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Building A Multimillion Rand Event Business

The special events industry has grown enormously in the past decade. In South Africa, two event entrepreneurs stand out from the crowd. Find out how they did it and what they learnt about starting and growing event-based ventures.

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Design Indaba

Ravi Naidoo turned the Design Indaba into the world’s top design conference generating R115 million in sales

Designing a Winning Business Model to Showcase SA Talents

An academic at heart, Ravi Naidoo, spent his youth engrossed in his studies. He completed a degree in medicine at UCT and was reading for his masters in the early 1990s – a time when change was in the air and South Africa was on the brink of a socio-economic revolution.

There was something big happening and Naidoo wanted to be part of it. In addition to his love for learning, he has always had a fetish for all things creative. Even as a serious undergrad med student, he had completed several arts courses and was a seasoned speech and drama enthusiast.

“I wanted to do something new and challenging,” Naidoo recalls. “So I wrote a wacky, irreverent letter to a whole lot of ad agencies.” He won’t be too specific about the content, but it had something to do with not wanting to spend the rest of his life nailed to a stool in a dingy lab. He received two replies. One agency wanted him to do a graduate degree in advertising. The other, Young & Rubicam, had just launched a pharmaceutical division and was only too keen to welcome him on board.

That’s how he got into advertising. Within six months he was an account director. But come 1993, Naidoo was ready for another challenge and he convinced his wife to enrol with him to do an MBA. They were the only two people of colour in the class, and as usual Naidoo excelled and was named MBA student of the year.

It was eight months into the programme that he launched Interactive Africa, the company that was to become best known for the Design Indaba, an internationally recognised conference and showcase of design talent that attracts around 40 000 people today from all the creative industries – graphic design, advertising, film, music, fashion, industrial design, architecture, craft, visual art, new media, publishing, radio, television and performance art.

How it all started

Interactive Africa started life as a marketing project management company. “I had found the ad industry a trifle too formulaic, and I was convinced that we needed other models and platforms to help marketers help clients beyond the ‘picture, logo, promise’ advertising formula. Instead, we focus on creativity, media leverage and business strategy, all governed by a measurable process.”

One of his first successes under the Interactive Africa banner was the creation of the Vodaworld magazine in 1994. Today, Interactive Africa is Vodacom’s longest-serving marketing agency. More recently, the company was instrumental in getting South Africa’s 2010 World Cup bid off the ground.

But it’s the Design Indaba, a brand that Naidoo created from scratch, that he is most proud of, and rightly so. This annual event was launched at the Mount Nelson in 1995 and attended by just 200 delegates. At the time, Naidoo was driven by the conviction that the South African economy had to become less dependent on raw commodities and start to leverage value-added products. It was a reality that Naidoo set out to change.

“We had great skills sets in this country at that time, but what we needed was to look at things afresh. I was coming at the problem from a strategic point of view – by 1994 our economy was moribund, and we were merely selling commodities without producing anything of real value. “As the world’s top gold producer, for example, the country has not been known for its jewellery design. Yet, when a gold ingot is turned into beautiful jewellery, the value goes up enormously. My goal was to work towards creating a society that places greater value on design and innovation.”

That first Design Indaba delivered way beyond Naidoo’s expectations. “I hadn’t realised just how starved people were for creativity and inspiration,” he says. “Not only had we been isolated from the rest of the world, but we had also become insular and narrow-minded as a result.”

One of the highlights of that first event was a presentation given by the creative directors behind the Atlanta Olympic Games bid. They gave the delegates some deep insight into what it takes to package a city. People were blown away and those working on Cape Town’s 2004 Olympic bid got a nice little wake-up call. They realised they had to up the tempo and increase their workload.

A post-conference survey showed that 92% of delegates had responded positively and wanted Naidoo to do it again. “I was a bit of an accidental entrepreneur,” he laughs. “I had a permanent staff of two at the time so I made a pledge to the design community to make the Design Indaba a biennial event. I really had no idea that it would become such a money spinner at the time.”

Subsequent events were held in 1997 (attendances doubled), 1999 (attendances went up by 70%) and 2001 (attendances doubled again), with the Design Indaba outgrowing its venue every time. From taking over the entire V&A Waterfront, it moved to Artscape and then to the Cape Town International Convention Centre after it opened in 2003.

Building revenue streams

Following the 2001 event, Naidoo decided that it was time to make it an annual happening. However, creating an event-based business is not about an annual three-day frolic, Naidoo cautions. “You actually have to build a solid business with strong revenue streams and professional staff, not casual labourers. Don’t think you can earn money in a few days to make that business sustainable for the other 362 days of the year.”

That’s why he introduced additional income channels such as the Design Indaba magazine, a multi-award winning quarterly publication that champions local creativity, features international expertise and investigates how design can create a better world. On diversification, Naidoo points out that you can diversify only when you know exactly what you stand for. In 2004, he launched the Design Indaba Expo, a 100% South African celebration of the country’s best creative talent across all the creative industries.

“The Design Indaba was in its eighth incarnation by then and we had to find a way to really differentiate it – we had to actually spend ahead of where the market was. There was not enough of a critical mass to justify the expo, but that is what turned it into a multi-sectoral event. And rather than just selling space to exhibitors, we curate the expo and we have an independent curatorial board of leading creatives to do this.”

That’s because standards are important, he adds. “We only feature what is home-grown, high-end and exportable. We are not interested in derivatives and mimicry. No knock-offs from Milan.”“While the conference has always been fiercely global, the expo is entirely local. What we have today is a global, best-in-class conference with speakers from around the world, accompanied on the flip side by an exhibition of top local talent.”

Making it all work

One of the great lessons Naidoo learnt along the way is that  in the events business, you have to get out there and campaign, canvas and forge relationships with people and organisations. The design Indaba has thrived because he has never run it like a creative or cultural event; instead it’s managed like a sports event. That means securing robust sponsorship, ensuring accountability and strict auditing processes, and partnering with media organisations all around the world. These are what Naidoo calls the building blocks of success.

“As we grew, we set out to be the best – to become the Cannes of the design world. That’s why we now have around 40 000 people attending. We are intensely competitive.”

He straightforwardly declares the Design Indaba to be better than similar events held in design hot spots like London and San Francisco. It’s a claim borne out by EIBTM, a top global exhibition for the conference, incentives, events, business travel and meetings industry, which in 2005 voted the Design Indaba the best conference in the world. To date, it’s the only African event to be awarded this status.

Naidoo is also aiming to open up another revenue steam through the Design Indaba’s web strategy which includes an e-commerce channel.

“The retail side of the expo has been very successful,” he explains. “In 2009, we had a total of R115 million in sales in three days. Our goal now is to build a design portal that will enable people here and abroad to buy South African artefacts, like Imiso ceramics, online.”

Having built a strong brand, Naidoo and his team are often invited to speak at conferences around the world. He was invited to Singapore to speak about the relationship between design and farming, and paid $50 000 for the favour.

Partners have played a major role in ensuring the sustainability of the event, with Naidoo having big names on board, including Woolworths, Absa, DSTV, Grolsch, Jupiter Drawing Room, Sappi, South African Tourism, Chaywa, and One & Only. It’s also key to remember, Naidoo says, that the Design Indaba is owned by Interactive Africa, itself a big business with clients like Vodacom and FIFA.

