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How Big Blue Grew by Embracing Different

Zero to R100 million. Lessons from Big Blue, South Africa’s quirkiest retailer.

Paul Smith

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Vital Stats:

  • Players: James Robertson and Philip Cronje
  • Company: Big Blue
  • Est: 1986
  • Turnover: R100 million

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Big Blue is arguably South Africa’s most distinctive and unique retailer. It’s also one of the country’s largest T-shirt retailers, which is even more impressive when you consider that Philip Cronje and James Robertson have chosen to work predominantly with local designers and manufacturers instead of importing cheaper fabrics.

While helping to create jobs locally, they also remain environmentally and socially conscious, opting to use locally milled and recycled fabrics, and actively supporting craft groups like the Hillcrest Aids Project, Diepsloot Crafters and Topsi Foundation.

They’re lofty goals, but is there a strong business case for staying local as well? Cronje and Robertson firmly believe there is. The brand isn’t just different for the sake of being different. Big Blue’s list of achievements is extensive.

It offers a greater choice of products than almost any clothing store of a similar size, turn around on new stock is measured in days (compared to months or seasons as is the case for many clothing retail chains), and in the company’s 26 years you can count the number of staff members who have resigned on a single hand.

Related: Is Your Business Truly Different?

The university of life

Cronje and Robertson are not big fans of business books or self-help guides, but rather have a management philosophy that has been influenced by rich and diverse life experiences, a willingness to try new things, and a healthy appreciation for the humanities.

With almost three decades in their stride, they have overcome many challenges. Here are two challenges and how they overcame them.

1. Experimentation

When the company branched out from the local flea market, the major challenge they faced was how to differentiate themselves from the hundreds of other boutique retailers nationwide. Their approach was to experiment.

“Try stuff and if it works, keep on doing it; if it doesn’t, stop,” recommends Robertson. Many studies have shown that Robertson holds very similar beliefs to most very successful entrepreneurs. They are sceptical of predictive information, which means they don’t decide upfront if an idea will work or not. Instead, they run small experiments, not risking too much, but getting some initial data to decide whether to invest more fully in a strategy or not.

Richard Branson has used the strategy again and again to launch new businesses. He runs an ‘experiment’ (ie. he launches a new business), but ensures that he keeps the downside risk to a minimum so that the losses can be absorbed by the business. For example, when he launched Virgin Airlines, he negotiated a deal with Boeing that allowed him to give the plane back after 12 months if the airline wasn’t making money.

While he would have suffered some financial loss, it was planned for and could be absorbed without impacting the Virgin empire. This type of thinking allows entrepreneurs to try crazy and bold ideas in the market place without hurting the core business.

2. Differentiate yourself

The key lesson from Branson, Big Blue and a large list of other successful entrepreneurs is in your search for differentiation, test your ideas in the market place. Get your ideas in front of customers before ‘predicting’ whether an idea will work or not.

The retro-kitsch differentiationBig-Blue-store-owners

One of Big Blue’s many breakthrough ideas came from Danzigers, a Johannesburg-based wholesaling business that started in 1910 and supplied goods to OK Bazaars. If something didn’t sell well, it was stored as old stock. The result was boxes of consumer goods from 1910 to the present day, like a museum of South African consumer taste.

It struck a chord with Cronje and Robertson, and became the inspiration behind Big Blue’s fun and quirky retro-kitsch stores, with an Afrikaans museum flavour.

An early pilot store, aptly named Kitsch and Kool, was set up in Rosebank, and the original Big Blue store that followed was an instant success. It generated a flood of magazine and television publicity as well as a healthy increase in sales. This store also became one of the first in the country to combine gifting with clothing, a concept that is now commonly known in the retail industry as a ‘lifestyle store’.

The overwhelming success motivated the duo to add a retro-kitsch flavour to all their stores, while always having interesting gifts on offer. This differentiated them from the big brand retailers, and other boutique clothing stores.

Connecting the dots

A wide body of research has shown that successful innovators do two things extremely well.

They actively seek out new ideas from a variety of sources: Books, people and customer feedback and have a questioning mind-set.

They connect the dots: They’re able to take ideas from one field and apply them to another domain, connecting ideas from unrelated fields to develop new and unique solutions.

Robertson and Cronje’s lifestyle led them to the discovery of new ideas. They travel, they read and mix with interesting people from a variety of backgrounds. They’re constantly being exposed to new ideas and thinking. In addition, Big Blue specifically looks for employees who have varied interests outside of work. It’s not unusual to find someone who is a retail assistant by day, and an actor singer-songwriter by night.

