving business environment, entrepreneurs need to be approaching their customers and building strong relationships with them to form a lasting impression. If your small business cannot grow its customer base, it cannot grow profits.
Attending networking events will allow you to find professionals and other small business owners who offer services your business may require. Many small business owners get this critical aspect of starting a new business wrong by networking purely to gain customers, not realising that networking with other business can assist you in acquiring the services you need to continue the growth of your business. Small businesses have a lot to gain through networking at the right time and at relevant events.
3. Use social media
There are a number of social media networks and social networking platforms that can drastically grow your business, however, it is important to understand your customers and identify the channels they prefer to communicate on. By implementing a comprehensive social media strategy, you can ensure social media works as a driver of new business that positively promotes your service offerings.
4. Build customer loyalty
Building customer loyalty begins with great customer service. Great customer service starts with a positive customer experience and first impressions are vital in this regard. If a customer has an enjoyable experience when using your services, it is likely they will return and use your services on an ongoing basis. By ensuring your business has a user friendly website and informative brand collateral, new business prospects will increase and those who have experienced quality customer service from your business are likely to refer you to friends and colleagues.
5. Ask for help
All small businesses face challenges, particularly in the early operational stage. This is why asking for help from your peers/mentor who may be more experienced than you is critical. Tapping into the mind of someone with more experience and a broader knowledge base will ensure you learn and acquire the skills needed to make a success of your business. The FedEx Small Business portal offers business owners useful advice that will assist you on your small business journey. Visit www.smallbusiness.fedex.com for tips and success stories that will inspire and help you to grow your small business.
6. Hire the right people
Each person that forms part of your business needs to share the same vision with you that will drive growth. Your workforce will be responsible for the success of your business therefore, ensuring your staff remains motivated is important. When hiring a new employee, implement a check list that includes traits that you feel are imperative to the culture of your business.
Asking out-of-the-box questions in the interview will also assist you in determining if the potential employee is a suitable candidate to fill the open position.
7. Manage cash flow well
Many small businesses close due to cash flow problems. Managing money spent versus money earned is critical as it provides you with a clear indication of whether your business is running at a loss or whether you are excelling. If your small business is losing money, you can implement a strategy to iron out the issues that are contributing to this and identify ways that will ensure your business generates profits.
8. Work to build success
Work to make a success out of your business with your employees by being involved in the everyday activities that are critical to your businesses success. Being involved will ensure employee morale remains high while allowing you to identify areas that need improvement.
9. Find inspiration
There will always be someone who has been in your current position, even if it is a different business to yours. Learning how they made a success of their business during hard times will provide you with the knowledge you need to succeed as a business owner. Starting your own business is a learning experience made easier by speaking to others who inspire you.
A business can safeguard its success if it continues to innovate. For example, e-commerce has changed the way the world conducts business, and the rise in technology has made it easier to interact with customers quickly and across borders. With economies becoming more interconnected, companies large and small are now able to access markets that were previously unattainable. E-commerce will assist small businesses in establishing their territory in the market and as a result, guarantee growth and longevity,” concludes Higley.
How Algorithmic Forecasting Can Improve Business Efficiency In Challenging Economic Times
Harnessing the power of predictive analytics, in-memory computing, and artificial intelligence to forecast risks will help entrepreneurs stay ahead.
The ability for businesses to accurately predict risk and develop insights has traditionally involved manual drudgery, spreadsheets, and been confined mainly to the finance department.
With the advent of new technologies such as predictive analytics, in-memory computing, and artificial intelligence (AI), smart Chief Finance Officers (CFOs) are harnessing their power to automate the process, free up human capacity, and get deeper, more accurate insights.
The success of any business, from small start-up to large enterprise, depends on how accurately they can predict future performance, as well as recognise and respond to warning signals.
Deloitte recently launched a report titled Forecasting in a digital world, the sixth in its Crunch Time series for CFOs, which delves into the advantages of algorithmic forecasting and why it will change and challenge the way businesses look at and consume data.
There is a shift away from having people gather, compile and manipulate data, to handing over the menial work to the machines – which employ data-fuelled, predictive algorithms to sift through historical data and use statistical models to describe what is likely to happen in the future.
It is a process that relies on warehouses of historical company and market data, statistical algorithms chosen by experienced data scientists, and modern computing capabilities that make collecting, storing, and analysing data fast and affordable.
Algorithmic forecasting is a well-oiled machine, with more than 80 percent of the work happening automatically. Every piece of financial data a decision maker could want is available on their device and all they need to do is ask—literally.
How it change the workforce
While it seems like the machines are taking over, humans are not left entirely out of the process. The success of algorithmic forecasting depends on collaboration with the machines and among people from different teams, including finance, data analytics, and business.
The business finance talent model should evolve to keep up with changes in how work gets done and that will likely require a different mix of people than what organisations have in place today.
However, once they hit their stride, these teams can move across the range of forecasting needs, embedding capabilities in the business and driving integration. These teams are integral to establishing an algorithmic solution that can work for the business, bring insights to life within the organisation, and support continued business ownership of the outcomes.
How it changes the workplace
The new teams required for algorithmic forecasting to succeed and the pulling of human resources from other departments will need the workplace to evolve into a more collaborative space, banishing outdated silos.
Forecasting is not limited to finance but all functions, from marketing to supply chain to human resources – basically all functions that need to predict the future to drive important decisions.
While CFOs may not lead function-specific forecasting, they should help shape these forecasting initiatives since finance will inevitably use the outputs they generate.
A shared forecasting infrastructure — even a physical Centre of Excellence (CoE)—can help improve collaboration and coordination while providing efficiencies in data storage, tool configuration, and knowledge sharing.
The beauty of algorithmic forecasting is that once the work is done to solve one specific problem, the same process and capability can be extended and applied in other areas.
Algorithmic forecasting doesn’t create anything out of thin air and it doesn’t deliver 100% precision. However, it is an effective way for getting more value from planning, budgeting, and forecasting efforts.
A commitment to algorithmic forecasting is both cultural and statistical. Making it happen involves people working with technology – neither is enough on its own. Every company will make its own unique journey from its current approach to planning and forecasting to an improved approach.
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