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- Players: James Robertson and Philip Cronje
- Company: Big Blue
- Est: 1986
- Turnover: R100 million
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.
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.
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.
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.
Bob Skinstad On Making An Impact With The 80/20 Principle
The 8020 principle is one of the most powerful success secrets in the world — provided you implement it. Most people have heard of it, few put it into action. Bob Skinstad is re-energising an age-old principle by sharing a collection of real-life examples from highly successful people of 8020 in action. Here’s how you can start embracing an 8020 mindset today — and see phenomenal results in return.
- Player: Bob Skinstad
- What he does: Bob is an ex-Springbok rugby captain, businessman, entrepreneur, a director at venture capital firm Knife Capital and has recently developed an online course for millennials, 8020 Mindset.
- Visit: www.knifecapital.co.za and 8020Mindset.com
When Gary Kirsten arrived in India in 2008 as the new coach of the Indian cricket team, he recognised he had a key problem. Many of the players on the team were not only more famous than he was, but more skilled as well. How do you coach Sachin Tendulkar, one of the greatest batsmen of all time, on his stroke? You tell him to keep doing what he’s doing, and get out of his way.
But Gary did need to find a way to build trust between himself and his new team. There were many superstars in Indian cricket, and yet the national team’s results weren’t good, mainly because they didn’t operate as a cohesive unit.
Implementing the 80/20 principle
To really make an impact, he turned to the 8020 principle. What small but significant area could he turn all of his attention towards, to achieve 80% of the results he was looking for?
He realised that the one thing he had that most of the other players on his team did not, was time. Cricket is extremely popular in India, and the members of the national cricket team had a lot of endorsement deals, which meant they were very busy. Whatever happened, Gary knew he could outwork them. For the first 200 days of his contract, he spent every day at the batting nets, from 6am to 6pm. Each time a player came to the nets, he was there, ready to assist them, or simply to show he wasn’t going anywhere. He also spent those 200 days really studying his team members and listening to them.
By leveraging this one key area, Gary built the trust he was looking for, and learnt an enormous amount of information about his players. He found the one place that would make the biggest impact. Three years later, that team went on to win the World Cup.
“What’s incredible about the 8020 principle is that it’s relevant in every single facet of life,” says Bob Skinstad, an ex-Springbok rugby captain, businessman and now venture capitalist.
“Gary is just one successful person in his industry who has shared his 8020 experiences with me; there are so many real-world examples. I first discovered it while I was playing rugby in my early 20s, and I read Richard Koch’s book, The 80/20 Principle: The Secret to Achieving More With Less, but I use it in my business development capacity at Knife Capital today, and have applied it in various ways throughout my life and career. It’s an absolute game changer if you understand how to apply the principles, and the success that putting pressure on the right levers can achieve in your life.”
To say Bob is passionate about fostering an 8020 mindset is an understatement. In fact, he believes so strongly in the principle that he approached Richard Koch himself to discuss how he could help millennials to embrace 8020 to lay the right foundations for their own futures and careers.
Sharing and teaching lessons learnt
“Richard has a house in Cape Town. I managed to get his contact details and sent him a long email explaining how we had used his principles in the Springbok rugby team. We were a young team, and we used 8020 to figure out who needed to get their hands on the ball at which times of the game to make the biggest impact. Our game improved markedly once we started applying Richard’s principles, and that led me to implement it in everything I did. Richard loved the fact that we had applied it in such different ways to how he’d laid the principles out in his business management books.
“I really wanted to share all the lessons I’d learnt, and also the experiences of so many other sportsmen, business leaders and entrepreneurs whom I know have used 8020 to achieve success. I didn’t want to write a book though — I thought a course would be more immediate and practical, particularly for millennials, who I believe can really benefit from fostering an 8020 mindset early in their careers. Richard and I collaborated on the course. I wrote the content, recruited a number of my contacts to share their own success stories, and Richard reviewed all the material before it went live. It’s been a great experience, and one I hope will spread the word of how significant a shift to the 8020 mindset can be. Once you understand the principles in action, it becomes the lens you use to make all of your decisions, which has an exponential impact on your life, business and career.”
