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Competitive Strategy: Laurance Kuper

A top consultant explores the hard business advantage that ethics brings to an organisation

Juliet Pitman

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Lawrence Kuper of Competitive Strategy

Ethics and trust get a good deal of airtime in business discussions. But in spite of the lip service paid to ethical behaviour, people are hard-pressed to tell you why it makes good business sense. Either they feel it’s necessary purely because the repercussions of being caught behaving unethically are so serious, or they fall back on a moral explanation, believing “it’s the right thing to do”.

Laurance Kuper, MD of Competitive Strategy, has a different take. Kuper’s daily work involves one-to-one discussions with CEOs to help them identify sources of sustainable business edge and, as he states, “Ethics is a much neglected source of competitive advantage.” It’s a powerful statement.

And what’s different about Kuper is that he has researched and can provide concrete examples of the competitive edge that ethical behaviour gives to an organisation. His Masters thesis, which was subsequently published as a book, Ethics in Leadership,explores the practical business benefits of ethics.

Kuper emphasises the business – not the moral or theological – case for ethics. And, according to him, it’s a strong one. With the current crisis of trust in business, proving yourself honest can give you an enormous competitive edge.

It sounds simple and logical enough, so why doesn’t everyone do it? As Kuper points out, there are different types of trust and the right kind is difficult to cultivate. On the one hand, there’s predictive trust, which is based on the mutual self-interest of both parties and forms the basis of contractual business relationships:

“I scratch your back, you scratch mine.” What Kuper calls ethical trust is somewhat different: “This is based not on self-interest or deriving an immediate personal benefit, but on doing the right thing for the group.” A good example of ethical trust is blood donation – people choose to do it not because they derive a personal benefit, but because they believe it’s for the good of the community.

It’s a kind of trust that hinges on people feeling as if they are part of a group, Kuper elaborates. Building this sense of belonging is a tough task for leaders but, if they manage it, the rewards are rich. “All of a sudden stakeholders have a non-transactional commitment to the business.

Employees no longer ask what the business will do for them if they go the extra mile. And when there is conflict between the interests of various stakeholders one group is more willing to take a back seat if they believe it’s for the good of the company.”But does this really play itself out in the dog-eat-dog world of business?

Kuper says yes, and has a ready example to prove his point. “When Pick ‘n Pay experienced the poisoning scare, instead of staying away from stores, customers flocked to support the company. The shareprice went up. People felt such a strong connection with the company – because of the sense of trust – that they stood by it. Putting self-interest aside,they did what was good for the group.”

Kuper’s list of benefits is a long one: “Trust breeds common understanding and motivation. People know what the business stands for and have a guide for behaviour, so they stop ‘delegating’ decisions upwards and are able to sort out problems at the coalface.

This means the business leader is free to focus on strategic issues. Co-operation goes up and pride grows. With this comes a sense of self-governance; policing goes down as a result. Trust attracts and holds talent so you can get and keep good staff, clients and investors.

It also builds a forgiveness factor when people know they can rely on you to do what you promise. Customer loyalty increases exponentially.” Ultimately, transaction costs are lowered, making the business more profitable and more sustainable.

For entrepreneurs, there is a specific advantage to building an ethical business. As Kuper points out, entrepreneurs have strong self-expression needs and short time horizons; they are driven to get a business up and running and then expand to other operations.

“The benefit of embedded values, and the trust that enables them to exist, is that the organisation can survive with less attention from the entrepreneur, so they can focus on expansion.” In an environment where everyone is looking for the competitive edge, trust may just prove to be the ultimate “it” factor in your business.

Juliet Pitman is a features writer at Entrepreneur Magazine.

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25 Of The Most Successful Business Ideas In South Africa

Find out who’s making waves in numerous industries and how they managed to differentiate themselves in local and international industries.

Nicole Crampton

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“Disruption is all about risk-taking, trusting your intuition, and rejecting the way things are supposed to be. Disruption goes way beyond advertising, it forces you to think about where you want your brand to go and how to get there,” says Richard Branson.