The lifestyles of nearly all great innovators mirror Robertson and Cronje. Successful innovators create rituals and routines that allow them to discover new ideas. A study done by leading business school professors Christenson, etc. found that innovative CEOs spend 50% more time on idea discovery activities than non-innovative CEOs.

For example, the legendary investors Buffett and Munger spend hours reading every day. Elon Musk of Tesla, Bill Gates of Microsoft and Larry Page of Google, three of technology’s most admired CEOs, have a similar large appetite for books.

Books are not the only place innovative CEOs search for ideas. Michael Dell, the founder of Dell computers is known to be a prodigious networker. Other innovative CEOs, such as Scott Cook of Intuit and Steve Jobs of Apple got most of their ideas from observing the world around them. Jobs borrowed ideas from competitors at Xerox, food processors at Macy’s and the finer details of a Mercedes-Benz.

If you’re constantly looking to develop new ideas for your company, follow the footsteps of some of the world’s more innovative CEOs and create habits and routines that will expose you to new ideas constantly.

Bootstrapping the business for growth

One of the biggest challenges Big Blue or any company faces is growth. Growing a single pop-up shop at a flea market to over 22 stores nationwide posed significant growth and cash flow challenges to the founders. Cash flow management in the retail industry is especially tough. Each additional store requires signing of new lease contracts, fitting out new stores, purchasing stock, and paying a new team of staff, all while a store moves towards break-even.  Big-Blue-store-in-South-Africa

True to form, the Big Blue team had an unconventional approach to managing the growth process. Rather than take on outside capital, they decided to fund with internal profits. Cronje and Robertson chose to live a frugal lifestyle, driving second hand cars and mortgaging their houses to fund the working capital cycle and new store growth.

What’s most notable, however, is their approach to growth. They have systematically added one new store each year. With the discipline to not grow too fast, they manage to avoid putting cash flow strain on the business. This approach has allowed them to master the skills needed to manage the business as it’s grown, as well as to fund the growth of the business without being overly reliant on outside capital.

This methodical tempered growth has been used by a variety of successful companies to go from start-up to large corporation. Business failure researchers and practitioners know all too well that many fast growing companies often die not due to lack of sales, but too much growth.

Growth creates problems: Cash flow crunches, fast expanding teams, a dilution of the company culture and product quality issues.

Researchers have found that companies that aim for methodical tempered growth achieve greater results over the long-term than those that aim for maximum growth. The most famous piece of research on this thinking is the Jim Collins and Morten T. Hansen book Great by Choice, which showed how 11 of the best performing companies in their sample outperformed their 11 comparison companies by more than ten times by aiming for methodical and tempered growth.

Southwest Airlines achieved profitability over 30 consecutive years, while the airline industry as a whole only did this for six years. Intel upheld Moore’s law, doubling the performance of the integrated circuit every 18 months. Again and again the companies that aimed for steady, stable growth outperformed ones that chased growth in the good times.

A few key questions to consider when deciding on your methodical growth strategy:

  • At what rate can I hire new employees and still keep a strong company culture?
  • What is the business sales to asset ratio and, as a result, what rate can the company grow at without causing cash flow problems?
  • What achievable annual goal can the company consistently chase?
  • What goal would we be able to consistently achieve even during bad years?

Following these core principles, you’ll follow in the footsteps of some of South Africa’s top success stories.

Related: 5 Moves Small Retailers Must Make to Compete With Big Box Stores

Paul Smith is a writer and startup scientist. He currently manages an accelerator, Ignitor, which helps entrepreneurs start and grow their businesses. Ignitor has developed a new model that significantly improves early stage start-ups odds of success. His primary research interests include understanding the behaviours of expert entrepreneurs, as well as, how to most effectively support high potential start-ups. Follow him on Twitter and visit his website.

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Joel Stransky Shares His Insights On What Makes A Great Leader

Enter Joel Stransky just as friendly as the rest of the team, also casually dressed, also wearing a smile. As a founding director of the innovative Pivotal Group, he explained that their value proposition particularly in Pivotal Talent.

Dirk Coetsee

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Posters displayed on companies’ walls representing the business’ Vision and value system are a common occurrence. A general value that numerous companies share is to be client centred and to provide excellent service. Yet, unfortunately a proportion of companies do not live according to their values as tools to actualize their collective Vision.

An observant individual would take only a few seconds to notice that the Leadership group at Pivotal has gone to great lengths to establish a definitive and value driven culture as well as a motivating climate for their team members. As I waited in the reception area I was met with smiles from several people passing by and there was generally no way to assess what their position was as they were all casually dressed, friendly and approachable.

