The recent financial crisis caused more than just an economic downturn. Major shifts are taking place in almost every industry around the world as new rules for success and failure are written. History tells us that the major winners and losers of a recession actually emerge only in the aftermath of the downturn – as the upswing begins. We therefore need to prepare ourselves for a decade of turbulence as we live with the after-shocks of the “Great Recession”.
The most successful companies will be those that find ways to be strategically responsive. To do this, it is important that everyone – at every level in the organisation – has an understanding of the forces that shape the next decade. Only then can they contribute meaningfully to your company’s success. You can develop these insights through regular analysis of your environment and strategic conversations with all of the people throughout your organisation. Their understanding will help them buy into your vision and strategies. And it is also essential for problem solving, creativity, innovation and the proactive identification of opportunities and threats in your industry and marketplace. Here’s a helpful framework: consider, on an ongoing basis, five key disruptive forces that will reshape the world in the next decade. These are the tides of change. Use this framework on a regular basis in your team meetings and informal conversations to make sure that everyone is ready for the next few years of turbulent change. Let me explain. There are five tides of change, each one outlined below.
Continued increases in computing power and the rapid development of digital tools to enhance and simplify our lives will dominate the next decade. The workplace has never been so far behind the technology curve as it is now. When I first started work (at KPMG in the early 1990s), the office had the best technology (the latest computers, mainframes, fax machines, colour photocopiers and more). I arrived early and left the office late in order to spend more time on the Apple SE/30s KPMG Johannesburg had just purchased (they’d make good doorstops now). But today, instead of trying to take things out of the office, young people are desperate to smuggle technology into the workplace. They’re frustrated at the out-of-date hardware, old software and restrictive IT policies that characterise many office environments. Companies need to catch up quickly and take advantage of the most important technology trends for business in the next decade: social media, augmented reality and mobility.
This is being driven not by teenagers who want to tell the world what they had for breakfast, but by our human desire to connect and interact. At last, computers have stopped creating space between us and are providing ways to connect us. This will change how you communicate – if your website is just a brochure and does not encourage interaction, feedback and conversation, you’ll be left behind. But it has even more potential to change your entire business structure, with collaboration at every level. For a detailed look at what social media might do to our industries, see http://tr.im/socialmedia2.
This is our ability to see the data associated with the physical objects around us. We’ll quickly get used to doing this, and your organisation could be left behind if you don’t make all the data anyone might like to see available to them in visually stunning ways.
And all of this will need to be done in such a way that it can be accessed and interacted with via mobile devices. Cloud computing will drive our ability to access any (and all) information anywhere, on any device or platform, all the time. In this world, geography counts for nothing and competition is everywhere. How mobile can your staff and customers be? How mobile is your offering? The next steps in the technology revolution are all about how we use technology to connect us and help us interact. Don’t be left behind.
2. Institutional Change
Almost every sector is in the midst of a period of disruptive change where the old rules for success don’t seem to hold true. This is because many industries are currently experiencing deep structural changes, including changes to the nature of relationships, the means of producing profit, how companies are structured internally, their risk profiles, where and how capital can be accessed, the basis for success – and failure, and the structure of the industry itself. Kenichi Ohmae foresaw this in his 2005 book The Next Global Stage: “Over the last two decades, the world has changed substantially. The economic, political, social, corporate, and personal rules that now apply bear scant relation to those applicable two decades ago. Different times require a different script.”
The key to understanding this disruptive trend is that we are finally being forced to deal with the implications of the shift from the industrial to the information age. We should not be surprised that it has taken nearly half a century for the implications of this transition to be fully felt. It took longer than that for the first motor vehicles and steam trains of the industrial revolution to mutate into the consumer economy epitomised by Henry Ford’s assembly line. By “institutional change” I mean that the very rules of an industry are changing. Most industries have these “rules” – the unwritten laws for success. It is inherited wisdom that everyone in the industry accepts as gospel. It’s hardly ever questioned. As we emerge from this recession I suggest two things:
- That the rules have changed – not all of them, but enough of them to make your industry feel like an unfamiliar place
- That competitors will question the rules and make changes that would have been unheard of just a few years ago. It would be better for you to be ahead of this curve, than behind it.
