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Saab Grintek Defence’s Strategies For Staying Lean and Competitive

Saab Grintek Defence has seen incredibly impressive growth over the last few years, all while operating in a tough market that is global in scale and heavily regulated. CEO Trevor Raman explains how the company navigates this complex environment.

GG van Rooyen

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Trevor Raman

Vital Stats

  • Player: Trevor Raman
  • Position: CEO
  • Company: Saab Grintek Defence
  • Turnover: R1,5 billion
  • Visit: www.saab.com and www.saabgrintek.com
  • About: Saab Grintek Defence South Africa is a leading defence, civil security and telecommunications company.

Trevor Raman started as CEO of Saab Grintek Defence (SGD) in March 2016. When he took over, SGD was already looking strong, having solidified its position through some key acquisitions over the last few years.

But that does not mean that Raman’s job is easy. SGD operates across some very competitive industries where price is not only crucial, but constant innovation is also a necessity. Then there’s the issue of regulation. When you’re dealing with defence, civil security and telecommunications, it goes without saying that you’ll be dealing with some strict rules and parameters.

How do you handle all of these challenges successfully? Entrepreneur spoke to him about his approach to leading such a large and complex operation.

Related: 6 Strategies From Cool Ideas To Carve Out A Market In A Competitive Environment

How do you stay competitive on a global stage and with tough competition?

You must invest in research and development — it’s an absolute non-negotiable. We spend about 10% of our income on R&D and 15% on product development. This is obviously much easier to do when things are going well, but we still view it as a necessity when markets are down.

It’s often tempting to trim back those budgets during lean times, but that’s a mistake. Sure, you can save some money in the short-term, but you can also irreparably damage your organisation’s ability to compete.

We live in a world of constant innovation, and if you allow yourself to fall behind, you might never catch up again.

What are some of SGD’s biggest barriers to growth?

Well, R&D investment can reduce bottom-line growth in the short-term, but I believe that it leads to more sustainable long-term growth. That said, you need working capital if you’re going to grow successfully. If your expansion plans are very aggressive and you don’t have the capital to back them up, you can run into trouble.

Regulations are another barrier, though these are largely just a reality of the industries we operate in. Also, we have the added obstacle of having to abide by both South African regulations and those of Saab’s home country, Sweden.

Our biggest barrier, however, is a lack of skilled workers. SGD requires very specific high-end skills, and these skills are quite scarce. It’s a global problem, but it’s a severe issue in South Africa. We struggle to find people with the necessary skills and experience.

Related: This Young Intern Is Light Years Ahead Of Some Older Entrepreneurial Peers. Here’s Why

We’ve tackled the problem by creating close relationships with centres of excellence around the country, like universities and other tertiary institutions. As a large industry player, we view it as our responsibility to help develop these skills, so we’re creating programmes in niche fields like avionics with the help of these partners.

We also prioritise in-house training. Even if you employ great people with excellent skills, it’s important to prioritise training. You always want to strive for improvement, both on the individual and organisational level.

How do you stay lean and competitive?

Large companies often struggle to remain proactive and agile, which can result in an unnecessary loss of opportunities.

Saab Grintek Defence

You can’t be too careful or risk-averse, and this extends to the whole organisation. Employees should have the power and courage to make decisions. In other words, the authority to take risks should be delegated to people in the company.

If every decision has to pass through too many layers within the organisation, you end up missing out on opportunities, so you have to allow employees and divisions to take risks. That doesn’t mean that the company should be reckless or have too big an appetite for risk.

The decision-making process should be well documented and carefully discussed by the key people involved, but at the end of the day, employees should be empowered to make a decision before a chance is lost. If it all becomes overly bureaucratic, sales and productivity will suffer.

The key is just to make sure everyone stays accountable, while also maintaining a sense of urgency. Measuring performance is important — things like sales and internal deliveries.

How do you implement systems and processes that make an organisation productive and successful?