Managing Money Matters

Naidoo recalls that in the beginning, he was interested in breaking even, but had to tighten up his infrastructure and his team as the business grew. Financial modelling was vital, and he spent a great deal of time working out what the market could bear from a pricing point of view.

“The Design Indaba is the cheapest creative event in the world, priced at around $500 to $600. Compared to similar events that come in at 2 000 Euros, that’s a compelling offer – you have access to a whole world of design at a rand-based cost. It was important to price the event so that it’s accessible to South Africans.”

When it comes to finance, money is nothing, Naidoo maintains. Leading with passion is what counts. Nonetheless, he had to raise R50 000 to launch the first Design Indaba. He did so through trade exchanges, barters and payments in kind.

Raising money was doubly difficult for Naidoo because his idea was untried and no-one knew who he was. Added to that, he was tackling a market that is known less for its appreciation of culture and design and more for its obsession with politics and sport. “I got the money because I had a big idea, a great concept, a unique proposition.” Call it what you will, the clincher was his ability to articulate his vision clearly. It’s one way in which he has benefitted from his speech and drama classes.

“You need to have persuasive powers to get people to buy into your idea. You need to know how to package and present your plan. Everything we do has style and a compelling narrative attached to it.” The conference turned a profit from the word go. In that first year, turnover was referred to in terms of hundreds and thousands; today it’s at around R20 million. When the expo was launched in 2004, Naidoo took a big risk and spent a lot of money to start it. It was a move that began to pay off only two years down the line. At first, he struggled to find 80 exhibitors when he knew that he needed 200 to break even. Today there are more than 300. He notes that early bird offers are the lifeblood of a young events company and that’s what has enabled the expo to grow alongside the conference.

How the Design Indaba become a worldwide success?

Naidoo attributes the prestige of the event – reputation being a key factor in his industry – to maintaining global competitiveness and aiming extremely high. There is simply nothing like it in the world – 60 creative leaders in one room over three days and around 300 exhibitors of local merchandise across a range of industry sectors in a top quality venue.

“One of the key differentiators is the fact that while industry sectors generally are siloed, we have done away with the traditional lines between things like design and biology, design and agriculture.” He also warns against the cut-and-paste approach applied by many events companies. “When we look for speakers, we do not deal with speakers’ bureaus, nor do we choose MCs from the celebrity circuit. We want uniqueness, not the same messages that are trotted out at every function.”

The toughest challenge for Naidoo has been the relationship with local, provincial and national government. Where private companies have supported the Design Indaba and invested in growing it into what it is today, the Government has done the opposite.  “Government does not do multi-term agreements, so what goes one year does not apply to the next, despite what the Design Indaba contributes to the Western Cape’s GDP. This confounds planning. We can only do so much to promote the event; it would be gratifying to have support form the public sector that goes beyond cutting ribbons for an event that has won awards.” Harsh words, but the challenge is a very real one: the Arts and Culture ministry dropped the Design Indaba ahead of the World Cup, favouring a once-off event over a perennial attraction.

What’s next?

Having successfully leveraged the success of the Design Indaba for other areas of growth, Naidoo is proud of having built a prodigious global network which Interactive Africa is able to tap into for many other client projects. “We can talk to industry professionals in most cities around the world; we are not solely reliant on Cape Town’s talent. It really is an unfair advantage. We are very trend aware and in touch with what is happening.” He plans to use that knowledge to kick-start the web business and take the Design Indaba beyond the borders of this country.

Who is it for?

  • 65% of the Design Indaba board are practitioners in creative fields
  • 35% are people who commission creative work
  • 20% of people who attend are overseas visitors
  • 60% are from Gauteng

Design Indaba Milestones

1995: The Design Indaba is launched and 200 delegates attend

1997: Second Design Indaba event is held and the number of participants doubles

2001: Design Indaba becomes an annual event

  • Design Indaba magazine is voted
  • best new design magazine in the world in New York

2004: Design Indaba moves to the Cape Town International Convention Centre to accommodate participants

2005: Design Indaba voted best conference in the world by EIBTM

2007: Design Indaba wins Loerie gold award in the live events category


Case-Study

ABSA Cape Epic

Kevin Vermaak built the Absa Cape Epic into the race of choice for mountain bikers globally

How a Cape-Based Cycling Race Became a Global Epic
Written by Greg Fisher

The majority of theories and models on entrepreneurship and new venture creation focus on business opportunities orientated around day-to-day operations – such as a retail business that trades on an ongoing basis, a manufacturing entity that continuously produces output, or a service organisation that is always available to clients. Yet many new business opportunities are linked to events – either once-off events (such as a music concert or a trade convention) or regular events with significant amounts of time between each edition of the event (such as an annual sports event or a biannual exhibition). Under such circumstances the focus areas for successfully creating a new business are subtly different from those of an ongoing business operation. I call this concept event-based entrepreneurship. In this article I unpack some of the critical elements of event-based entrepreneurship by examining the intriguing case study of the Absa Cape Epic, an annual mountain bike race in the Western Cape.

Absa Cape Epic: The Learning

The business development process behind the race provides key insight into some of the most critical elements in the creation of a sustainable and profitable event-based business. Such elements include the following:

1. Funding. The development of the race as a business was largely self-funded (i.e. bootstrapped). Aside from a bridging loan from the IDC that was granted three years after launching the venture, Vermaak and his team developed this enterprise with true global reach using only internally generated funds supplemented by limited personal funds.

2. Sponsorship. The business focuses on a very niche, secondary sport, which seven years earlier had enjoyed only limited spectator or sponsor interest in South Africa. Yet through the Absa Cape Epic, Vermaak has elevated the prestige, professionalism and competition of the sport to the point where it now has television appeal across the globe and has blue chip companies vying to be associated with the race.

3. Business Model. In developing the Cape Epic as a business, Vermaak realised that there are multiple potentially profitable revenue streams associated with a single popular event. He has effectively exploited many of these additional revenue streams in a way that benefits all stakeholders and enables the business to turn a profit from the R30 million in revenue it generates from a single race.

In unpacking the intricacies of building an event-based business, I will discuss each of these elements in detail in the context of the Absa Cape Epic.

Funding

Many prospective entrepreneurs believe that funding is the most significant barrier to starting a new business in South Africa. They spend huge amounts of time and effort trying to convince financiers to invest in their business and enable them to launch a new product or service. Sadly, many fail to realise that it is highly unlikely that any financier will provide capital for a business that is not yet operational. Thus, much of their early passion and energy is focused on something that yields very low returns – trying to raise money. Vermaak went about things very differently. He focused primarily on just getting the first race off the ground and in so doing tackled issues with the philosophy of “how can I make this happen” instead of asking “how much money will I need to raise to make this happen”.

This meant that instead of putting a PowerPoint presentation together to persuade banks and venture capitalists to fund his idea, he put a presentation together to go out to sports marketing firms and sponsors with whom he could partner to sell his race on a global platform. Instead of engineering the business plan to make the returns of the venture look attractive he engineered the marketing material to make the actual race look attractive to mountain bikers across the world.

