A few months back one of my students visited me. He had recently read the best-selling book, Blue Ocean Strategy. I had strongly recommended the book in one of my classes and, on my recommendation, he had purchased it and invested his time in meticulously working through the concepts. Yet on finishing the book he felt lost, despondent and overwhelmed.
He and his older brother had recently bought a struggling independent coffee store which they wanted to transform into a viable, thriving operation that would enable them to pursue their passion for music with a sustainable income. He complained that concepts in Blue Ocean Strategy seemed foreign and unrealistic and he wondered why I would recommend such a ‘pie in the sky’ book. Just a few days earlier I had met up with a friend from my MBA class. She was involved in launching a new social networking application that has the potential to transform the way we interact online. She explained to me how the same book had helped her create a practical and relevant blueprint for designing and implementing her new innovative product. She described in great detail how it was the “most valuable and insightful book” that she had ever read.
Why does one entrepreneur interpret Blue Ocean Strategy to be ‘pie in the sky’ while another interprets it to be the most valuable and insightful book that they have ever read? The answer lies in this simple statement: Not all entrepreneurs are the same. The term entrepreneur is used to describe any person launching and managing his or her own business, but in reality there are many different types of entrepreneurs. The ingredients for entrepreneurial success are very different depending on what kind of entrepreneur you are. It is hugely valuable for a person launching and managing a business to understand what kind of entrepreneur they are and to align their actions with the principles that govern that kind of entrepreneurship.
So what kind of entrepreneur are you and what does that mean for the way you manage your business? Some of the research that I have done would suggest that there are four broad categories of entrepreneurs: survivalists, lifestyle entrepreneurs, growth entrepreneurs and revolutionaries.
Survivalists are in business merely as a means of economic survival. They operate micro enterprises to feed themselves and their families. They create very little long-term wealth in their operation; they are merely keeping the business afloat while living on the profits from one day to the next. Examples of survivalist entrepreneurs can be found all across South Africa – they are the basket sellers on Durban beachfront, the people selling sunglasses on the corner of William Nicol Highway and Republic Road and the person selling Stormers flags outside Newlands Rugby ground.
Lifestyle entrepreneurs get into business as a means to a particular lifestyle. Being in business for themselves means that they can live in a certain place, have the freedom to pursue another passion (such as music, sailing, writing) and the autonomy to dictate when they do and don’t work. They tend to engage in higher value activities and use more infrastructure compared to survivalists. They therefore usually need to make a larger upfront investment in the business than survivalists but they get better returns. In most cases these people are forgoing the certainty of being an employee in an existing business for the freedom of autonomy and choice that goes with being an entrepreneur. The owner of a thriving guesthouse in Plett, the coffee shop owner who needs time for his music and the local nail parlour owner who wants afternoons off to spend with her kids are all examples of lifestyle entrepreneurs.
Growth entrepreneurs are driven by the competitive nature of business. They get into business for themselves to create something of long-term value and they continually seek to make the business bigger and more competitive. They usually need to make a larger investment in the business than lifestyle entrepreneurs, both in terms of upfront capital investment and the time they invest in managing the business as it grows. They often take on more risk than lifestyle entrepreneurs but that risk comes with financial rewards if the business succeeds. The consultant who keeps hiring more associates to service more clients, the media entrepreneur who is continuously launching new products to sell more advertising space and the estate agent who is franchising her operation to facilitate growth are all examples of growth entrepreneurs.
Revolutionaries create a business as a means to change the world. They are driven to disrupt and reshape markets. They look to make big bets and if these pay off they usually become famous. Globally, Steve Jobs, Richard Branson and Bill Gates have left indelible marks on the industries they entered. In South Africa, Raymond Ackerman reshaped the retail industry, Adrian Gore disrupted the healthcare sector and Gidon Novick turned domestic airline travel on its head. Such entrepreneurs often need to invest substantial amounts of capital in their businesses to facilitate growth; with that comes high expectation. They are notorious for working hard and for demanding much of those who work for them.