Related: 5 Things Businesses Can Learn From Rugby

Enters Joel Stransky just as friendly as the rest of the team, also casually dressed, also wearing a smile. As a founding director of the innovative Pivotal Group, he explained that their value proposition particularly in Pivotal Talent, is the use of Augmented Intelligence and data analytics within the “human capital space”.  The application of AI and data makes talent acquisition and career guidance much less of an enigma and challenge as opposed to the recent past where traditional talent acquisition and career guidance methods became less and less successful and more and more time consuming.

The “pivot” of the 1995 Victorious Springbok world cup team shared that he always starts off an employee-employer relationship with the assumption of mutual trust and respect. He believes that once you have put in the sincere effort to understand people better, bigger belief in them is a natural result.

“The greatest asset in business is people,” Joel passionately explained and added that it is possible for a brilliant product to fail in the long run when the wrong people are employed.

pivotal-group

“Hiring the right people that would not only help sustain the current culture but add more value to it is critical to any team or companies’ sustainable success,” Joel explained. The Millennial generation think differently and have different expectations from a working environment, therefore it is a critical factor for any manager and/or Leader to understand what drives the emerging generation and also how to manage the polarity of generational gaps.

Related: Servant Leadership – Will You Serve?

As a result of diversity and generational gaps Leadership and management has become a fascinating space to operate within South-Africa as not only cultural and language barriers might offer a challenging HR environment, the millennial generations unique behaviours amplify the need for useful adaptations within all spheres of work.

As a practical example, employee X is twenty-three years old. Some of the key questions that management needs to figure out, that is if they sincerely want the best for, and the best out of employee X, are:

  • Is X motivated by monetary rewards and/ or does she/he need a regular hug to feel part of and add to the company culture?
  • Does X need to interact with management socially for example be taken out do dinner?
  • What skills does X have or lack that impacts his/her performance?
  • It is impossible to motivate someone else. In what way can I create an environment for X wherein he/she can motivate himself/herself and excel?

How you satisfy Xs’ needs and manage all related factors to his or her needs has become critical success factors in how we as leader’s approach career development in general.

Reflecting on the development of his own sports and business career, as well as his family life Joel is adamant that whatever drives you in sport also drives you in business and within your family life. Whatever he has achieved within all aspects of his life came as a result of setting goals and making those goals a reality.

Both in sports and in the business world within South Africa there is a general tendency towards over structured management and coaching. Although a structure and daily management is an integral part of business and sports, a paradigm shift towards inspirational Leadership that empowers other leaders to succeed is key in terms of serving others and creating a motivating and sustainable environment within which all team members can thrive.

Reflecting on Joels’ observation: “Our countries’ value chain is broken” the moment has most certainly arrived within which more and more value driven and ethical Leaders, emerging from all generations must arise and collectively work towards an improved future.

Critical to the actualisation of a collective future vision is the development of Leadership skills therefore one of the keen interests of the author is to recognise and learn from other Leaders’ character traits. Joel’s’ highly effective communication skills underpinned by the core people skill of active listening quickly came to the fore as he could quote part of my question and comments in each of the very insightful answers that he provided. His keen willingness to innovate and to create inspiring working environments makes his enthusiasm and skill as a Leader tangible.

Let us all challenge ourselves to learn from prime Leadership examples offered by individuals such as  Joel Stransky and leave more and more Leaders behind for only in such a way can an inspiring future be built.

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Nhlanhla Dlamini Not Only Has Guts, But Grit – In Spades

An alumnus of WBS and Harvard Business School, Nhlanhla Dlamini did some soul searching when he was doing his MBA at Harvard, and knew that the corporate ladder, although tempting, was simply not going to be enough.

Wits Business School

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It takes guts to venture into entrepreneurship. And when you’re in a ‘cushy’ job with a top global auditing firm who are grooming you for partnership, it takes even more guts.

Nhlanhla Dlamini not only has guts, but grit – in spades.

An alumnus of WBS and Harvard Business School, Nhlanhla did some soul searching when he was doing his MBA at Harvard, and knew that the corporate ladder, although tempting, was simply not going to be enough.

“I started thinking, ‘what is the best thing I can do with my life?’”, recalls Nhlanhla. “I always felt a pressing need to get involved in lowering the unemployment rate in South Africa.  It’s a notoriously difficult space, but entrepreneurship is the real engine of job creation and I felt compelled to rise to the challenge.”

