The growing necessity for fast tracking our economic development in South Africa and the pivotal importance of entrepreneurship in achieving this has led to recent calls for an entrepreneurial revolution in this country.
This sense of proactive urgency is to be encouraged, yet such calls can be undermined when we lack a clear understanding of the tools for such a revolution. Part of this is symptomatic of a broader entrepreneurship challenge. We see its powerful benefits, but after 40 years of intensive research we have not made significant progress in unlocking the secrets of the entrepreneurship phenomenon.
This tension is captured in a recent comment where Raymond Ackerman concluded that the entrepreneur is the modern alchemist, making something out of nothing. This simple description captures both the power associated with entrepreneurial culture yet also reinforces the mystery surrounding its process. And it is this notion of mystery that continues to hinder the full potential that entrepreneurial thinking and action can bring to society.
The entrepreneurial domain
It is normally seen as the domain of those particularly gifted and brilliant, outside the reach of the ordinary man. The process itself is also not well understood, resulting in it being seen as a phenomenon rather than something that can be given more broad application. Yet if we reverse a few hundred years, this so called ‘great man’ explanation was exactly the situation where science found itself in the sixteenth century.
Before the intervention of Francis Bacon, scientific endeavour was the preserve of those special people, equipped with unique talents, who were able to divine the patterns of Nature. Scientific progress was accidental, circumstantial and largely dependent on the breakthroughs of a select few. In short it was a phenomenon.
Then Bacon initiated the process of codifying the actions of scientists, leading to the understanding of empirical evidence and experimentation that became the building blocks of the scientific method. In so doing he launched a scientific revolution with profound implications.
The simplest illustration of the benefits of the scientific method is that at the time of its introduction we travelled in horse carriages at a few kilometres per hour along the ground and now a mere two hundred years later we can travel at thousands of kilometres per hour into space.
The expansion of science has been so dramatic that according to Resnik, there are more scientists alive right now than have ever lived in the last two and a half thousand years of human history. Today, the scientific method is taught indiscriminately.
Not only is it taught to potential scientists at graduate and postgraduate levels, but everyone at every level, and especially starting at a young age, is taught it as an essential mindset and skill that is carried through, and forms part of the core of all education. The scientific method therefore gave us the tools for the scientific revolution allowing us to harness the potential of Nature.
Finding an entrepreneurial method
What if the key to unlocking an entrepreneurial revolution was to similarly see entrepreneurship not as a phenomenon but as a method? Entrepreneurship would then be released from the confines of a sub-category of economics and elevated to the level of a social force. In Entrepreneurship as Method: Open Questions for an Entrepreneurial Future, Professor Saras D. Sarasvathy and Sankaran Ventakaram postulate exactly this – that entrepreneurship should be seen as a method comparative to the scientific method.
The impact of codifying entrepreneurship in this way has the potential to be as significant in the field of human endeavour as the scientific method was in the field of Nature. Sarasvathy predicts that the entrepreneurial method will achieve no less than unleashing the potential of human nature. This paradigm is still at an early stage of exploration, but already the implications are significant.
First, everyone can benefit from the reasoning and problem solving skills that emerge as part of this method. (It would become necessary to introduce its logic as an essential part of basic education) Secondly, it creates a powerful tool that can be more intentionally used to take on large problems at the centre of progressing humanity.
But if experimentation was the tool of the scientific method, what is the tool of the entrepreneurship method?
Sarasvathy stumbled upon a possible answer after completing a study on 27 expert entrepreneurs. Despite the perception that we live in a commercial world dominated by prediction (a world where the aim is to use causal or rational thinking to achieve a previously identified goal), the findings of this study showed that the dominant logic of these individuals was effectual thinking – the exact opposite of causal thinking.
Effectual thinking is a mode of thinking where possible new ends are imagined using a given set of means. An illustration of the difference between causal and effectual thinkers is seen by the examples of conquerors such as Alexander the Great creating his empire out of the known world (causal) in comparison to explorers such as Columbus discovering the new world (effectual).
Building on the base of effectuation, the entrepreneurial method explores a method of human action that starts with what you have available, both in terms of your internal and external resources before then iteratively moving forward, taking into account evolving uncertainties and building partnerships to co-create a new future. The implications of these tools for South Africa are particularly exciting.
Part of South Africa’s entrepreneurship struggle is due to a simple lack of belief. In the 2011 Global Entrepreneurship Monitor Report, the percentage of the South African population who perceive that they have the capabilities to be entrepreneurial was just under 43%, which is nearly 10% below the average of our peer countries. If the entrepreneurial method inculcates an understanding that the process starts with our given means, however limited those means might be, it will act as a powerful catalyst to counter the current lack of belief in our abilities.
Second, a key finding in the initial studies around the entrepreneurial method is that entrepreneurial action is largely about interaction. This is in contrast to the historical focus on the role of the individual or the team, rather than the importance of the interactions between them and the numerous stakeholders involved in the entrepreneurial journey.
While this might seem a small shift, an orientation towards negotiation and relational exchanges with a more sociological bias as a basis for value creation, plays directly to the inherent and proven strengths of South Africa’s history – a heritage that a cursory glance at the categories of our Nobel Prize winners immediately demonstrates.
Intentional revolutionary thinking
This requirement for the tools of a revolution was illustrated again in an unexpected context recently when Waleed Rashed, co-founder of the April 6th Youth Movement that led to last year’s freedom revolution in Egypt, met with a small group of Allan Gray Fellows. Besides the inspiration of interacting with a 29 year old who already has ‘liberating his country’ on his CV, the abiding insight from his story is how intentional they were in understanding how the tools of social media, understanding the mindset of their target market and creating channels for those aspirations would ultimately ensure that the “revolution would no longer sit inside you, but be taken out and made realities.” Whether it be in science, freedom or entrepreneurship, revolutions require tools.
A picture of large scale adoption of the entrepreneurial method fast tracking our economic progress by leveraging the power of entrepreneurship as a social force is a compelling one. It is a picture of the entrepreneurial revolution – a revolution finally activated with the right tools. No longer need we deal with the mystery of alchemy, instead focusing on the certainty of science, applying an understood logic and thinking process to improve the state of the country.
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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