Each industry will be affected differently, but there is no doubt that institutional change requires new thinking from you and your team. Our default reaction to such seismic change is to protect ourselves. This will happen in your industry too. But now would be a good time to go against the flow, and question the assumptions that threaten to constrain you and your competitors.
The third of the five tides of change is demographics. There are many trends we could consider as we look at the study of changing populations, but the most important ones that will impact business in the next three to five years are: an ageing population (and changes in retirement), rising life expectancy, plummeting fertility rates, the potential for generational conflict, migration and diversity.
We took nearly a century to reach one billion consumers (roughly defined as the middle class people around the world who have disposable income and can purchase appliances). It will take us less than a decade to grow that number by another billion (or more). And almost all of these new consumers will come from the developing world – they will have different mindsets, languages, cultures and worldviews. At the same time, the developed world will get older, and migration from rural areas to cities, and from poor, overcrowded countries to rich, ageing countries, will increase. This points to a very different looking world in ten years’ time. A key part of management’s role in the years ahead will be to manage conflict between competing worldviews and demographics, and to find ways to release the wealth locked up in true “mindset” diversity – in both staff and customer pools.
4. Environmental Issues
You can’t walk past a newsstand these days without a host of magazine covers shouting something “green” at you. More often than not, it seems the articles are trying to fuel debates about whether climate change is happening or not. But, regardless of what you or I think about these issues, the governments of the world have made up their minds and are instituting policies and programmes to deal with carbon emissions and energy usage.
Energy will cost more, and therefore so will transport. Input costs will rise. Money will be made – and lost – in carbon trading schemes. But it’s more than just global warming we need to be worried about. As James Martin points out in his excellent book, The Meaning of the 21st Century, there are at least 16 major issues facing the world in the next few decades – each one of which could ruin the planet and change life on earth forever. These include pollution, extreme poverty, pandemics, runaway computer intelligence, dwindling water and food supplies, increasing violence and weapons of mass destruction, and more. Not only must you consider the possible threats of these issues to your business in the next decade, but you should also anticipate where potential opportunities will emerge for you. With activists and ethical consumers becoming ever more vocal, this issue has game changing potential in the next decade.
5. Shifting Social Values
If the previous four trends are changing the world as I have suggested, then it should not be surprising that people’s values, their dreams and aspirations, their expectations of what a good life looks like, their desires for their lives, work, families and careers are all changing, too. Many companies are hoping that we will soon get “back to normal”, but it isn’t going to happen.
The downturn has been more than economic – it has served to catalyse many social, political and values changes that had already been underway, and will now change the world forever.You need to consider how your staff, customers and business partners have changed their own expectations – not just in relation to you and your offerings, but to their entire lives and how what you do for them fits into these. This trend has the most potential to surprise you. Therefore, it is also the key to gaining access to the hearts and souls of your stakeholders – and that’s where the new sustainable competitive advantage in your industry is to be found.
Facing the Future
It’s not just the short-term challenges caused by the recent economic difficulties that have made business more complicated. Over a period of time, competition, the speed of change, globalisation and the technology that we’ve implemented have simply led to greater complexity. One of the ways that businesses have responded is to reduce layers of management and bureaucracy, passing responsibility and authority further down the line into our organisations. We thus expect people at all levels to act with the type of understanding, critical thinking, initiative, agility and responsibility that just a decade or so ago were largely reserved for people in the executive suite.
To be successful in the coming decade of turbulence and opportunity will require the involvement and commitment of everyone throughout your organisation. Nothing can guarantee your success. But by using the tides of change framework to guide your formal meetings and informal conversations, and to help focus your team on the forces that will disrupt your industry and change your market considerably, you can be off to a great start. The point is to make the most of turbulent times.
Why Smart Business Growth Means Smart IT Budgeting
(…And how to do it)
For any business today, no matter its size or sector, getting the IT budget right has become a critical part of success and sustainability. The difference between a three-device network and a fifty-device network has significant ramifications for your IT spend and your overall budget outlook.
Let’s take a closer look at several potential costs and how to plan for them…
Network: The driving force
Essentially, the network is the backbone/core of your IT infrastructure. It needs to be reliable, fast and efficient. Often, a young and growing business will have a piecemeal network in place, bolting on new sections over time. This can lead to the network becoming inefficient and slow.