These four kinds of entrepreneurs can be represented in a simple diagram (see figure 1) which depicts the investment required and the revenue generated by the different categories of entrepreneurs. As can be seen in the diagram, survivalists invest very little in their business but they barely operate above the ‘breadline’. Lifestyle entrepreneurs make an investment in their business – usually their own money or money from family and friends. They use that money to create a business that initially grows but after a period of time it reaches a steady state and they are able to live on the income. Growth entrepreneurs typically need to make larger investments in their business and often rely on capital from external sources to facilitate growth. They push hard to grow the business and keep pushing for growth, even after it is making more money than they need for their chosen lifestyle.
Revolutionaries usually need to make very significant investments in their businesses to disrupt a market – Fred Smith of Fedex raised US$100 million in 1971 to create the infrastructure for his overnight delivery service. Adrian Gore ended up owning only 5% of the company he created because he needed to access significant amounts of external capital to get Discovery off the ground. Revolutionaries invest this capital in ventures that have significant potential. If the business takes off it will generate substantial growth and will probably keep growing for a number of years.
The questions every entrepreneur must answer:
My research indicates that there are two key factors that determine whether an entrepreneur is likely to achieve success with their chosen entrepreneurial trajectory.
- First, does their chosen trajectory – lifestyle, growth or revolutionary – align with their personal values and subconscious entrepreneurial desires?
- Second, do they have the skills to deliver within their chosen trajectory?
People subconsciously have a desire to be a certain kind of entrepreneur. This desire is driven by their underlying values – the things that they hold most dear.
Those who recognise how their personal values are driving their subconscious entrepreneurial desires, understand what kind of entrepreneur they want to be and act in accordance with that choice, are more likely to be successful.
Those who fail to recognise how their personal values are driving their entrepreneurial desires risk getting on the wrong trajectory which can have catastrophic consequences. Such people find it hard to align their individual actions with the actions demanded by the business. Being a successful entrepreneur takes hard work, effort and energy, no matter which trajectory you are on. To sustain that hard work, effort and energy, the entrepreneurial journey needs to fit in with the entrepreneur’s life. If your entrepreneurial journey fits in well with your desired life, you will have the energy to sustain what you are doing. If your entrepreneurial journey is out of sync with how you would like to live you are likely to run out of energy.
If your values and desires align with your chosen trajectory, you need to have the skills and knowledge to deliver within that trajectory. If you have the desire but not the skills and knowledge, you may work hard and do everything in your power to try to succeed, but you will continually come up against barriers. Such a person would do well to first develop the right business and entrepreneurial skills before pushing too hard down their desired entrepreneurial trajectory.
So what does all this mean for you?
If you wish to be satisfied, fulfilled and successful on your entrepreneurial journey, follow these three steps:
- Recognise which entrepreneurial path you subconsciously wish to be on – lifestyle, growth or revolutionary.
- Assess if you have the skills and knowledge to be effective on that path.
- Assess if the path you are currently on aligns with where you really need to be and make the necessary adjustments.
1. Assessing your desired entrepreneurial path
Assessing your desired entrepreneurial path involves being brutally honest with yourself. Many people automatically assume that they wish to be revolutionary entrepreneurs – “Wouldn’t it be nice to transform a market and become incredibly rich and famous?” they think to themselves. But when pushed to think about what they really desire, they don’t want the risk, the stress and the endless hard work that goes with building a revolutionary business. You need to go beyond your surface level desires to understand what kind of business will meet your long-term desires and align with your personal values.
10 by 10
One way to do this is to engage in what I call the ‘10 by 10’ exercise. This requires you to get a blank sheet of paper and write down ten sentences describing the kind of life you would like to be leading ten years from today:
- What work do you want to be doing?
- Do you want to be living in a specific location?
- How do you want to spend your days?
- How do you want to spend your weekends?
- How wealthy would you like to be?
- What other aspects of your life do you wish to nurture?
- What would you like to have achieved in the past ten years?
- What assets would you like to own?
- How do you want to divide your time?
- What role will family play in your life?
Be thoughtful and deep in answering these questions. Don’t sell yourself short – write at least ten sentences to create a full picture of what you desire.