In June 2003, he opened entries for the inaugural race at a cost of R7 800 per team and the 275-team slots were taken up and paid for in just three days. With that uptake in entries he quickly had about R2 million in the bank that he could use to deliver the first event. Although R2 million seems like a large sum of money to deliver a mountain bike race, because of the quality, logistics and length of the event it was not enough to cover his costs for the first race. Vermaak worked incredibly hard to persuade suppliers to extend payment terms – a tough thing to negotiate for a company with no track record. “These were highly stressful times,” he recalls, yet his tenacity and persuasive skills resulted in a number of suppliers agreeing that he could settle his debts 90 days after invoice.

This meant that if the entries for the following year’s race could be opened up within three months of the 2004 race, then Vermaak could use entry fees for the 2005 race to cover the deficit from the 2004 race. The difference in timing between collecting revenue and paying expenses enabled Vermaak to creatively build the business off a very low capital base. By 2006, two highly successful editions of the Cape Epic had been staged and Vermaak and his team now had the credibility and track record to approach the IDC for a bridging loan. Because of the good work they were doing to expose South Africa on a global stage, the IDC agreed to give them a bridging loan at preferential rates. That same year Absa agreed to come on as a title sponsor of the event. The title sponsorship deal helped reduce the deficit between income and cost on each race yet it still took another two years of hard work for the company to finally break-even and make a profit.

Key lessons: funding an event-based business

  • Be patient – building a profitable event based business takes time. You may not make any profit on the first few events but if you learn through the process and deliver a good experience for customers, over time you can start to generate a profit.
  • Get operational – do whatever you can to get the business off the ground. It is much easier to get loan funding once you are generating cash flows.
  • Use timing of cash flow creatively – speed up revenue collection and slow down payments to suppliers.

Sponsorship

Sponsorship is a critical element of the Absa Cape Epic’s business model. Vermaak concedes that “the business of sport is built around sponsorship” and he has set out to create “the Formula 1 version of mountain bike racing”. He cannot rely on rider entry fees to cover the costs of the race; he and his team therefore need to create an event that is highly attractive for big companies to be associated with. From the outset, Vermaak set himself the goal of attracting a title sponsor with global recognition and a minimum of R100 million in marketing budget. His intuition told him that the race had to be associated with “big blue chip brands” for it to be a long-term success. Initially he spread his net far and wide, doing presentations to whoever would listen. He was thrilled when his marketing partners secured Adidas International as a sponsor for the very first event. As he has built this business, Vermaak’s secret to success for securing sponsorships was Gary Player’s mantra, “the harder you work the luckier you get” – he just kept plugging away until he got a positive response.

The route to securing Absa as the title sponsor was a little more strategic. Vermaak realised that the title sponsor was likely to be a South African company and he targeted companies with a marketing budget of R100 million or more. He exploited every personal relationship possible to find a way into the executive offices of SA’s blue chip companies – calling on people who had ridden the race, family, friends and long lost acquaintances to get an introduction. In this process, he discovered that the executive assistant to Steve Booysen, then CEO of Absa, was entered into the following year’s race.

Using this as an access point into Absa, one of South Africa’s largest financial services organisations, he went through a series of meetings with the right people, and finally Absa agreed to be the title sponsor. Having a title sponsor has significantly improved the financial viability of the event but for Absa it has also created a unique marketing opportunity. Firstly, the average South African rider spends approximately R40 000 in preparing for and getting to the race, which suggests that the majority of the riders in the race are fairly wealthy and influential. The riders of the race are therefore an attractive captive market for Absa. Secondly, Absa has the opportunity to invite some of its most important clients to ride the race with senior employees. The relationship bonds that are forged with important clients during an eight day mountain bike race are more valuable than a relationship forged over a beer at a rugby game. Over the years, more and more sponsors have expressed an interest in being associated with the Cape Epic but one of the fundamental lessons that Vermaak has learned is that “lots of sponsors is not the answer”. The relationship with each sponsor takes time and effort to nurture and it is thus much more productive to have a few high value sponsors rather than many less significant sponsors.

Key lessons: Sponsorship for an event-based business

  • Know what you want – establish criteria for the type of sponsors that are going to best serve your event and be best served by it in the long-term, then spread your net wide across those companies that meet your criteria.
  • Leverage relationships – use whatever access point you can to get a meeting with the decisionmakers in the companies that you are targeting as potential sponsors.
  • Quality is better than quantity – don’t be tempted to take on too many sponsors. Each sponsorship relationship takes time, effort and energy to nurture and manage.
  • If you take on too many sponsors you may not be able to manage any of them effectively.

The Business Model

The two broad categories of events in the business of sport:

1)     The mass participation event in which the organisers rely primarily on many thousands of relatively small entry fees to generate revenue for the event (e.g. the Comrades Marathon, the Pick ‘n Pay Cape Argus Cycle Tour).

2)     The professional event in which the organisers attract companies to sponsor an event, pay professionals to participate in the event and charge spectators to watch the event (e.g. The Nedbank Golf Challenge, FIFA World Cup).

Kevin Vermaak realised that his concept of the Cape Epic did not fall directly into either of these categories. He wanted to attract the world’s top professional riders to the race but also provide an opportunity for the aspiring amateur mountain biker to participate. He wanted to charge an entry fee for participation but he knew there was a limit to the number of people he could allow to participate (due to limited route access and safety). He therefore needed to create a new business model that would enable him to create a profitable “pro-am” (professional and amateur) sports event. Over the years he has been open to experimenting with a different mix of revenue streams for the business. As early as the second year of the event he realised that there was an opportunity to “introduce extra rider service products – ‘margin sales’ – like pre- and post-event hotel accommodation, accommodation upgrades during the race, mobile homes, hospitality, etc.” Many of the riders travelling to the race were willing to pay for extra services before the race and along the route.

By packaging and selling these extra services Vermaak uncovered an extra revenue stream that is seldom exploited by organisers of similar events. Over the years this offering has grown to include rider DVDs, clothing, massage services and nutrition services, among other things. The ‘margin sales’ revenue stream now constitutes 20% of the company’s revenue (approximately R6 million). The other two primary revenue streams are sponsorships (40%) and entry fees (40%). Because the Cape Epic is shown on so many TV channels across the globe, many people perceive that TV rights should be a significant revenue generator for the business but as Vermaak points out: “Mountian biking is not football, we pay an agency to give our TV products away for free.” He recognises that he needs to increase the profile of the sport of mountain biking significantly to create value for his sponsors and make the business sustainable in the future.

Thus, he invests heavily in getting the race onto TV screens across the globe. Being a first mover and an innovator in an emerging industry is often expensive.

One needs to invest heavily in increasing the legitimacy and profile of the entire sector which opens the door for others to move in and establish their businesses on the back of the hard work of the innovating company. Similar examples are evident in the coffee and airline industries. In the coffee industry, a multitude of premium coffee shops emerged after Starbucks established a market for gourmet take away coffee. In the airline industry, a stream of new low cost carriers popped up after Southwest Airlines worked hard to establish the credibility of low-cost airlines.

In most cases where an innovating company needs to invest heavily to establish a new industry they will retain the highest market share in the sector but it is often a lot easier for other players to come in and quickly turn a profit, even though they may have lower market share than the early innovator. Kevin Vermaak sees the effect of this in mountain bike stage racing.