As a company grows, systems and processes become essential, since they provide some sort of commonality. You need your entire operation to run on the same IT and financial systems, for instance.

However, systems and processes should empower, they shouldn’t make it harder to do business. You need to do your research and make sure that anything new you implement is necessary and beneficial to the operation. Once you’re sure it’s worth investing in, you need to clearly communicate the reasoning behind the change to all the people in your company.

You need buy-in from your people, and you can only get that if you explain why a change is needed. In my experience, you also don’t want the subject-matter experts to be the champions of a system or process change.

You want some of the users — the people who will be impacted daily — to be the champions. They should see that their work has actually become easier, and that should motivate them to champion the change.

Related: How An Accidental Entrepreneur Founded A R175 Million Business

If you find it hard to get buy-in across the organisation, you should investigate the reasons behind this. Why are people being resistant? Is the change really making a positive impact on the company?

It should also be mentioned that implementing great systems and processes is never cheap. It requires money. We have an IT system that allows our employees to easily work across the globe. They can work remotely, and they can also be up and running in seconds when they visit a foreign office.

Putting this sort of system in place across an international organisation is expensive, but you need to weigh that against the boost in productivity. Solid systems and processes improve the speed and agility of an organisation, which ultimately translates into less missed opportunities.

What is your approach when it comes to the challenges SGD encounters?

When it comes to challenges, we try to reframe them and instead view them as opportunities. This is something that we try to instil in people across the organisation, since we think it can have a profound impact on the success of the company.

The easiest way to explain our approach is with the help of a real-world example. One of our partners recently requested that we reduce our lead time to market from 12 months to eight months. This obviously seems like a massive challenge at first, but once you consider the potential consequences of it, your view starts to shift.

What would be the impact on our ability to compete and turn a profit if we succeeded in shortening our lead time so significantly? We would spend less time on production, we would be more agile and our margins would be bigger.

Suddenly, you’re viewing it not as a challenge, but as an opportunity that should be grabbed. And once you have that perspective, you generally start coming up with solutions that you probably wouldn’t have found if you were only looking at the situation purely as a challenge.

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Entrepreneur Profiles

6 Lesson Gems From Appanna Ganapathy That Helped Him Launch A High-Growth Start-Up

Twenty years after first wanting to own a business, Appanna Ganapathy launched ART Technologies, a business he aims to grow throughout Africa, starting with Kenya thanks to a recently signed deal with Seacom. As a high-growth entrepreneur with big plans, Appanna spent two decades laying the foundations of success — and now he’s starting to collect.

Nadine Todd

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appanna-ganapathy

Vital Stats

Like many entrepreneurs before him, Appanna Ganapathy hadn’t even finished school and he was already thinking about his first business venture. A friend could secure the licensing rights to open Nando’s franchises in Mozambique, and they were very keen on the idea — which Appanna’s mom quickly dampened. “You can do whatever you want,” she said. “As long as you finish your degree first.”

Unlike many other entrepreneurs however, Appanna not only finished his degree, but realised that he had a lot of skills he needed to develop and lessons to learn before he’d be ready to launch the business he wanted.

“We launched ART Technologies just over two years ago. If I had started any earlier, I don’t think I would have been as successful as I am now,” he says.

Here are six key lessons that Appanna has learnt along his journey, which have allowed him to launch a high-growth start-up that is positioned to make an impact across Africa.

1. You don’t just need a product – you need clients as well

Business success is the ability to design and execute a great product and solution, and then be able to sell it. Without sales, there is no business. This is a lesson Appanna learnt while he was still at university.

“I was drawn to computers. I loved figuring out how they worked, playing computer games — everything about them,” he says. “My parents lived in Mozambique, and during my holidays I’d visit them and a friend who had a computer business. I helped him assemble them and thought I could do this too while I was studying. I convinced my dad to buy me a car so that I could set up my business — and never sold or assembled a single computer. I delivered pizzas instead.”