80/20 in Action
In all business and personal development theories, there is a vast gap between understanding the theory and actually putting it into practice. Using the 8020 principle on itself, only 20% of the people who are exposed to 8020 will actually implement it, but they will reap 80% of the rewards as a result.
The problem is that reading about a theory is easy. Putting it into practice is hard. It takes discipline, and a real understanding of how the principles work.
If you’ve been exposed to 8020 (also known as the Pareto Principle) before, you know that 20% of a sales team is responsible for 80% of a company’s revenue, 20% of clients bring in 80% of business, and 20% of your actions each day impact 80% of your life. Imagine if you knew which 20%, and could put all of your attention into those key areas. Imagine how you would supercharge your own growth and success, opening hours each day to concentrate on high priority tasks instead of getting sucked into the quagmire of ‘busyness’ we all fall victim to without even realising.
80/20 principle in action
“A few years ago, I was involved in a restaurant in Cape Town. We realised that 80% of the food customers ordered came from 20% of the menu. Through this simple insight, we were able to take a 36-page menu down to two pages. We saved costs on wastage, streamlined kitchen processes, and increased our efficiencies and customer service levels through this one simple change.
“The hardest part is getting started. Once you see success in one area though, you naturally start looking for the 8020 in other areas of your life, and before you know it that’s how you look at everything,” explains Bob.
“I see examples of 8020 everywhere, but I also see a lot of what I call ‘2080’ thinking. Take the ‘latte factor’ as an example. A few years ago, the idea took hold in the US (and South Africa) that if you just stopped drinking a latte once a day, you’d save $250 in 100 days. I disagree completely. If you really want to impact your savings, renegotiate your bond with your bank once a year. That will give you a far greater saving than cutting out lattes, and you haven’t deprived yourself of something that makes life pleasant. One key negotiation at the right time will have a much bigger impact on your life — speak to your bank, negotiate a raise — but look at the key area that will have an 80% impact, instead of an almost insignificant impact. That’s where you should be putting your willpower, energy and self-discipline.
“Gym is another great example. We’re told to spend 20 minutes a day at gym. That’s great for your health, and you should do it, but in terms of weight loss and body shaping, it’s negligible if you compare it to changing your eating habits. Gym is 20% of your body. Eating is 80%. Where should you be putting your focus? Instead, we see people gyming and then eating two packets of chips, and wondering why they aren’t losing weight. It’s all about what levers you pull, and where you put your focus.”
Small changes, big results
In 2017, Bob brokered local VC firm Knife Capital’s expansion into the UK. Based in the UK, Bob’s role as a director at Knife Capital is business development — how can Knife Capital assist its investments to build high-impact businesses from a small base?
“Once again, 8020 hits the target every time,” he says. “We’ve recently invested in a Swedish-based business called MOST, which develops environmental monitoring solutions for the transport and shipping industry. An early investor in MOST is King Digital Entertainment, the creator of Candy Crush. We love MOST. It’s tracking really nice numbers, the management team is excellent, the product is next level, the business model allows for recurring revenues — but our aim as an investor is to grow the business. We needed to analyse which areas to concentrate on that will have the biggest impact on growth. Through applying 8020 we realised that 12% of MOST’s current customers are responsible for 82% of the business’s revenues.
“How much energy, time and resources are put into the other 88% of clients who are only responsible for 18% of the company’s revenue? And what can be done to bring more customers on board who are like the 12%, and not the 88% of MOST’s customer base? Focus on the right areas, and you’ll exponentially grow your revenues without increasing overheads or expending more energy — in fact, you could actually do more in less time, with fewer people, if you know where to concentrate your efforts.”
How to apply the 80/20 principle
Bob believes that at its core, 8020 is common sense — you just need to apply your mind to the principles, and ask the right questions: What’s your 8020? Who are your biggest customers, where are you spending most of your time, which actions have the biggest impact, and where are your waste areas? And in each case, can you 8020 the results you’re looking for? What’s the 20% that will generate 80% of your returns, or impact 80% of your success? What’s the 20% that will affect the world and your customers’ lives and businesses?