A stream of new events has emerged locally and abroad in the wake of the success of the Absa Cape Epic.

Key lessons: building a profitable event-based business

  • Look for alternative revenue streams associated with your core product but don’t over-engineer the additional offerings – recognise where you have the opportunity to package and sell other products or services linked to what you currently do. Don’t feel locked into just one or two revenue streams; look for alternative sources of revenue. As you do this, be careful not to over-engineer your additional offerings such that they take excessive work to deliver. The team behind the Cape Epic is very careful to create ‘standard products’ for their margin sales so that people buy the service that is offered or not at all. They don’t offer customised versions of any of these services as that creates more work than it is worth.
  • Recognise whether you are a leader or a follower in your industry and invest accordingly – evaluate whether your company needs to establish a market and legitimise the industry in which you operate. If so, take a long-term view, seek to be the leader in the industry but recognise that it may take time to get to profitability. If you are entering an established industry, recognise that your market share may be restricted but look for ways to get to profitability quickly.
  • Experiment and learn as you go – in a new industry no-one really knows what the standards are and thus the best way to learn is to experiment. The people behind the Cape Epic have used online auctions and premium charity entries to test price points and they have experimented with route changes and race formats to increase rider appeal and decrease logistical overheads. They are also continually evolving their company structure to make the business more efficient and effective as they grow and learn.

As Kevin Vermaak reflects on his journey of building a world-class event-based business from scratch, he passionately acknowledges the role that mentors and role models have played in influencing his decision-making processes. I have no doubt that his willingness to share aspects of his journey in building the Absa Cape Epic as a viable business will influence other entrepreneurs with aspirations to build world-class event-based businesses and, as such, his own function as a role model should be highlighted.

Absa Cape Epic: The Event

The Cape Epic is a two-person team mountain bike stage race over eight days, covering approximately 800 kilometres through the mountains of the Western Cape. The race is limited to 600 teams (1 200 individuals).  Some 35% of the participants are international riders coming to South Africa from more than 40 countries. Entrants in the 2010 race paid R25 200 per team to enter the race and the lottery for entries into the 2010 race was oversubscribed. The Cape Epic is one of only four bicycle stage races and the only mountain bike race in the world to be classified by the UCI (the International Cycling Federation) as Hors Categorie (beyond classification). The other three stage races with the Hors Categorie classification are the Tour de France, Giro d’Italia and Vuelta Espana. The 2009 edition of the Cape Epic was broadcast in 175 countries, on 205 TV stations attracting 4 300 hours of global TV coverage. This makes the event the most televised mountain bike race of all time.

Absa Cape Epic: The Business

Beyond being a truly world-class cycle race The Cape Epic is a remarkable entrepreneurial story. With the impact that this race has had on global cycling it is hard to believe it is just less than seven years old and was started by a single individual. Kevin Vermaak conceived the idea while lying on the beach in Costa Rica in November 2002. He had travelled from London to Costa Rica to do the La Ruta mountain bike race. “La Ruta was popular for what it was but it was very expensive,” reflects Vermaak, who grew up in the Eastern Cape and attended the University of Cape Town. He knew that South Africa was a much better venue for a world-class mountain bike event. “The terrain, beauty, people, services and facilities in the Western Cape would make it possible to organise a far superior race.” Vermaak went about creating a business plan for his new venture and “three months later I’d packed up eight years in London and was starting a new life in Cape Town,” he remembers. Recognising the need to market the race on a global platform, he first forged a relationship with marketing partners in Munich and then focused on developing the brand, the logo, the ethos and refining the basic concept so that he could begin selling entries for the inaugural race in March 2004.

Over the past six years the race has grown into a global phenomenon and has been referred to as “the Tour de France for mountain bike pros and the best week of the year for recreational riders” by Christoph Sauser, the multiple mountain bike world champion and overall World Cup champion from Switzerland.

Entrepreneur Profiles

Expert Advice From Property Point On Taking Your Start-Up To The Next Level

Through Property Point, Shawn Theunissen and Desigan Chetty have worked with more than 170 businesses to help them scale. Here’s what your start-up should be focusing on, based on what they’ve learnt.

Nadine Todd

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Vital Stats

  • Players: Shawn Theunissen and Desigan Chetty
  • Company: Property Point
  • What they do: Property Point is an enterprise development initiative created by Growthpoint Properties, and is dedicated to unlocking opportunities for SMEs operating in South Africa’s property sector.
  • Launched: 2008
  • Visit: propertypoint.org.za

Through Property Point, Shawn Theunissen and his team have spent ten years learning what makes entrepreneurs tick and what small business owners need to implement to become medium and large business owners. In that time, over 170 businesses have moved through the programme.

While Property Point is an enterprise development (ED) initiative, the lessons are universal. If you want to take your start-up to the next level, this is a good place to start.

Risk, reputation and relationships

“We believe that everything in business comes down to the 3Rs: Risk, Reputation and Relationships. If you understand these three factors and how they influence your business and its growth, your chances of success will increase exponentially,” says Shawn Theunissen, Executive Corporate Social Responsibility at Growthpoint Properties and founder of Property Point.

So, how do the 3Rs work, and what should business owners be doing based on them?

Risk: We can all agree that there will always be risks in business. It’s how you approach and mitigate those risks that counts, which means you first need to recognise and accept them.

“We always straddle the line between hardcore business fundamentals and the relational elements and people components of doing business,” says Shawn. “For example, one of the risks that everyone faces in South Africa is that we all make decisions based on unconscious biases. As a business owner, we need to recognise how this affects potential customers, employees, stakeholders and even ourselves as entrepreneurs.”

Reputation: Because Property Point is an ED initiative, its 170 alumni are black business owners, and so this is an area of bias that they focus on, but the rule holds true for all biases. “In the context of South Africa, small black businesses are seen as higher risk. To overcome this, black-owned businesses should focus on the reputational component of their companies. What’s the track record of the business?”

A business owner who approaches deals in this way can focus on building the value proposition of the business, outlining the capacity and capabilities of the business and its core team to deliver how the business is run, and specific service offerings.

“From a business development perspective, if you can provide a good track record, it diminishes the customer’s unconscious bias,” says Shawn. “Now the entrepreneur isn’t just being judged through one lens, but rather based on what they have done and delivered.”

Related: Property Point Creates R1bn In Procurement Opportunities For Small Businesses

Relationship: “We believe that fundamentally people do business with people,” says Shawn. “There needs to be culture match and fluency in terms of relations to make the job easier. As a general rule, the ease of doing business increases if there is a culture match.”

This relates to understanding what your client needs, how they want to do business, their user experience and customer experience. “We like to call it sharpening the pencil,” says Desigan Chetty, Property Point’s Head of Operations.

“In terms of value proposition, does your service offering focus on solving the client’s needs? Is there a culture match between you and your client? And if you realise there isn’t, can you walk away, or do you continue to focus time and energy on the wrong type of service offering to the wrong client? This isn’t learnt over- night. It takes time and small but constant adjustments to the direction you’re taking.”