So, what went wrong? The simple truth was that at the time Appanna had the technical skills to build computers, but he lacked the ability to sell his product.

“If someone had said, ‘I’ve got an order for 30 computers’, I would have filled it — but to go out and get that order — I didn’t really even know where to start.”

2. Price and solution go hand-in-hand

As much as you need the ability to sell your solution, you also need a market that wants and needs what you’re offering, at a price point that works for everyone.

In 2007, Appanna was approached by a former supplier whom he had worked with while he was based in Mozambique. The supplier had an IT firm and he wanted to expand into South Africa. He was looking for a local partner who would purchase equity shares in the company and run the South African business.

“I loved the opportunity. This was something I could build from the ground up, in an area I understood well,” says Appanna. The firm set up and managed IT infrastructure for SMEs. The value proposition was simple: “We could offer SMEs a service that they could use for a relatively low cost, but that gave them everything an enterprise would have.”

The problem was that although Appanna and his team knew they had a great product, they were competing on price with inferior products. “If we couldn’t adequately unpack the value of our solution, an SME would choose the cheaper option. It was a big lesson for me to learn. It doesn’t matter how good the solution is that you’re offering — if it’s not at a price point that your target market accepts, they won’t choose you.”

It was this understanding that helped Appanna and his team develop the Desktop-as-a-Service solution that ART Technologies now offers the SME market.

“While I was developing the idea and the solution, I needed to take three key things into account: What do SMEs need from an IT infrastructure perspective, what is the most cost-effective way to offer them that solution, and what will the market pay (and is it enough to cover our costs and give us a small profit margin)?”

Appanna’s experience in the market had already taught him how cost-conscious SMEs are, and so he started developing a solution that could deliver value at a price point SMEs could accept. His solution? A unique Desktop-as-a-Service product that combines all the processing power and Microsoft products a business needs, without any capex outlay for servers or software.

“It’s a Cloud workstation that turns any device into a full Windows computer,” Appanna explains. “We hold the licences, and our clients just access our service. A set-up that would cost between R180 000 and R200 000 for 15 users is now available for R479 per user per month.”

It took Appanna and his partners time to build the solution, but they started with the price point in mind, which meant a solution could be designed that met their needs as well as the needs of the market.

“Too many businesses set everything up, invest in the solution, and then discover they can’t sell their product at the price point they need. My time in the market selling IT and infrastructure solutions gave me invaluable insights into what we needed to deliver on, and what we could realistically charge for our service.”

3. Get as much on-the-ground experience as you can

appanna-ganapathy-art-technologies

The time that Appanna spent building the IT firm he was a part-owner of was invaluable. “I started as a technical director before being promoted to GM and running the company for three and a half years. Those years were very, very important for me. They’re where I learnt everything about running a business.

“When I started, I was responsible for sales, but I didn’t have to actually go out and find clients, I just had to meet them, compile quotes and handle the installations. Everything I did was under the guidance of the company’s CEO, who was based in Mozambique. Being the guy who did everything was the best learning ground for me. It set me up for everything I’m doing today. In particular, I learnt how to approach and deal with people. Without people and clients your business is nothing.”

Appanna didn’t just learn by default — he actively worked to expand his understanding of all facets of the business. “At the time I wasn’t planning on leaving to launch my own business,” he says. “I was a shareholder and I wanted to grow that business. That meant understanding as much as possible about how everything worked. If there was something I wasn’t sure of — a process, the numbers, how something worked — I asked. I took personal responsibility for any errors and got involved in every aspect of the business, including areas that weren’t officially ‘my job’. I wanted to really grow and support the business.”

4. Stay focused

Interestingly, while the experience Appanna has accumulated throughout his career has allowed him to build a high-growth start-up, it also taught him the importance of not wearing too many hats as an entrepreneur.