When he left his job at McKinsey in March 2015, Nhlanhla decided to explore the agricultural sector – having no idea what product or what part of the value chain he would end up in. He spent until December that year exploring the agri-food sector, gaining as much understanding as he could about the entire industry by talking to famers, co-ops, agricultural associations and various other stakeholders.

Related: 10 Young Entrepreneurs Under 30 Share Their Start-Up Secrets

“I wanted to export products to the US and I looked at tree nuts, blueberries, dairy products or meat. Because of stringent FDA regulations, meat wasn’t an option – but a friend of mine from WBS days suggested meat in the form of pet food.”

And so Maneli Pets was born, and Nhlanhla moved his fledgling business into a factory, which he re-purposed for meat processing, in October 2016. By June 2017, he had started operations with 30 employees on board, and by September he had 50 employees.

Maneli Pets

What makes Maneli different from other US-bound pet food products in an already saturated market? The answer is high protein meat from animals that are unique to South Africa.

“I discovered a market for the off-cuts of meat  from specialist butcheries – so crocodile, warthog, ostrich etc,” Nhlanhla explains. “The result is a very high quality, high protein pet snack with a difference – and US pet owners are willing to pay for the best they can get.”

Under the brand name ‘Roam’, Maneli Pets products are exported to a pet food wholesaler in Boston, US, owned by the family of Nhlanhla’s former WBS classmate, who had planted the seed of the idea in the first place.  Nhlanhla is now preparing to launch the products under another brand name for distribution in South Africa and export to the EU.

But pet food is only the start. Maneli Pets is an offshoot of the Maneli Group, a diversified food company which is looking ooking to build further businesses in the green energy sector, while boosting black entrepreneurship.

According to a City Press report, South Africa has relatively few black-owned food production businesses, which is why government is actively promoting agro-processing and the manufacturing sector in general to spur economic growth.

Nhlanhla has worked tirelessly to secure government funding, and was thrilled to obtain R26 million from the Industrial Development Corporation (IDC). Just last month, he received the news that Maneli Pets had been awarded grant funding of R12.5 million from the Department of Trade and Industry’s Black Industrialists Scheme (BIS).

Nhlanhla, who was also a Rhodes scholar at Oxford University, considers his PDM at WBS a “superb” way of preparing a student for the real world of work. “The group dynamics was an essential learning experience in terms of delivering on a mandate with a group with entirely different skill sets.”

Related: Edward Moshole Founder Of Chem-Fresh Started With R68 And Turned It Into A R25 Million Business

Describing himself as a “passionate and active WBS alumnus”, Nlhanhla still stays in regular contact with a core group from his PDM class, proving that one of the enduring benefits of a PDM (and an MBA) is the opportunity to connect and network with like-minded people and form life-long friendships.

Apart from what he learnt in the Entrepreneurship Management module of the PDM, such as the pillars of entrepreneurship, macro trend support and financing an idea, Nhlanhla considers the keys to success are threefold: Recognising the value of a social network, tenacity – and just a little luck!

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See Will.i.am And Malcolm Gladwell Live In South Africa

The BCX Disrupt Summit has gathered some of the world’s most innovative and disruptive thinkers to guide you and your business into the future.

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See Will.i.am And Malcolm Gladwell Live In South Africa

As one of the largest technology players in South Africa, BCX embraces disruption. As an organisation, one of its primary focuses is to move its customers into the future, not just with products and services, but a shift in mindset as well.

What tools and ideas do we need to embrace today to be ahead of the curve tomorrow? With this in mind, BCX has partnered with BrainFarm to launch the inaugural BCX Disrupt Summit.

“The BCXDisrupt Summit is a platform for South African innovators and businesses to learn from and be inspired by some of the greatest examples of possibility in the world,” says Dean Carlson, founder and CEO of BrainFarm, the event organisers.

A gathering of minds

The BCXDisrupt Summit is bringing some of the world’s greatest minds together under one roof for two days. The speaker line-up includes will.i.am, Malcolm Gladwell, Rapelang Rabana and Nick Goldman and topics covered will range from where technology is heading, to how playing games can extend your life expectancy by up to ten years.

will.i.am

will.i.am

Seven-time Grammy award winning hip hop artist will.i.am is also a significant player in the tech and entrepreneurial space, as well as a philanthropist. He was a partner in Beats Electronics, which was sold to Apple for $3 billion in 2014. “When will.i.am was 16 years old, music was where it was at,” says Dean.

“And so, he focused on building a music career, and creating products for that industry. Today he’s learning to code, because that’s where it’s at. He’s got an unparalleled handle on where the world is moving to, and so many insights to share.”