In fact, Desigan advises walking away from the wrong business so that you can focus on your core competencies. “If you reach a space where you work well with a client and you’ve stuck to your core competencies, business is just going to be easier. It becomes easier for you to deliver. Sometimes entrepreneurs stretch themselves to try to provide a service to a client that’s not serving either of their needs. This strategy will never lead to growth — at least not sustainable growth.”

Instead, Desigan recommends choosing an entry point through a specific offering based on an explicit need. “Too often we see entrepreneurs whose offerings are so broad that they don’t focus,” he says. “Instead, understand what your client’s need is and address that need, even if it means that it’s only one out of your five offerings. Your likelihood of success if you go where the need is, is much higher.

“Once you get in, prove yourself through service delivery. It’s a lot easier to on-sell and cross sell once you have a foot in the door. You’re now building a relationship, learning the internal culture, how things work, what processes are followed and so on — the client’s landscape is easier to navigate. The challenge is to get in. Once you’re in, you can entrench yourself.”

Desigan and Shawn agree that this is one of the reasons why suppliers to large corporates become so entrenched. “Once you’re in, you can capitalise from other needs that may have emanated from your entry point and unlock opportunities,” says Shawn.

Building a sustainable start-up

While all start-ups are different, there are challenges most entrepreneurs share and key areas they should focus on.

Shawn and Desigan share the top five areas you should focus on.

1. Align and partner with the right people

This includes your staff, stakeholders, partners, suppliers and clients. Partnerships are the best thing to take you forward. The key is to collaborate and partner with the right people based on an alignment of objectives and culture. It’s when you don’t tick all the boxes that things don’t work out.

2. Make sure you get the basics right

Never neglect business fundamentals. Do you have the processes and systems in place to scale the business?

3. Understand your value proposition

Are you on a journey with your clients? Is your value proposition aligned to the need you’re trying to solve for your clients? Are you looking ahead of the curve — what’s the problem, what are your clients saying and are you being proactive in leveraging that relationship?

Related: Want To Start A Property Business That Buys Property And Rents It Out?

4. Unpack your value chain

If you want to diversify, understand your value chain. What is it, where are the opportunities both horizontally and vertically within your client base, and what other solutions can you offer based on your areas of expertise?

8. Don’t ignore technology

Be aware of what’s happening in the tech space and where you can use it to enable your business. Tech impacts everything, even more traditional industries. Businesses that embrace technology work smarter, faster and often at a lower cost base.

Ultimately, Desigan and Shawn believe that success often just comes down to attitude. “We have one entrepreneur in our programme who applied twice,” says Shawn. “When he was rejected, he listened to the feedback we gave him and instead of thinking we were wrong, went away, made changes and came back. He was willing to learn and open himself up to different ways of approaching things. That business has grown from R300 000 per annum to R20 million since joining us.

“Too many business owners aren’t willing to evaluate and adjust how they do things. It’s those who want to learn and embrace change and growth that excel.”

Networking, collaborating and mentoring

Property Point holds regular networking sessions called Entrepreneurship To The Point. They are open to the public and have two core aims. First, to provide entrepreneurs access to top speakers and entrepreneurs, and second, to give like-minded business owners an opportunity to network and possibly even collaborate.

“We believe in the power of collaboration and networking,” says Desigan.

“Most of our alumni become mentors themselves to new entrants to the programme. They want to share what they have learnt with other entrepreneurs, but they also know that they can learn from newer and younger entrepreneurs. The business landscape is always changing. Insights can come from anywhere and everywhere.”

The To The Point sessions are designed to help business owners widen their network, whether they are Property Point entrepreneurs or not.

To find out more, visit www.ettp.co.za

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Entrepreneur Profiles

Bain & Company Give You The Data On How To Become 40% More Productive

Top performing organisations get more done by 10am on a Thursday than most companies achieve in a full week. They don’t have more talented employees than everyone else though — they’re working with the same people and tools as you. Michael Mankins unpacks what separates these businesses from everyone else, and how you can learn to be more like them.

Nadine Todd

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Vital Stats

“Engaged employees are 45% more productive than satisfied employees. An inspired employee is 55% more productive than an engaged employee and 125% more productive than a satisfied employee.”

When Bain & Company partner, Michael Mankins evaluates businesses, he clearly distinguishes between efficiency and productivity. Efficiency is producing the same amount with less — in other words, finding and eliminating wastages. Productivity, on the other hand, is producing more with the same, which requires an increased output per unit of input and removing obstacles to productivity.

Interestingly, when businesses face challenges or tough operating conditions, the first response is always to become more efficient, instead of more productive. Restructuring and ‘rightsizing’ are the result. The problem, says Michael, is that when companies take people out, they don’t take the work out, and so the people end up coming back, along with the costs.

A better response, he says, is to identify the work that could be removed to free up time, which could then be invested in producing higher levels of output.

While businesses have become very good at tracking the productivity levels of blue-collar and manufacturing workers, tracking the productivity of knowledge workers is entirely different.

“There’s no data around white-collar productivity,” says Michael. “The problem is that the world is shifting towards knowledge work, and so, if we can’t measure productivity, output and obstacles in that space, businesses will never get the great levels of performance they’re looking for.”

Because of a complete lack of statistics in this area, when Michael and his colleague, Eric Garton, were approached by Harvard Business Review Press to write a book dealing with this issue, they had to devise a way of looking at the relative productivity of organisations comprised of white-collar workers.

The results were unexpected. “We were asked to research the difference between top performing organisations (the top quartile) compared to average organisations. I honestly thought the answers would be obvious, even if we didn’t yet have the tools to track them. I thought the best companies would have the best people. That’s 90% of the answer. Simple as that.”

As it turned out, it wasn’t that simple at all. Of the 308 organisations in the study, drawn from a global pool, the average star performer or A-player was one in seven employees. This statistic held true whether the company was in the top 25% of performers or an average performer. The difference was that the top performing businesses were 40% more productive than their counterparts — and yet their mix of talent, on average, was the same.

“There were some exceptions, but on the whole, the best in our research accomplishes as much by 10am on a Thursday as the rest do the whole week. And they continue to innovate, serve customers and execute on great ideas — all with the same percentage of A-players as other, more mediocre businesses.”

Related: (Slideshow) Top Advice From Local Entrepreneurs That Will Change Your Business In 2019

So, what were the differentiating factors?

What’s dragging your organisation down?

First, we need to understand how Michael and Eric approached their research before we can understand — and implement — their conclusions.

“We began with the notion that every company starts with the ability to produce 100 if they have a workforce that’s comprised of average talent, that’s reasonably satisfied with their job and can dedicate 100% of their time to productivity — bearing in mind that no-one can dedicate 100% of their time to productive tasks.

“The question we were focusing on was around bureaucratic procedures, complex processes and anything else that wastes time and gets in the way of people getting things done, but doesn’t lead to higher quality output or better service to customers. That’s what we call organisational drag. You start at 100 and then the organisation drags you down. The good news is that you can make up for organisational drag in three ways: First, you can make better use of everyone’s time. Second, you can manage your talent better by deploying it in smarter ways, which includes placing it in the right roles, teaming it more effectively and leading it more effectively. Third, you can unleash the discretionary energy of your workforce by engaging them more effectively.”