The important thing to note is that when you have reached capacity on your current network, is it’s sometimes better to start from scratch and also leave room for expansion down the line (rather than adding to the existing network as a quick fix).
While it may appear more costly (and scary), the end result is a reliable network that you won’t have to worry about revamping for many years.
Licensing: Pricey but critical
Software licensing often comes as an unexpected (and unpleasant) cost to many business owners and their financial teams. Indeed, purchasing legal software can be pricey if you aren’t prepared for it (and don’t understand how it all works!). However, if you buy software licenses in bulk, or commit to a longer term, they can cost far less…so again, budgeting intelligently for your business growth can save you money in the long term. Also remember that many software licenses nowadays can be rented on a per user per month basis so its flexible and always up-to-date.
Maintenance: Be realistic
As the business grows and expands, so too will your IT maintenance needs. The key factor to note is to carefully consider the potential costs of IT failures and hardware issues. You need to take into account that you will undoubtedly have to spend money on maintaining your computers and overall network – and breakdowns can be extremely costly in downtime and lost productivity.
Some businesses find that it makes good financial sense to employ someone to be an IT technician in addition to taking on other responsibilities – but this person may not have the right expertise and experience to manage everything. The other increasingly popular option is to outsource your IT management. With flexible pricing options now available to businesses, this is becoming a viable and often much more flexible route to take.
Think Beyond The Box
With a holistic view of your business finances and admin in place, Sasfin’s new digital banking platform is engineered to help you grow your business.
Welcome to the banking platform designed to support your banking needs. In response to more than 50 years of financing and supporting SMEs, Sasfin has launched a digital banking platform, B\\YOND, to help address the pain points and pressures that business owners face in South Africa.
“We’ve spent decades understanding what makes SMEs succeed or fail, and a lot of it begins with how well a business owner understands their finances,” says Sasfin CEO, Michael Sassoon.
“Failed SMEs often tend to either neglect or become completely consumed by their finances and admin. We wanted to create a platform that could help them take control of these factors, and give them a full 360-degree view of their businesses.”
B\\YOND was built to enable businesses to attend to their finances and admin seamlessly, thereby ensuring that entrepreneurs can focus on their clients — driving revenue and enhancing their products and services in the process.
Everything you need on one platform
According to Sassoon, entrepreneurs on the B\\YOND platform will never need to set foot in a branch again. The sophisticated technology incorporates many value-added services at no additional cost, including:
- B\\YOND online applications: Businesses with multiple shareholders and directors can apply online, by uploading documents and signing the application digitally.
- B\\YOND payroll: A simple-to-use and SARS-compliant payroll function enables business owners to perform their own payroll management.
- B\\YOND invoicing: Businesses can create and send personalised quotes and invoices directly from the platform.
- B\\YOND insights: Smart dashboards generated through clever account and transaction classification and tagging helps manage revenue and expenses, and keep track of projects.
- B\\YOND integrations: Direct-feed integration into Xero ensures that small businesses and their accountants can safely and seamlessly connect their Sasfin Bank transactional data with Xero, the fastest growing cloud-based accounting software provider in the world.
Serving the entrepreneur
While there is much in store for the next versions of B\\YOND, the platform currently offers business leaders the basic tools they need to run their businesses smoothly in one place at no additional cost, with the ability to bank at their convenience.
“Sasfin has always existed to serve the entrepreneur and investor, the two key drivers of the South African economy and it bothers us that there is such a high failure rate of entrepreneurs in our country. We have spent the last three years building B\\YOND — a future-fit digital banking platform to help these entrepreneurs,” says Sassoon.
Engineered for success
Sasfin has gone above and B\\YOND to bring you a new digital banking platform that gives you the tools to make managing your business simple and profitable.
B//YOND is a value-add to all Sasfin Transctional Banking clients
Bank outside the box
The Sasfin Transactional Banking Business Account is designed for SMEs who want to focus on what they’re most passionate about — their business — while their banking platform not only sweats the small stuff for them, but helps manage and grow their business.
- Do you spend unnecessary time on banking?
- Does your bank pay you market-leading annual interest rates?