Dean has built BrainFarm on a portfolio of incredible local and international speakers, each of whom he’s seen live. “I regularly attend international conferences to get a sense of which speakers and idea-shapers I’d like to bring to South Africa,” he explains.

“will.i.am is one of those global shapers whose ideas take everything to the next level. To get maximum value from him for our delegates, we’ve chosen an interview set-up instead of a key-note talk. Local tech expert Aki Anastasiou will be interviewing him, and the audience will be able to ask questions as well. This will give us an opportunity to localise will.i.am’s knowledge and ideas.”

Related: 10 Young Entrepreneurs Under 30 Share Their Start-Up Secrets

Malcolm Gladwell

Malcolm Gladwell

Author of five New York Times bestsellers, including David and Goliath and Outliers Gladwell is well known for introducing the concept of the 10 000-hour rule, which states anyone can become an expert in anything given enough time and practice. Dean first brought Malcolm Gladwell to South Africa in 2009.

“When I dropped him off at the airport, Malcolm signed his book for me with the words ‘Please invite me back,” says Dean.

“We’ve tried to bring him out a few times since then, but the timing hasn’t worked out. This was the ideal summit for Malcolm’s ideas, and this time, the timing worked.”

Having seen Malcolm in action many times over the years, Dean knows that he’s a speaker that always leaves his audiences wanting more. And so, the BrainFarm team thought about the best way give their delegates exactly that.

“Malcolm has developed a masterclass for the second day of the Summit that will focus on what makes a person successful, both in life and business. He’ll be unpacking tools our delegates can use to personally drive success.”

Nick Goldman

Nick Goldman

Nick is that rare breed of academic who is also an engaging and entertaining speaker. A UK-based mathematician and genome scientist, Nick is passionate about how we can store and preserve digital data.

“If you want to feed your brain, Nick is the person who will do that for you. His team recently coded five documents of historical significance onto a strand of DNA,” says Dean.

Each day, what we thought was possible changes. What does the future look like, and are you ready for it?

Related: 10 Inspirational African Entrepreneurs

Marieme Jamme

Marieme Jamme

Born in Senegal and sold into sex slavery, Marieme Jamme refused to accept the lot life had given her, and instead taught herself to code. It was a skill that enabled her to change her conditions and life. Today, through her latest venture, iamtheCODE, she has one giant, global goal: To teach one million women and girls to code by 2013.

“Marieme has a consultancy that helps tech companies get a foothold into Africa, the Middle east, Latin America and Asia, and she’s also focused on her mission to help other women and girls escape their fates by learning to code,” says Dean. “She’s one of the most interesting and inspiring people I’ve ever come accross.”

Sipho Maseko

Sipho Maseko

Heralded as the controversial CEO and saviour of Telkom, Sipho has helped the company rack up gains of 150%, making Telkom one of the best performing companies on the JSE. “A major focus of Telkom is getting businesses across Africa ready for tomorrow’s customers,” says Dean.

“To be ready for tomorrow’s customers though, you need to know who they are, and have a sense of what the future will bring.”

Jane McGonigal

Jane McGonigal

A game designer, Futurist and New York Times best-selling author, Jane’s TED Talk, The Game That Can Give You Ten Extra Years of Life, has over six million views to date.

Related: The 10 Strangest Secrets About Millionaires

Rapelang Rabana

Rapelang Rabana

Local tech-star Rapelang Rabana is the CEO and founder of Rekindle Learning, a company she has positioned at the crest of a rapidly rising online community across Africa.

Her mission: To deliver learning in bite-sized chunks across the continent.

Ian Russel

Ian Russel

CEO of BCX. BCX has invested millions in computer programming education so that young people from all social and economic backgrounds have the opportunity to become programmers at no cost to them.

Lars Silberbauer

Lars Silberbauer

When Lars joined LEGO as Senior Global Director of Social Media and Video, the company didn’t even have a Facebook page.

“Today LEGO has well over 12 million followers on Facebook and more than three million on YouTube where they’ve just knocked up five billion lifetime views,” says Dean.

“The big idea behind their social media campaigns is to leave the thinking to their fans. Lars understands the creative power of the crowd, and what harnessing that power can do for your business.”

Related: 8 Things Exceptional Thinkers Do Every Day

Bringing it all together

Dean Carlson

Dean Carlson

“We focus on projects that excite us, and that will change the perceptions and world views of our delegates,” says Dean. “We’ve partnered with BCX to put together an incredible event that will leave you inspired, amazed and driven to change your life and organisation – with the tools to do so.”

To find out more about the BCX Disrupt Summit or to book a seat, visit https://www.bcxdisrupt.com/

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