How to leverage the unique strengths and capabilities of your company, country or region to create a sustainable business with a strong competitive advantage.
This article is done with specific emphasis on emerging markets where many local communities lack the resources or a sustainable way to create a higher standard of living for all. Examples are used to illustrate what countries and regions can do to resolve this challenge.
Essentially, it also endorses the fact that true competitive advantage lies in what a company can truly do authentically.
How to use what makes your country unique to create competitive advantage
1. Creating a unified vision;
collaborative thinking; coordinated and
integrated activities –
an “eco-system”
to create a “better-life-for-all” in the region.
22 June 2012
2. Our position today:
• Vast unemployment.
• Low standard of living.
• Low skills base.
• Many activities, but anecdotal and uncoordinated.
• We waste & undermine resources with no coordination.
• This whilst the world and some parts of SA is starting to work.
3. To create a sustainable future, we need to align
people, planet and profits…
• This triad is important – yet the triad needs to work – it can only work if
there is money to make it work.
• Even though un-rivaled capitalism is not good, even China is proving that
people want to use their skills and resources to create the life they want.
No-one wants hand-outs!
• I travel a lot in Africa – most people I have come across over the years
want to become proud of who and what they are. They want to make
money and change their lives, as well as the lives of their families.
• Most people just do not know how to do that.
4. As humans, we are naturally industrious, we want to
“better” our lives…
both government and business is there to facilitate
that.
• We need to generate more than we consume – and I believe most
people want to, everywhere in life. A clear vision and leveraging human
capital, remains the best ways to do that.
• Enabling people to do this, is where our focus must be.
– The famous strategist Prof Gary Hamel of Harvard states that human capital is
far more widespread than we think, if we care to look for it.
– We can release this capability as government and business.
• Whilst we can give direction and provide infrastructure as
government and business, people must then be “released” to do
what they do best.
5. Also, there is nothing wrong with making money, it is in
the natural order of people to want to do something
with their lives, making money as a principle is no
different!
It is how we do it that matters.
• To use the example by the previous CEO of GE, if you do not generate profits,
THERE IS NO MONEY TO DO GOOD! SIMPLE FACT.
• Unless companies pay tax there is no way they can “do good”.
• Unless companies make money, they will have no investors.
• Unless companies make money, they cannot pay staff. This does not mean some
do not abuse it, but the principle remains.
• Wealth is created when we produce more than we consume, in all respects.
• To do good, a company needs to DO MORE WITH ITS RESOURCES than other
companies… that means 2+2 = 6, not 3 or 4!
6. Some background: in business today…
• Outside of size, the only ways to achieve superior performance are:
– By creating exceptional products and services;
– By being different enough so that consumers will pay for it. By doing things that are
totally unique!
– By focusing on niche markets not catered for by larger players.
• By becoming really creative & innovative, we can truly change the
prevailing context - as a business example of how value is created:
• The top 20 companies in the Fortune 2010 list of fastest growing companies
received $3,40 in incremental market capitalisation for every $1 of revenue
growth.
• For the companies that created new categories, this was $5,60!
7. Creativity has a serious role in business today: we sit
on this vast resource, what are we doing with it?
• Before the iPod, there were MP3 players, yet Apple took the concept of an
MP3 player and created a new market, using their exceptionally creative
skills. It used the same labour as others - but produced more value.
• This is a simple example of how we can produce something others also
produce, but do it in a way that sells for so much more money, that we
create a better life for those involved in it.
• Another example is the fact that the exceptional design that went into an
iPad, enables it to charge three times more for the same thing, as it
closest rivals can!
• To me this thinking has to be the foundation of how we in SA can actually
become a successful, sustainable and prosperous country. We need to
understand what people want, take our skills, and produce things that will
create value for our companies and our people, beyond survival alone.
8. If we compare where the exponential benefit to create wealth is
greatest, it is when we think different and do different things.
Degree of competitiveness
Low – commoditised Highly
differentiated
Profitability
Commoditised –
most airlines
Differentiated offers,
i.e. better service
Niche markets
New categories
Revolutionary new products
High
margin
spaces:
more
value is
created
than we
consume.
Moderate to fair
margin spaces
Low margin
spaces, only
competitive
advantage
volume
9. Doing something with what you have:
The “story of Salem”…
• The “Salem witch trials” were a series of hearings and prosecutions of
people accused of witchcraft in Massachusetts between 1692 & 1693.
– Today, you can do an “Online Trial”…
– You can visit this unique town…
– You can share in the history…
Turn what you are into a
competitive advantage and arrange
the “eco-system” to support that.
Then unleash people’s creativity and
natural entrepreneurship drive.
Enable, then stand back.
12. Here is a town that has created an ecosystem of related
activities around a negative legacy.
Part of it planned, part of it leaving it to the imagination of
its people.
13. Today, this is a drawcard for tourists – and entrepreneurs that see new
opportunities!
15. The people of Salem took a potentially very negative issue and turned it
into a commercial opportunity;
one that provides a livelihood for many of its people.
It is a simple illustration of what can be done with entrepreneurial thinking
–
leveraging the strengths of a community.
KZN is our most diverse province, in people and nature…
Durban is our most transformed city –
surely we can leverage these strengths?
By cooperating, envisioning, training, enabling, creating
infrastructure, providing trade routes - nurturing…
and then allowing nature to take over.
16. My own home town...
• Seven years ago.
• 42% unemployment. No opportunities.
• One savvy individual.
• Gain support from key people in the community. Create a small team of
supporters.
• Help people to decide what to do. Create a vision of how to better the life for
all.
• Help them organise themselves.
• Help them with systems, processes, product distribution, margins,
management.
• Last count, unemployment down to 16%.
17. What we need to do:
• We miss a grand strategy and overall thinking.
• We need to align, integrate and coordinate activities.
• We need to create the knowledge and skills based required to make it happen.
We need to create a plan and process to make it work!
• We need to put the nurturing in place.
• We need to empower with some infrastructure.
• What makes us unique? How can we create something of value people want
and will pay for?
– What can we produce/ offer the world and other South Africans, tourists, etc.?
• How can we create an ecosystem to enable this?
18. Then – get out of the way,
people will ultimately help themselves.
We just need to enable, produce the tools and light the fire of
confidence.