- Does your bank give you easy cash management in real-time?
- Would you like to manage your payroll and invoicing from your bank account?
- Does your bank help you keep track of your cash flow, manage your admin, and provide you with the set of tools you need to help run your business successfully?
Sign up today and have access to a whole new world of banking better for your business.
Call 0861 SASFIN for more information.
A Short Cut For Corporates To Digital Innovation: Start-ups
Charlie Stewart, co-founder and CEO of Rogerwilco shares his advice for turning to start-ups for solutions.
If there is one anathema in corporate culture, it is failure. With profit to be made and share prices to increase, failure is simply not an option. And yet, when listening to stories about success in the digital space, failure is there to put one on the right path to success. The phrase ‘Fail fast, Fail often’ is often bandied about, and innovation can be seen as a constant process of iteration, test and failure, repeating this until a well refined service or product is on the table.
Many corporates are waking up to the uncomfortable fact that at a structural level, the type of innovation required to grow in today’s digital landscape, is out of their reach, at least when trying to come up with it internally. So what to do? Charlie Stewart, co-founder and CEO of Rogerwilco shares his advice for turning to start-ups for solutions.
1. The start-up solution
Corporates comfortable in the digital space – Apple, Alphabet, Facebook and Amazon – have been buying startups for years, and now companies are realising that when it comes to Blockchain, artificial intelligence and machine learning, they need to turn elsewhere. And they are. Matt Garratt, Vice President of Salesforce Ventures noted that of the roughly 1500 tech acquisitions Stateside in 2016, half of them were bought by non-tech companies, showing that buying a start-up is a quick way to acquire new technologies, skills or patents.
But purchasing a company with a fully developed product can be an expensive and often risky play. Instead we are beginning to see a trend where corporates are framing agile startups as solution providers, offering them seed funding to come up with answers to digital headaches.
In the US, defence contractor Lockheed Martin has turned its investment strategy around, focusing on young startups instead of more mature companies. In the region of $20 million was ploughed into startups in 2017, helping Lockheed Martin to get a slice of the pie in fast moving spaces such as cybersecurity, autonomous vehicles and nanotechnology.
2. Outsourcing the problem
For corporates turning to start-ups, there are two benefits. Firstly, by doing so companies are casting their net a bit wider, with not only more eyeballs on the problems but, importantly, without the restraints of the corporate boardroom. There is more out-of-the-box thinking involved, no internal politics to worry about and far less of a threat of somebody’s career being jeopardised.
Secondly, if a start-up comes up with a solution, investing in the fledgling company can be cheaper than purchasing one with an established solution. If a buy-out is on the cards, it is less risky too since the due diligence process has been worked through and cultural challenges have been ironed out.
But not all start-ups actually want a buy-out. Some rather prefer access to market and skills transfer, especially around the commercial side of business. Yes, they do need investment, so companies can provide them with a proof of concept to take their idea forward, or potentially a more structured form of investment in their business.
3. Cape Town: the start-up hub of Africa
Locally, Cape Town can be seen as the tech start-up hub of Africa, and is certainly a good place for corporates to start sniffing around for that digital innovation golden ticket. Events such as last year’s AfricArena conference proved that Cape Town can be a fruitful hunting ground. 80 start-ups from across Africa attended the inaugural event, and were tasked to find solutions to problems provided by corporates beforehand. Air France, for example, was looking for innovative mobile solutions, the City of Cape Town wanted to see how technology can be used to improve the tourism industry, while RCS asked for a loyalty programme to match a new credit programme.
By all accounts the event was a major success, connecting start-ups with corporates and investors, both attending the event and dialing in. The winner of Air France’s challenge, mobile payment solution provider WeCashUp, received multiple offers of investment and the project has moved on to the proof-of-concept phase.
4. The start-up lifeboat
Many companies need to face up to the fact that the current corporate structure they are working within does not allow for the type of innovation required to adapt to, never mind thrive, in a digital world. South African companies were perhaps sheltered from the digital tsunami that has eviscerated the analogue business world, but the wave has hit our shores. If it is innovation that is needed, it is time to turn to agile startups, far better adapted to a sink-or-swim digital environment, to come up with the solutions.
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