This trifecta — time, talent and energy — became the basis for Michael and Eric’s book, Time, Talent, Energy: Overcome Organizational Drag & Unleash Your Team’s Productive Power. “The way you manage the scarce resource of talent can make up for some, potentially even all, of what you lose to organisational drag,” says Michael.

What the research revealed: Time

time-management-productivity

“Wasted time is not an individual problem,” says Michael. “It’s an organisational problem. The symptoms include excess emails and meetings and far more reports being generated than the business needs to operate.”

These are all manifestations of an underlying pathology of organisational complexity, which is managed by senior leadership. “The best companies lose about 13% of their productive activity to organisational drag. The rest lose 25%. The most important thing is to reduce the number of unnecessary interactions that workers are having. That means meetings and ecommunications need to be relooked.”

The easiest manifestation for Michael and Eric to observe were hours committed to meetings and how much time workers spend dealing with ecommunications. What’s left-over is the time people can actually get some work done.

What they found is that the average mid-level manager works 46 hours a week. 23 hours are dedicated to meetings and another ten hours to ecommunication. That leaves 13 hours to get some work done — except that it doesn’t.

“It’s difficult to do deep work in periods of time less than 20 minutes. When we subtracted all the other distractions that happen daily, we were left with just six and a half hours each week to do work.” What’s even scarier about this statistic is the fact that meeting work and ecommunication time is increasing by 7% to 8% each year and doubles every nine years. If left unchecked, no-one will have the time to get any work done. “This is why everyone plays catch-up after hours and on weekends,” says Michael.

“One of my clients told me that his most productive meeting is at 6.30am on a Saturday, because it doesn’t involve one minute that isn’t required or one individual that doesn’t absolutely need to be there. If the same meeting was held at 2pm on a Tuesday, there’d be twice as many people, it would be twice as long and there’d probably be biscuits.”

The point is clear: We don’t treat time as the precious resource that it is, and if we did, we would radically shift our behaviour.

Start by asking what work needs to be done and then figure out the best structure to do that work. “Don’t confuse having a lean structure that does the wrong work with being effective,” says Michael. “One of the biggest problems we see is that companies are not particularly good at stopping things. Things get added incrementally, but nothing ever gets taken away. For example, we found that 62% of the reports generated by one of our clients had a producer — but no consumer. Time, attention and energy was invested in reports that no one needed and no one read.

“Ask yourself: How many initiatives have you shut down? If you made the decision that you could only do ten initiatives effectively, and each time you added an initiative, one had to be eliminated, what would your organisation look like?

“Unless you routinely clean your house, it gets cluttered. The same is true of companies. Initiatives spawn meetings, ecommunications and reports, which all lead to organisational drag.”

What the research revealed: Talent

According to Michael, the biggest element in their research that explained the 40% differential in productivity is the way that top performing organisations manage talent.

“We conducted research in 2017 that revealed the productivity difference between the best workers and average employees. Everyone knows that A-level talent can make a big difference to an organisation’s performance, but not everyone knows just how big that difference is.”

To put it in context, the top developer at Apple writes nine times more usable code than the average software developer in Silicon Valley. The best blackjack dealer at Caesars Palace in Las Vegas keeps his table playing at least five times as long as the average dealer on the Strip. The best sales associate at Nordstrom sells at least eight times as much as the average sales associate walking the floor at other department stores. The best transplant surgeon at Cleveland Clinic has a patient survival rate at least six times longer than that of the average transplant surgeon. And the best fish butcher at Le Bernadin restaurant in New York can portion as much fish in an hour as the average prep cook can manage in three hours.

It doesn’t matter what industry you investigate, A-level talent is exponentially more productive than everyone else.

This is why Michael thought that the obvious answer to why some organisations perform better than others is the mix of talented employees they’ve attracted.

“When we asked senior leaders to estimate the percentage of their workforce that they would classify as top performers or A-level talent, the average response was slightly less than 15%. And that’s despite the fact that most companies have spent vast sums of money in the so-called war for talent.”

The big difference, as Michael and Eric discovered, is how that talent is deployed. “It’s what they do with that one in seven employees that makes the biggest difference,” says Michael. “Most companies use a model called unintentional egalitarianism, which basically means that they spread star talent across all roles. The best on the other hand, are more likely to deploy intentional non-egalitarianism. They ensure that business-critical roles are held by A-level talent.”

The challenge is that approximately 5% of the roles in most companies explain 95% of a company’s ability to execute its strategy, and very few organisations articulate which roles those are — but the ones that do tend to be top performers.

“There’s an excellent historical example of this at work,” says Michael. “Between 1988 and 1994, Gap was a high-flyer in the retail sector. They performed globally on all levels — they grew faster than anyone else, were more profitable, had higher shareholder returns, and were the most admired company.

“During that time period, the organisation was led by Mickey Drexler, and his strategy was to focus on what he believed was Gap’s critical role, which was merchandising. He wanted every merchandiser to be a star. ‘No one will tell us what the colour is this year — we’re going to tell the world. We’re going to determine which styles are in and what everyone will be wearing.’

“And they did. If you want proof that Gap’s merchandisers were in fact stars during that period, you can look at today’s CEOs and COOs of the world’s largest retailers. Most of them were merchandisers at Gap during those years.”

The challenge of course is that everyone is always trying to hire stars, and yet only 15% of employees can be described as A-level talent. What can organisations do to utilise their stars wisely?

“First, move a star into a different position if they’re not in a business-critical role. To achieve this, how you define a star might have to change. Some companies hire for positions, and others hire for skills across positions. Stars, in my view, are more the latter. They can learn different skills and fill different roles.

“Second, start defining your business-critical roles. If you ask executives what percentage of their roles are business critical, most say 54%. They’re not discerning. It’s unintentional, because they don’t want to signal to their workers who aren’t in a business-critical role that they’re not as valuable to the organisation, but the reality is that people figure it out anyway, and you just end up with business-critical roles that aren’t filled by the right people, and stars in positions that anyone else could fill.”

Related: Entrepreneur Erik Kruger On The Importance Of Clarity And Embracing Failure

Teams perform better than individuals

To understand how important teams are when deploying talent, Michael uses an example from the world of racing — Nascar in the US to be precise.

“Between 2008 and 2011, there was one pit crew that outperformed everyone else on the track,” he says. “A standard pit stop is 77 manoeuvres, and this crew could complete them in 12,12 seconds, which was faster than any other team. However, if you took one team member out and substituted them with an average team member, that time jumped to 23 seconds. Substitute a second team member, and it was now 45 seconds. The lesson is simple: As the percentage of star players on a team goes up, the productivity of that team goes up — and it’s not linear.”

Michael and Eric also discovered that the role leadership plays on team productivity is both measurable and exponential.

“In 2011, the National Bureau of Economic Research wanted to quantify the impact of a great boss on team productivity. They found that a great boss can increase the productivity of an average team by 11%, which is the same as adding another member to a nine-member team.

“If you take that same boss and put them in charge of an all-star team, productivity is increased by 18%, and this is with a team whose productivity was exponentially higher to begin with. Great bosses act as a force multiplier on the force multiplier of all-star teams.”

According to Michael and Eric’s research however, what most organisations tend to do is place a great boss with an under-performing team in the hopes of improving them, when what they should be doing is pairing great bosses with great teams.