Once you have ten sentences outlining your life ten years from today, consider the kind of entrepreneurial trajectory necessary to get you there and whether you are willing to embark on it. Living out each entrepreneurial trajectory has very different implications for your life and you need to figure out if your desired life and your desired entrepreneurial trajectory are compatible. Are you are willing to tolerate the stress and risk that go with being a revolutionary? Are you prepared to put in long hours and hard work that go with being a growth entrepreneur? Are you happy to forgo business growth for control if choosing the lifestyle trajectory? Table 1 provides insight into important elements of each entrepreneurial trajectory. This table can be used to assess if your chosen trajectory is likely to align with your desired life path.
2. Assessing your skills and abilities
The second order of business is to assess if you have the knowledge and skills to execute within your desired trajectory. The knowledge and skills needed to run a lifestyle business are very different from those required to build and grow a revolutionary or growth business. Lifestyle entrepreneurs need basic business management skills accompanied by the specialist skills of the business they are building. Growth entrepreneurs need skills and knowledge related to strategy, marketing, operations and human resource management to be able to find and create new markets, and hire people to manage their business in those markets. Revolutionaries need to innovate and disrupt. They must have the charisma and vision to sell a crazy idea; then, they need to surround themselves with experts who can help make that vision a reality.
3. Assessing your current trajectory and jumping trajectories
The third order of business is to assess if the path you are currently on aligns with where you want to be and to make the necessary adjustments. By carefully interpreting the outcomes of the 10 by 10 exercise and assessing your knowledge and skills, you can ensure that there is alignment between your skill levels, your desired career outcomes and the entrepreneurial trajectory you are currently on.
If there is alignment, you need to strive to be as effective as you can within your chosen trajectory. If there is no alignment, you should identify what you need to change. Do you need to shift your trajectory or develop your knowledge and skills to create alignment? Developing knowledge and skills may require work experience in an industry, attending a business course or doing some deep reading and research. Changing your trajectory involves realigning expectations and taking on the risks and work practices that are associated with a new trajectory. If you want to move from lifestyle to growth or revolutionary, you may need to bring on new partners, spend time crafting a strategic plan to set goals for the business or invest in the skills of the people in the business to create a platform for growth. If you decide to scale down and transition to a lifestyle business, you may need to simplify things, scale back on the risk within the business and realign expectations and work habits.
Understand your needs
Two years ago I shared this framework with a friend of mine. At the time he was trying to create a high growth organisation in the medical supplies industry. He had hired a number of sales and operations people, he was endlessly looking for new markets, new channels and new suppliers, yet he constantly came up against roadblocks. Early one morning as we were driving out to a triathlon together, we chatted about some of these challenges. I asked him what he really wanted from the business he was creating. After some thought he said that he was trying to create an organisation in which he would be in control and through which he would be able to make a good living and provide for his family.
Through this discussion, he realised that he had not properly thought about what kind of organisation he was trying to create and whether that would align with the life he desired. It dawned on him that the only reason that he was pushing so hard to grow his business was because “that is what is expected if you get an MBA.” Over the past two years he has scaled back his operation, reduced the amount of debt in the business, cut the payroll and changed his expectations. He is now taking home more money than before, he is less stressed and he gets to swim, bike or run much more than when he was pushing so hard for growth.
Aligning your deep personal desires with your entrepreneurial trajectory is one of the most valuable things that you can do to enable entrepreneurial success. Start now.
How To Survive Exponential Change In Your Business
How to get out of the habit of thinking small, and start thinking in giant leaps for radical – and profitable – change.
I recently went to a meet and greet session at a company that turns over R13 billion a year. As I was introduced to other executives, I was referred to as ‘the guy who is at the pinnacle of podcasting in South Africa’. This kind of feedback is truly humbling, but after hearing that, the only question I had on my mind was: “But for how long is anyone or any brand at the top of any market?”
The Challenge of Change
Change is no longer happening in a linear fashion; it’s occurring exponentially. We love linear thinking, because we have been conditioned to think in small steps (1, 2, 3, 4, 5, 6) but we totally suck at exponential thinking (1, 2, 4, 16, 32, 1 024). To a greater and greater extent this is the world we are heading into.