Local entrepreneur Keith Rose-Innes shares how he increased Seychelles’ fly-fishing tourism industry by 600%:
Keith Rose-Innes built his profile and expertise to become the go-to-guy for building fly-fishing trips around the world. Based on this expertise, Seychelles tourism hired him to increase visitor numbers to their islands.
The Seychelles is isolated and expensive. Keith did his research, and discovered that only 20% of fly-fishing agents were responsible for most of the fly-fishing trips booked around the world. Instead of spreading his efforts, he concentrated exclusively on those top agents, pitching the reasons why they should promote the Seychelles to their clients. Within six months he’s increased year-on-year sales on the islands by 100%. This grew to 600% over the course of four years — simply because Keith focused his efforts where he would have the greatest impact.
Take the course
8020 Mindset is a five-hour online course endorsed by Richard Koch and presented by Bob Skinstad. It’s designed to help participants think like results-orientated super-performers.
Lesego Maphanga of Standard Bank
Lesego Maphanga is young (he only graduated in 2014 with an Industrial & Systems Engineering degree), yet he has already made a name for himself in multiple industries. His secret to success? Always doing more than is asked of him.
- Player: Lesego Maphanga
- Company: Standard Bank
- Position: Manager: Card & Emerging Payments; Africa Regions
- About: At only 27, the maths & science whizz works at Standard Bank as an Emerging Payments manager responsible for implementing remittances products across multiple African Regions. He also has his own radio show on CliffCentral called the Urban Culture Drive, and is founder of social entrepreneurship movement called Unplugged and in Charge.
I studied engineering knowing right from the start that I would never work as an engineer. I just couldn’t see myself working at a mine, or something like that, but I knew that engineering would give me a solid foundation and allow me to keep my options open. A STEM (science, technology, engineering, maths) degree is a great base, as it shows that you have a mind for numbers and the analytic mindset needed to get things done. I don’t think you can go wrong with a degree in one of these fields, even if entrepreneurship is your ultimate aim.
How can I set myself apart?
You have to ask yourself this question. There’s a lot of competition out there. You might have a great academic history or work experience, but so do a lot of people, so you need to have a differentiator — something that makes you stand out. I entered Mr South Africa, for example, because I knew that it would increase my profile and add something interesting to my CV. I didn’t win, but I was a top-five finalist, which was good enough for me.
Find interesting things to add to your CV as well, since it’ll make it stand out in a massive pile of similar submissions.
Always go the extra mile
I had a lecturer who always said: “There are two kinds of bad engineers. There are those who don’t do what they’re told to do, and there are those who only do exactly what they’re told to do.” You need to add value and show that you are a crucial part of a team, so don’t just do what you’re told. Instead, look for ways in which you can go beyond the brief. Work hard and spend time coming up with your own ideas and projects. At the end of my studies, I interned at Standard Bank. I knew that I only had five weeks to make an impression, so I gave it my all. When you’re young, you don’t have many responsibilities apart from work, so that’s the time to put everything into your work.
Be audacious and make things happen
Seizing an opportunity that comes to you is great, but creating your own opportunities is even better. Don’t take no for an answer, and don’t wait for someone to give you a chance. A friend and I had an idea for a radio show and decided to put a proposal together. We had no experience and no contacts in the field, but we emailed our proposal to everyone we could think of. We spammed them, sending it out every single day. Eventually, CliffCentral got in contact with us.
I don’t want a ‘normal’ life
I want an extraordinary life, so I demand a lot of myself. I think Elon Musk is a great example of this. He’s doing things no one thought possible. Of course, it requires extreme levels of dedication and hard work. If you’re aiming for the top, I don’t think work/life balance is possible. You need work/life integration. You need to be pursuing your passion all the time. If you’re on a path you’re truly interested in, work doesn’t feel like sacrifice.
Exercise is important to me
I go to gym twice a day. It’s significant to me, as it allows me to relax and clear my mind. It also provides structure to my life. When I get up early and go to gym, I find that the rest of my day falls into place. It sets the tone. As long as I maintain focus in this part of my life, I find that things overall stay under control. Sometimes, though, I need to take a day off and just sit in front of the TV. Generally speaking, however, I find that routine helps maintain focus and momentum.
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.
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.
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.
“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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