“We did a survey that asked a simple question: When your company has a mission-critical initiative, how do you assemble the team? A: Based on whomever is available. B: Based on perceived subject matter expertise. C: We attempt to create balanced teams of A, B and C players to foster the development of the team. D: We create all-star teams and we put our best leaders in charge of them.

“We thought everyone would answer D. We were wrong. 30% of our bottom three quartiles answered B, closely followed by C, and then A. Only 8% of them answered D.

“The results were very different in our top-performing quartile though. There, 81% of respondents answered D. In other words, the 25% most productive companies in our study set were ten times more likely to assemble all-star teams with their best players than the remaining 75% of the organisations in our research.”

How talent is deployed makes a difference. “I recently had this highlighted for me through another sporting analogy. The world record for the 400-metre relay is faster than the 100-metre dash multiplied four times. How is that possible? When your role is clear and your position is clear, the handoff is seamless. Under these conditions, the best teams outperform a collection of the best individuals.” Michael does offer a word of advice though.

“Don’t fall into the trap of believing that if you do have the best talent, you don’t need to worry about anything else. I don’t believe that’s true. There are always higher levels of performance that can be achieved because there are always areas you can improve on.”

What the research reveals: Energy

According to Michael, employee engagement and inspiration is a hierarchy. “There are a set of qualifiers that have to be met just to feel satisfied in your job: You need to feel safe, have the resources you need, feel that you’re relatively unencumbered in getting your job done every day and that you’re rewarded fairly.

“To be engaged, these all need to meet, and more. Now you also need to feel part of a team, that you’re learning on the job, that you’re having an impact and that you have a level of autonomy.”

Inspiration takes this a step further. “Inspired employees either have a personal mission that is so aligned with the company’s mission that they’re inspired to come to work every day, or the leadership of their immediate supervisors is incredibly inspiring, or both.”

Why does this matter? Because how satisfied, engaged or inspired your employees are has a real, tangible impact on productivity. “Engaged employees are 45% more productive than satisfied employees. An inspired employee is 55% more productive than an engaged employee and 125% more productive than a satisfied employee.”

The really scary statistic is that 66% of all employees are only satisfied or even dissatisfied with their jobs, 21% are engaged, and only 13% are inspired. “These statistics are pretty constant, although top organisations can improve their engaged and inspired ratios,” says Michael. “What we found amongst those companies that did have more engaged and inspired workers was that they all tended to believe that inspiration can be taught. It’s not innate. You can become an inspirational leader with the right attitude and training.

“For example, one organisation surveys its employees every six months and specifically asks workers to rate how inspirational their leaders are. If you’re rated uninspiring by your team for the first time, you’re given training. If, six months later, you’re still rated uninspiring, you’re given access to a coach to evaluate why the tools aren’t working for you.

“By the third, two questions are asked: Should you be a leader, and should you be at the company? Many productive employees can be effective individual contributors but aren’t necessarily leaders, or aren’t happy as leaders, and would best serve the organisation in a different role. The second question is tougher, but even more important. If an inspired employee is 55% more productive than an engaged employee and 125% more than a satisfied employee, an uninspiring leader is a tax on the performance of the company, and there has to be a consequence to that. We have to constantly enrich our workforce and leaders need to be included in that.”

The problem is that very few organisations are asking how inspiring their leaders are. “If you don’t know if your employees are engaged or if your leadership is inspiring, you can’t address it,” he says. “You can take a satisfied employee and make them engaged, but you can’t inspire someone if they aren’t first engaged — that’s the hierarchy. Employee engagement is largely achieved through the way you manage teams. You have to give people the sense that they are having an impact, working within a team and learning. Get that right, and you’ll unlock a powerful level of discretionary energy that will drive productivity in your organisation.”

Related: How Yoco Successfully Secured Capital And The Importance Of A Pitch

Time, Talent, Energy: Overcome Organizational Drag and Unleash Your Team’s Productive Power, by Michael Mankins and Eric Garton, focuses on the scarcest resource companies possess — talent — and how it can be utilised to drive productivity.

Visit www.timetalentenergy.com to find out more.

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Entrepreneur Profiles

7 Foundational Values Of Brand Cartel And How They Grew an Iconic Business From The Ground Up

Marco Ferreira, Renate Albrecht and Dillon Warren built Brand Cartel, a through-the-line agency, that delivers exactly what they wanted — and has grown exponentially as a result.

Nadine Todd

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brand-cartel

Vital Stats

  • Players: Marco Ferreira, Renate Albrecht and Dillon Warren
  • Company: Brand Cartel
  • Launched: 2013
  • Visit: brandcartel.co.za

“We’d never worked at agencies, which meant we had no idea how much you need to run an agency. We grew into it. It’s made us really good at what we do.”

When Dillon Warren, Renate Albrecht and Marco Ferreira launched Brand Cartel in 2013 they were in their early 20s with zero agency experience between them. The idea had started when Marco recognised that social media was taking off, but no agencies were playing in that space yet. It was a clear opportunity.

Printing flyers that said ‘Your social media is so last season’, Marco and Renate went from store to store in Sandton City, pitching their services. When Dillon joined them a few months later because they needed someone to handle the company’s finances, they had two laptops between them, R6 000, which Dillon had earned from a Ricoffy advert, and sheer will and tenacity.

“We shared a house to save on rent and split everything three ways,” says Renate. “At one point we hadn’t eaten in two days. My mom lent me R500 so I could buy Futurelife and a bag of apples for the three of us.”

The trio hired their first employee soon after launching Brand Cartel, and after prioritising salaries and bills, there wasn’t much leftover. “Dillon actually paid us R67 each one month,” laughs Marco. “That’s what was left — although I still can’t believe he actually sent it to us.” It was at this point that the young business owners realised they needed credit cards if they were going to make it through their start-up phase — not an easy feat when your bank balance is under R100.

Related: What Comfort Zones? Get Comfortable With Being Uncomfortable Says Co-Founder Of Curlec: Zac Liew

“Looking back, those days really taught us the value of money,” says Dillon

We spent a lot of time with very little, and we’re still careful with money today.” Through it all though, the partners kept their focus on building their business. “It almost didn’t work for a long time. We were young and naïve, but in a way, that was our strength. We didn’t have any responsibilities, and we’d never worked at agencies, which meant we had no idea how much you need to run an agency. We grew into it. It’s made us really good at what we do. All of our business has been referral business. It takes time, but we focused on being the best we could be and giving everything we had to our clients. Our differentiator was that we really cared, and were willing to offer any solutions as long as they aligned with our values.”

This is how Brand Cartel has grown from a social media agency into PR and Media Buying, SEO and PPC Strategy, Digital and Print Design, Web Development, Campaign Strategy and now an Influencer division. “It’s an incredibly competitive space with low barriers to entry, which meant it was easy to launch, but tougher to build a client base,” says Renate. “I’d sometimes cry in my car between sales pitches, and then walk in smiling. We had no idea if we’d make it.”

The perseverance has paid off though. Strong foundations have laid the groundwork for exponential growth over the past year, with turnover growing almost ten-fold in 2017 thanks to relationship-building, strong referrals and fostering an internal culture and set of values that has driven the business to new heights as a team.