Almost inevitably, markets that used to be relatively predictable are winding up in an entirely new paradigm and some of the world’s largest and most reputable companies have been caught unaware. The main culprit? The exponential growth surprise factor.
For example, in 2012, Toys R Us was a $12 billion company with a retail footprint comprising 1 600 stores. In September 2017, they filed for chapter 11 bankruptcy… only five years later. The message is simple: Innovate or die.
But more importantly, there is a new challenge facing all entrepreneurs today: How can you prepare yourself and help your business survive in an exponential business world?
Here’s a four-step process that can help you get started.
1. Look out for the Warning Signs
In my experience, the warning signs of disaster are present in every industry one to three years before disaster strikes. Ironically, many businesses are simply not paying attention to the warning signs in their market — or even worse, do not know what warning signs to look out for.
Because all industries and businesses are subject to different warning signs, a simple, yet highly effective way to know when your business is in the throes of a critical warning sign is when something within your industry doesn’t make sense.
When a linear industry is on the verge of disruption it generally manifests into something that doesn’t make sense for the incumbents in that industry.
In 2008, when blockchain technology and the Bitcoin first manifested itself, it didn’t make sense to many in financial services. Fast forward to today and there are over 1 000 cryptocurrencies that you can actively trade and the promise of the decentralisation of all industries — not just the financial services industry — is very real.
So, if something new enters your industry and it doesn’t make sense to you it’s time to apply step number three.
2. Ask Why
If you ask a group of incredibly smart people to solve a very difficult problem and they can’t seem to solve it, you may find that they don’t lack collective intelligence, but perspective on the problem itself.
Whenever this eventuality occurs the best thing to do is ask “why” repeatedly until you find the perspective that you need to make new decisions in your business. It’s one of most powerful yet completely undervalued questions that any business leader can ask.
Almost all success in business comes down to execution. Toys R Us didn’t act. When all is said and done, they simply did not believe in the Internet and they paid the highest price. In an exponential world, the ability to not just act but to act quickly is priceless.
4. Move forward
No industry is immune. Let’s take podcasting for example. Our data shows that the addressable market for podcasts is already 16 million people; 50% of all podcast consumption growth over the last five years has happened in the last 12 months; and media consumption is shifting faster than we think into the on-demand space.
To address this exponential shift in media consumption, the Matt Brown Show is evolving from a podcast into a fully-fledged new media company. So, my question to you is simple: How is your business preparing itself for the future? EM
IN YOUR TOOLKIT
Get some perspective
While decades of researchers have struggled to understand why even the best companies almost inevitably fail, Clayton Christensen shows how most companies miss out on new waves of innovation. His answer is surprising and almost paradoxic: It is actually the same practices that lead the business to be successful in the first place that eventually can also result in its eventual demise. This breakthrough insight has made The Innovator’s Dilemma a must-read for managers, CEOs, innovators, and entrepreneurs alike.
Drawing from Matt Brown’s article, start implementing quarterly meetings that review the biggest challenges the company is facing, and start asking the question ‘why’ of even the most basic tenets that are being taken for granted.
The idea is to find a new perspective of the same problem.
Too Big For Your Boots?
How to manage the complexities of a rapidly expanding business.
It may come as a surprise to many, but too much success too soon can result in a company’s failure. That’s often because the company out-runs its ability to sustain and control that success, and a decline follows.
Say, for instance, that an organisation reaches increasingly higher sales targets, but its infrastructure doesn’t scale at the same rate. Inconsistencies and weaknesses begin to appear in its management systems. Quality suffers, and, eventually, the positive trend plateaus and tips downwards.
The answer? Don’t misjudge the impact that business and management can have on realising a sustainable growth strategy. The systems you have in place today may not work when addressing new challenges – or, they may make it next to impossible for you to meet them.
If your organisation is on a growth path, consider these six elements:
1. The right talent
Develop a management system that measures accountability against specific standards and ensures that the quality of your products and services doesn’t waver. As service quality often depends on human capital, you’ll need the right mix of people at every level.