South Africa has its fair share of innovative and disruptive businesses taking both local and international industries by storm. From cutting edge space technology to reimagined logistics, and innovative business models, here are 25 of the most successful business ideas in South Africa:

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Colin Timmis Says ‘Position Yourself For Success By Starting With The Numbers’

People pay first who they feel pressure from, so people will pay you when they feel pressure from you.

CEOwise

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Entrepreneur Colin Timmis founded South Africa’s first cloud accounting practice in 2011, Real Time Accounting. Then, a few years after being appointed as South Africa’s first Xero partner Colin became Xero Country Manager South Africa. Xero is the emerging global leader of online accounting software that connects small businesses to their advisors and other services.

Related: Pat Pillai On How He’s Helped Over 5000 Entrepreneurs Using 3 Key Steps

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Two 20 Year Olds Reshape Entrepreneur Landscape With New Social Investment Platform

The Merge vision is to become the ‘go to’, digital meeting place for entrepreneurs and investors, and to truly make a difference in the world.

Merge Connect

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It’s no secret that finding the right investor for your venture is a challenge that most entrepreneurs face. The current process of finding investment is one that is outdated, and limits entrepreneurs due to a lack of time, and network that is needed to find the right investor. But, this doesn’t have to be the case in today’s digital society, says Zander Matthee and Brandon Bate, co-founders of Merge.

“By making the Internet the middleman, we are able to connect with each other much simpler and faster than before” was Zander’s response. “We have taken advantage of this, and have created a digital meeting place for entrepreneurs and investors” added Brandon.

Merge is a social platform that connects entrepreneurs and investors. It aims to simplify, refine and accelerate the process of finding investment for entrepreneurs, and the process of finding investment opportunities for investors. From idea to developed, the platform allows entrepreneurs to present a brief outline of their venture to a network of all investor types. While doing this, entrepreneurs are able to browse through, and connect with investor profiles that suit their requirements.

Related: 8 Codes Of Success That Helped Priven Reddy of Kagiso Interactive Media Achieve A Networth Of Over R4 Billion

From Private Investors to Venture Capital, and everything in between, Merge allows all investor types to join. Investors have the opportunity to personalise their feed to suit their investment preferences, and will be able to connect with innovative businesses – that are looking for investment – at their fingertips. Only once there is a mutual interest in each other, are users able to enter a secure private chat where they can discuss further and share documents under the protection of a digital NDA.

The two boys became good friends during their time in high school at St Stithians Boys College. However, it was only in their last year, 2016, that they decided to pursue their dreams and create the platform. They didn’t know how to code, so rather ironically, they needed some form of investment to get the platform off the ground.

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“We knew we had a mountain to climb, but we believed in our vision and that we were really trying to make a difference, and if we could get others to see that, they would be onboard.” said Zander.

Related: Lessons From The Rich And Famous: Manage Your Money Like Oprah To Avoid Going Into Debt Like Nicholas Cage

Chris Peters is one of these individuals that bought into their vision, and became Merge’s first investor. As a successful entrepreneur and part time investor , Chris saw how much value the platform could bring to all entrepreneurs and investors alike. His marketing and strategic background gave him insight into how Merge could play a vital role in a lucrative space, Brand involvement.

“Entrepreneurship and SME development are two key factors that drive economic growth in developing countries like South Africa. That is why brands are currently getting involved, and looking to support entrepreneurs through various means. We have built a platform that allows these brands to successfully market, and execute on the programmes they have created to assist entrepreneurs.” said Chris

Merge was created to assist all entrepreneurs and investors in finding exactly what they are looking for, regardless of age, race, sex, financial position or social status. That is why anybody can sign-up as an entrepreneur. As long as you are determined and willing to work for your dreams. For too long has the investor space been seen as an “elite club for the select few”, and Merge is here to change that. Whether you’ve gotten your bonus at the end of the year and looking for new investment opportunities, or are an active investor, you can sign-up. Whether you’re currently working, or a retired industry leader, you can join as a mentor.

Their vision is to become the ‘go to’, digital meeting place for entrepreneurs and investors, and to truly make a difference in the world.

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