Like many start-ups, Renate, Dillon and Marco have made their fair share of hiring mistakes, but as the business grew and matured, the young entrepreneurs began to realise that the success of their business lay in the quality of their team and the values they stood for.

This meant two things: Those values needed to be formalised so that they could permeate everything Brand Cartel does, and they needed a team that lived, breathed and believed in them.

“We’ve had some nasty experiences,” admits Dillon. “You should always hire slowly and fire fast, and for five years we did the opposite. We’ve hired incredible people, but we’ve also ended up with individuals who didn’t align with our values at all, and that can destroy your culture.

Dillon, Marco and Renate realised they needed to put their values on paper. “We did an exercise and actually plotted people based on a score grading them against our values, so we knew where our issues were. We knew what we wanted to stand for, and who was aligned with those values. We were right; within a few weeks resignations came in and we mutually parted ways.”

The team that stayed was different. They embraced Brand Cartel’s values, and more importantly, it gave the partners a hiring blueprint going forward.

“Values are intangibles that you somehow need to make real, so it’s important to think about the language you use, and how they can be used in a real-world work context,” says Marco.

The team has done this in a number of ways. First, they chose ‘value phrases’ that can be used in conversation, for example, ‘check it, don’t wreck it’, and ‘are you wagging your tail?’ Team members can gently remind each other of the value system and focus everyone on a task at hand simply by referring to the company’s values. “In addition, when someone is not behaving according to those values, you can call them out on the value, which is an external thing, rather than calling them out personally,” explains Dillon.

Related: How Matthew Piper And Karidas Tshintsholo Launched Their First Business From Their UCT Dorm Rooms

Second, all performance reviews are based on the values first. This means everyone in the organisation begins any interaction from a place of trust, knowing they are operating according to the same value system.

“When you’re in a production environment with jobs moving through a pipeline, there can be problems and delays,” explains Marco. “Instead of pointing fingers when something is over deadline or a mistake is made, our team can give each other the benefit of the doubt and work together. They trust each other, which creates cohesion. We all work as a team, which impacts the quality of our work and the service we offer our clients.”

The system is simple. Coaches will step in first if there is an issue before it escalates to the Head of Team Experience, Nicole Lambrou. If Nicole is called in, she will address the problem head on. “Inevitably it’s something fixable,” says Marco. “By addressing it immediately and in the context of our values it can be sorted out quickly. Ultimately, the overall quality of our team improves, and we are a more cohesive unit.”

The founders have seen this in action. “I recently arrived at a client event and three different people came up to me and complimented my team on the same things — all of which aligned with our values. Everyone at Brand Cartel lives them, internally and externally,” says Renate.

The value system has also shaped how the team hires new employees. “We used to meet people and hire for the position if they could do the job,” says Renate. “But then we started realising that anyone can hold up for an hour or two in an interview. You only learn who they really are three months and one day later.

“We need people who walk the talk, and we really only had a proper measurement of that once we articulated our values. Our interview style has changed, but so has what we look for.”

brand-cartel-south-african-agency

Here are the seven values that Dillon, Marco and Renate developed based on what they want their business to look like, how they want it to operate, and what they want to achieve, both internally, and in the market place.

1. Play with your work

Our goal is for everyone on our team to become so good at what they do that it’s no longer work. Once that happens you love your job because you’re killing it. It’s why sportsmen are called players, not workers, and it starts with the right mindset.

2. Wag your tail

The idea behind this value stems from Dale Carnegie, who said ‘have you ever met a Labrador you don’t like?’ In other words, we all respond well to people who are friendly. It needs to be genuine though, so again, it’s a mindset that you need to embrace.

We live these values whether we’re at the office or meeting clients. If you go into each and every situation with joy and excitement, from meeting someone new to a new brief coming in, you’ll be motivated and excited — and so will everyone around you.

3. Check it, don’t wreck it

The little things can make big differences. Previously it was too easy to pass the buck, which meant mistakes could — and did — happen. Once you instil a sense of ownership and create a space where people are comfortable admitting to a mistake however, two things happen. First, things get checked and caught before there’s a problem. Second, people will own up if something goes wrong. This can help avoid disasters, but it also leads to learnings, and the same thing not happening again.

4. What’s Plan B (aka make it happen)

We don’t want to hear about the problem; come to us with solutions, or better yet, already have solved the problem and made it happen. We reached a point where we had too many people coming to us with every small problem they encountered, or telling us that something wasn’t working so they just didn’t do it.

That wasn’t the way we operated, and it definitely wasn’t the way we wanted our company to operate. We also didn’t want to be spoon feeding our team. It’s normal for things to go wrong and problems to creep in — success lies in how those problems are handled.

Ignoring problems doesn’t make them go away, so we embrace them instead, encouraging everyone on our team to continuously look for solutions. For example, the PR department holds a ‘keep the paw-paw at Fruit & Veg City’ meeting every morning, where we deliberately look for where problems might arise so that we can handle them before they do. We start with what’s going wrong and then move to what’s going right. You need to give your team a safe and transparent space to air problems though. We don’t escalate. We need to know issues so that we can collectively fix them, not to find fault.

Related: The 5-Hour Rule Used By Bill Gates, Jack Ma And Elon Musk

5. Put your name to it

It’s about pride in work and making it your own. When someone has pride in what they’re doing, they’ll not only put in extra time and effort, but they’ll pull out all the stops to make their creative pop, or go the extra mile for a client.

We need to find the balance between great quality work and fast output though. One way we’ve achieved this is by everyone reviewing the client brief and then committing to how long their portion will take.

When someone gives an upfront commitment, they immediately take ownership of the job. It took time for us to find our groove with this, but today we can really see the difference. Our creative coaches also keep a close eye on time sheets and where everyone is in relation to the job as a whole to keep the entire brief on track. If someone is heading towards overtime we can immediately ask if something is wrong and if they need assistance.

We also celebrate everything that leaves our studio. Every morning we have a mandatory 15-minute catch up session where we check in on four core things: How am I feeling (which allows us to pick up on the mood in the room and the pressure levels of our teams); What’s the most important thing I did yesterday; What’s the most important thing I’m going to do today (both of which give intention and accountability); and ‘stucks’, issues that team members need help with. We then end off with our achievements so that we can celebrate them together.

6. Keep it real (aka check your ego at the door)

We believe in transparency. At the end of the day we’re all people trying to achieve the same thing, but it’s easy for ego to creep in — especially when things go wrong. You can’t be ego-driven and solutions-orientated. If clients or team members are having a bad day, you need to be able to focus on the solution. Take ego away and you can do just that. It’s how we deal with stucks as well. We can call each other out and say, ‘I’m waiting for you and can’t do my job until I receive what you owe me,’ and instead of getting a negative, ego-driven reaction, a colleague will say, ‘sorry, I’m on it.’

7. Walk the talk

For us, ‘walk the talk’ really pulls all our other values together. It’s about being realistic and communicating with each other. If you’ve made a mistake or run into a problem, tell your client. Don’t go silent while you try and fix it. Let them know what’s happening and fill them in on your plan of action.

Walk the talk also deals with the industry you’re in. For example, if you’re a publicist, you need to dress like a publicist, talk like a publicist, and live your craft. In everything we do, we keep this top of mind.

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