Give non-management employees the autonomy to contribute positively, and recognise them for it. They’ll reward you with good outcomes and ensure that the foundation of your growth is that much sturdier, while developing a robust working environment.
Identify the people in your organisation whose roles will be most affected by your expansion, and enable them to take initiative outside of their standard work requirements. This way, they’re more likely to get involved and help you to create new cross-organisational systems that address tasks in parallel.
2. Controlling quality
It’s easy to lose track of quality when your business is growing speedily, so give the task of maintaining quality to a loyal management team. Assign them the responsibility for overseeing everything from product development to internal systems and manufacturing.
It’s also important for you to remember that service-based organisations face quality concerns as they grow, and that finding the right talent (see Element #1 above) can be as limiting as a blockage in a production line.
3. Processes that scale
Make sure that your processes and projects are executed in the same way every time. Don’t let your systems become un-scalable; establish which ones are most likely to come under strain as the company expands.
4. Manage cashflow
Numbers never lie. When your company is growing, beware of the danger of spending more than you can afford. More oversight or adjustments may be necessary to increase effectiveness, quality, and sales.
When determining if you’re going to front-load your capital investment, be confident that cash is coming into your account as a result of the investment. Remember that cash profits and accounting profit are very different. Cash profits are your bread and butter.
If you aren’t positioned to finance your own expansion and you require outside funding, carefully consider the pros and cons of getting into debt, as well as the length of the loan and interest rate.
5. Finding investors
Conduct detailed research into potential investors, as each will have sector or industry interests, investment mandates, and value preferences. Pinpoint these, assimilate with them, and make sense of them before engaging.
Then, make the effort to thoroughly evaluate the potential investor. Do this by first determining where your interests are aligned and then uncovering:
- The source of the investors’ capital
- Their investment track records
- The returns that they usually aim for
- Their traditional risk profiles
- Their investment mandates.
6. Communicating culture
Spend as much time determining, sharing, and entrenching your company’s current and growing culture as you do addressing your growth strategy.
With each new stage of growth, commit time and resources into making sure that the cultures of different departments don’t implode when put together – impacting on customers, important employees, or worse.
Make your employees aware of what the future will hold, how it is likely to affect them, and what the bigger picture looks like.
No matter the size of your business or what your growth plans are, expansion can expose you to a host of risks. These may be existing problems that worsen, or new ones that are uncovered for the first time. Either way, it’s crucial that you identify them, prepare for them, and make plans to protect yourself in the face of growth.
Driving Your Business Growth Towards More Customers
Designed to help its customers get the most from their businesses through the right telematics solution, New WEBFLEET can help you reach your customers quicker, get more done, improve efficiencies, save costs and boost your revenues.
Europe’s highly regulated operating environment has made telematics ubiquitous in business. On the one hand, this means industries across the spectrum have become safer, more efficient and highly productive across the EU. On the other, it’s much harder to stand out from the crowd when everyone follows the same best practice standards.
“We don’t have those same stringent regulations in place,” says Justin Manson, Sales Director, Africa at TomTom Telematics. “Our clients have realised what a huge competitive advantage this actually offers them though.
“Locally, everyone understands the role that telematics plays in tracking what your drivers are doing right and wrong, and use it as a tool for encouraging good driving practices, but there’s so much more to this solution, and we’re making it our mission to help business owners really use it to their benefit.
“When deployed across the organisation to its full capabilities, a telematics system can radically improve productivity and workflow. Done correctly, a business can save up to 10% on its bottom line, and redeploy that cash into the company’s growth, thanks to drivers reaching customers quicker and getting more done. The right data also increases productivity and ensures better turnaround times.”
Thomas Schmidt, MD of TomTom Telematics, loves visiting South Africa for this very reason. “Because so many business owners aren’t using telematics to their full extent, there’s such a huge opportunity for us to assist businesses in their growth here,” he says. “We deliver a high-value stack of products that can change the way companies operate, and most importantly help them save money and make money. The challenge for us is educating our customers so that they understand what our solutions offer, and the incredible impact they can have on a business. We consistently improve these solutions based on customer feedback as well, making them very much from customers for customers.