“I’m glad I’ve had the experience of wearing multiple hats, because I’ve learnt so much, but I’ve also learnt that it’s important to pick a lane, not only in what you do as a business, but in the role you play within your business. I also race superbikes in the South African Kawasaki ZX-10 Cup; through this I have learnt how important it is to focus in the moment without distractions and this is a discipline I have brought into the business.”

“If you’re the leader of an organisation, you need to let things go. You can’t be everything to everyone. When I launched ART Technologies, I knew the key to growth would be the fact that although I’m technical, I wasn’t going to run the technical side of the business. I have strong technical partners whom I trust, and there is an escalation framework in place, from tech, to tech manager, to the CTO to me — I speak tech and I’m available, but my focus is on strategy and growth. I believe this is the biggest mistake that many start-ups make. If you’re wearing all the hats, who is looking at where you’re going? When you’re down in the trenches, doing everything, it’s impossible to see the bigger picture.”

Appanna chose his partners carefully with this goal in mind.

“All the partners play a very important role in the business. Ruaan Jacobs’s strength is in the technical expertise he brings to the business and Terry Naidoo’s strength is in the support services he provides to our clients. Terry is our technical manager. He has the most incredible relationship with our customers — everyone wants to work with Terry. But there’s a problem with that too — if we want to scale this business, Terry can’t be the technical point for all of our customers.

“As partners we have decided what our blueprint for service levels will be; this is based on the way Terry deals with clients and he is developing a technical manual that doesn’t only cover the tech side of the business, but how ART Technologies engages with its customers.

“Terry’s putting his essence down on paper — a step-by-step guide to how we do business. That’s how you build a service culture.”

5. Reputation, network and experience count

Many start-ups lack three crucial things when they launch: Their founders haven’t built up a large network, they don’t have a reputation in the market, and they lack experience. All three of these things can (and should) be addressed during start-up phase, but launching with all three can give the business a valuable boost.

Appanna learnt the value of networks at a young age. Born in India, he moved to Zambia with his family as a young child. From there he moved to Tanzania and then Mozambique, attending boarding school in Swaziland and KwaZulu Natal. At each new school, he was greeted by kids who had formed strong bonds.

“I made good friends in those years, but at each new school I recognised how important strong bonds are, particularly as the outsider.”

Appanna’s early career took him back to Mozambique, working with the UN and EY on various projects. When he moved to South Africa, as a non-citizen he connected with his old boss from the UN who offered him a position as information officer for the Regional Director’s team.

His next move would be to the tech company that he would run for just over three years — also the product of previous connections. “Who you know is important, but how you conduct yourself is even more so,” says Appanna. “If your reputation in the market place is good, people will want to do business with you.”

Appanna experienced this first hand when he left to launch his own business. “Some key clients wanted to move with me,” he says. “If I had brought them in it would have settled our business, but I said no to some key customers who hadn’t been mine. I wasn’t ethically comfortable taking them with me.”

One of those multinational clients approached Appanna again six months later, stating they were taking their business out to tender and that they were hoping ART Technologies would pitch for it. “Apart from the Desktop-as-a-Service product, we also provide managed IT services for clients, particularly larger enterprise clients. Due to the client going out on tender and requesting for us to participate, we pitched for the business and won. The relationship with this client has grown, allowing us to offer them some of our services that they are currently testing to implement throughout Africa.”

“I believe how we conduct ourselves is essential. You need your own personal code of ethics, and you need to live by it. Business — particularly in our environment — is built on trust. Our customers need to trust us with their data. Your reputation is key when it comes to trust.”

Interestingly, although Appanna and his team developed their product based on a specific price point, once that trust is built and a certain standard of service is delivered, customers will pay more.

6. Start smart and start lean

Appanna was able to launch ART Technologies with the savings he and his wife, Kate, had put aside. He reached a point where he had ideas he wanted to take to market, but he couldn’t get his current business partners to agree to them — and so setting up his own business became inevitable.

Although he was fortunate to have savings to bootstrap the business, it was essential for the business to be lean and start generating income as quickly as possible. This was achieved in a number of ways.