“Anyone can buy a map for less than R100. Why invest in such expensive devices? The answer is because we’ve developed solutions that change lives. With the right data — and access to that data — you increase safety, simplify your business, drive efficiencies, increase your output and customer service, and ensure you are always productive and reliable — across the organisation. And that impact can be measured, and given a real ROI value.
“Imagine the impression companies that operate at that level make on their industries. They stand out from their competitors. There is so much room for growth in South Africa as we deploy these solutions.”
As an organisation, TomTom Telematics is focused on continuous growth and innovation as well, constantly learning from market conditions, its customers and industry needs to improve its product offerings.
The result is the launch of New WEBFLEET in February 2018. “We’ve increased the value we offer our customers,” says Thomas. “We’ve collated data from hundreds of thousands of customers around the world who gave us their feedback through surveys, and New WEBFLEET is a window into easy-to-use, smart fleet management that is a game changer for companies.”
“TomTom Telematics is in the business of helping businesses,” agrees Justin. “Our goal is help our customers master their challenges. The right data at your fingertips will help you change the way you operate. That’s our goal. How much cash is being left on the table in an organisation because of inefficiencies?”
Introducing New Webfleet
The smartest way to manage your vehicles and mobile workforce
TomTom Telematics’ state of the art Software-as-a-Service (SaaS) fleet management solution, with best-in-class user interface, is inspired by two decades of working together with customers to achieve more for better fleet management. New WEBFLEET is everything you need to manage your vehicles in the cloud, in real time. It allows you to monitor reports and dashboards, manage orders/workﬂow, and improve driving behaviour, safety and service, helping you save fuel and reduce costs.
Best-in-class user interface
- A future-proof platform with a completely renewed interface, based on the latest HTML5 technology and driven by continuous innovation.
- Simple and clean interface, with minimised clicks for faster working.
- Intuitive functionality, means it is more accessible for greater impact across your business.
- User rights management and state-of-the-art data handing ensures the highest level of data privacy and data security.
- Fast access to the right information.
Know where your vehicles are and where they have been. Different map options such as Google, Google Street View or satellite map are enriched with traffic information, giving you a more detailed view on what’s happening on the roads. Toggle between different types of information on the map such as traffic, addresses and areas and create specific views, so you only see the information you need.
New WEBFLEET’s dashboard gives an overview of performance at a glance. Up to 27 KPIs can be used to track the performance of vehicles, individuals, benchmark teams or give a simple overview. This helps you to track real-time performance against your pre-defined KPIs.
New WEBFLEET gives you instant access to the information that matters, meaning you can spot trends over time and use real-time information to make smarter and more informed decisions. You can instantly download or schedule reports to help you stay on top of everything — from fuel efficiency and legal compliance to quality of service.
Manage on the move
New WEBFLEET is optimised so you can manage your fleet on any device by entering WEBFLEET through a web browser or by downloading the WEBFLEET Mobile app on your smartphone.
Send routes direct to drivers
- Plan accurate routes in New WEBFLEET by adjusting multiple variables such as location, time of departure/arrival, traffic and vehicle type.
- Get a choice of alternative routes, as well as suggested fastest route with traffic.
- Customise your route by simply adding new waypoints, or dragging and dropping existing waypoints on a route. Then choose from guided or forced route* options.
- Send planned routes directly to a TomTom PRO driver terminal to keep your drivers on the right track.
Personalised Map views*
- Create your own saved map view to reach information you need fast.
- Switch between vehicle groups or areas, without needing to adjust the map filters and zoom levels. n
Many ways to customise WEBFLEET to suit individual requirements from personalised views to adding information to make what you see more informative on one page.
Plan a route the way you want it
Use multiple variables (including waypoints) to give fastest or most efficient routes.
Across different device types, allowing you to always stay on top of business.
Simple, clean and easy to administer
Toggle between views to get the right information to focus on the task in hand. Get the right information to the right people at the right time, keep data secure and in the right hands.
Send routes to driver terminals
In real time, ensure drivers follow or avoid specific routes.
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- Leadership: What Is Your Why? (Read Purpose)
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