First, Appanna and Kate agreed on a start-up figure. They would not go beyond it. “We had a budget, and the business needed to make money before that budget was reached.” The runway Appanna gave himself was only six months — highly ambitious given the 18-month runway most start-ups need. “Other than my salary we broke even in month three, which actually extended our runway a bit,” says Appanna.

Appanna had a server that he used to start with, and purchased a second, bigger server four months later. He also launched another business one month before launching ART Technologies — ART Call Management, a virtual PA services business that needed a PABX system, some call centre technology and two employees.

“I’d been playing around with the idea for a while,” says Appanna. “We were focused on SMEs, and I started noticing other challenges they faced. A lot of entrepreneurs just have their cellphones, but they aren’t answering them as businesses — it’s not professional.

“In essence we sell minutes — for R295 you get 25 incoming calls and 50 minutes of transferred calls. We answer the phone as your receptionist, transfer calls and take messages. How you use your minutes is up to you. For example, if you supply the leads, we can cold call for you. ART Technologies uses the call management business as a reception service and to do all of our cold calling. It’s kept the business lean, but it’s also brought in an income that helped us with our runway.” In 2017 ART Call Management was selected as one of the top ten in the SAGE-702 Small Business Awards.

The only problem with almost simultaneously launching two businesses is focus. “It’s incredibly important to know where you’re putting your focus,” says Appanna. “The call management business has been essential to our overall strategy, but my focus has been pulled in different directions at times, and I need to be conscious of that. The most important thing for any start-up is to know exactly where your focus lies.”


Into Africa

Thanks to a distribution deal signed locally with First Distribution, ART Technologies was introduced to Seacom, which has available infrastructure in a data centre in Kenya.

“It’s a pay-per-client model that allows us to pay Seacom a percentage of every client we sign up,” says Appanna. “First Distribution will be our sales arm. They have a webstore and resellers, and we will be opening ART Kenya with a shareholder who knows the local market.”

From there, Appanna is looking to West Africa and Mauritius. “We have the product and the relationship with Seacom gives us the foothold we need to grow into East Africa.”

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Entrepreneur Profiles

Kid Entrepreneurs Who Have Already Built Successful Businesses (And How You Can Too)

All over the world kids are abandoning the traditional notion of choosing a career to pursue until retirement. Gen Z aren’t looking to become employable job-seekers, but creative innovators as emerging business owners.

Diana Albertyn

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kid-entrepreneurs-who-have-already-built-successful-businesses-and-how-you-can-too

Do kids have an advantage or disadvantage when it comes to starting and building a company? It depends on how you look it. Juggling school, friends, family and other aspects of childhood and adolescence comes with its own requirements, but perhaps this is the best age to start.

“Being an entrepreneur means having to learn, focus, and connect to people and these are all traits that are valuable throughout life. Learning this when you are young is especially crucial, and will set you up for success and to be more open to other opportunities,” says billionaire investor, Shark Tank personality and author Mark Cuban.

Here are some of the most successful kidpreneurs who have cashed in on their hobbies, interests and needs to start and grow million dollar businesses borne from passion and innovation:

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Entrepreneur Profiles

30 Top Influential SA Business Leaders

Learn from these South African titans of industry to guide you on your entrepreneurial journey to success.

Nicole Crampton

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Entrepreneurship is said to be the answer to South Africa’s unemployment challenges and slow growth, but to foster entrepreneurship we ideally need business leaders to impact grass root efforts. Business leadership is vital to improved confidence and growth. These three titans of global industry say:

  • “As we look ahead, leaders will be those who empower others.” – Bill Gates
  • “Leaders are also expected to work harder than those who report to them and always make sure that their needs are taken care of before yours.” – Elon Musk
  • “Management is about persuading people to do things they do not want to do, while leadership is about inspiring people to do things they never thought they could.” – Steve Jobs

Here are 30 top influential SA business leaders forging the path towards a prosperous South African future.

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