'The typical successful entrepreneur
is a mature and careful person
who fearfully recognises
that there is much more
he doesn't know about his business
than he likes.
He's thirsty for help
from any credible source.
He's in a hurry,
but only because time is precious.'
Marketing Corporation of America.
Whether you're an employer
or an employee,
you will have to make more decisions
and assume responsibility for them.
of managers, particularly those trapped midway up corporate ladders in
vertically structured companies, face uncertain futures. Businesses,
desirous of survival beyond the year 2000, are ripping up organisational
charts and calling in hatchet men to slice off midriff executive flab.
Like most business trends, this one started in the United States,
where companies - large and small -
peeled off layers of staff during the recent prolonged economic downturn.
Corporations in Europe and the United Kingdom followed suit.
Now it's happening here.
Out to pasture
Many, if not most, of these consummate corporate players are too
young to be put out to pasture. And they're too attached to the perks and
perceived safety of job tenure to go-it-alone. So they'll seek new little
function boxes in other corporate organisational charts.
But they won't find them.
|They don't want managers. They want people with gumption and gall
to run their own shows.
So, if you're already out on our ear or if you've survived the first
round of head chopping but feel you may be next to find your head on the
block, ask yourself a simple question:
'Do I have what it takes to be an entrepreneur?'
If you answer 'no' ... if all you want is a nice safe job that comes
with a medical aid plan, a pension fun scheme and, possibly, a set of corporate
wheels, you'd better start changing your attitude.
So to stay in business and thrive, follow this ...
FIVE-POINT SURVIVAL PLAN
- Become an entrepreneur.
- Develop 'intrapreneurs'.
- Encourage employee initiative.
- Encourage the development of spin-off companies.
- Lacerate red tape.
In what remains
of the 1990s
the turn of the century,
corporations will need go-getters,
executive memo junkies.
Become an entrepreneur.
Before you can become one, you have to know what an entrepreneur
is. There are almost as many definitions as there are management gurus, who
seem to replicate with the rapidity of mushrooms in the veld after a Highveld
However, let's start with a couple of dictionary definitions.
Collins Standard English Dictionary
defines the word as 'an
organiser of business or trade who brings land, capital and labour together
for some definite commercial undertaking.' It's a definition you could apply
to anyone from the chairman of the Anglo American Corporation to a wheeler-dealer
in the less savoury parts of Johannesburg's Jules Street.
Reader's Digest Reverse Dictionary is more in tune with the
times. It describes an entrepreneur as: 'Businessman undertaking ventures
involving risk and initiative.'
The operative words in that definition are
Bearing this in mind, what are your chances of survival as a refugee
from old-fashioned pyramidal structures?
Pretty good, according to Peter Drucker, Austrian-born doyen of
business consultants. He claims that people brought in the traditional management
culture of big business make the best entrepreneurs.
He argues that entrepreneurship is a discipline. And like all disciplines,
you can learn it. Entrepreneurship, he says, requires the ability to build
and manage a growing operation, because if an operation doesn't grow, it's
'While the archetypal entrepreneur relies on instinct and reflex,
the trained manager, versed in corporate culture, prefers deliberation and
considered judgement,' Drucker maintains.
Not all management gurus agree.
One who doesn't is Tom Peters. He reckons that if you've been schooled
as a manager in big business, your chances of succeeding in the new business
world aren't bright.
Performing one function
Too many of them [traditionally trained managers] lack overall management
perspective. They've spent 80% of their careers performing one function.
and a large dollop
|'Many who spent their careers as staff specialists are deficient
in people skills. They don't have the fire in their bellies or the willingness
to take substantial risks; the boundless determination to beat the big challenge.'
The fiery American consultant
isn't always right. Sometimes he doesn't even come close. To prove my
point, you need look no further than Raymond Ackerman.
In his formative business years, he toiled for the Greatermans Group -
still a sizeable fish in the South African corporation pond. He parted company
with the group in 1965 and, shunning conventional wisdom, took over Pick
'n Pay, a small supermarket in Mowbray, Cape Town. Within a few years, he
had built it into a nation-wide retailing legend.
Liberally translated from Yiddish, chutzpah means audacity, insolence,
gall. It's one of the staple qualities of the true entrepreneur. The former
Prince of Wales, the late Prince Edward, reputedly had it in good measure
- even before he became entangled with the American divorcee who cost him
Thrift and frugality
Historians report that Edward's father, King George V, was well-known
in royal circles for his thrift and frugality. And he tried to instil these
qualities in his eldest son. However, the Prince, much to his father's dismay,
was something of a spendthrift.
While at school, Edward wrote to his father to plead for an increase
in his allowance. The King responded by sending
his son a stern note of reproval. He urged the Prince to change his ways
and 'learn to think like a businessman'.
Couriers subsequently delivered a note from Edward to the King at
Buckingham Palace. It read: 'I have taken your advice. I have just sold your
letter to a collector for 25 pounds.'
chutzpah. Here's another example.
When the parents of eight-year-old Samantha three a party, they
allowed their little daughter to stay up late and watch the fun.
But there were strings attached.
Samantha had to receive and hang up the guests' coats as they arrived.
Unobserved, she quickly slipped into the kitchen for a saucer. She then place
a lone 20-cent coin in it and left it on a ledge in the hallway. When the
first guest arrived, he gave the little girl his coat and, noticing the coin,
put a 50-cent piece in the saucer.
After the party, when the last guest had departed, Samantha's astonished
parents found her counting her profit for the evening: R22,70.
Little Samantha displayed all the qualities essential to successful
- the courage to tackle risks;
- the desire to provide first-class customer service;
- the desire to make money, and
Businessman of the Year
These five elements form the only common link between the success
of urbane, well-educated Ackerman and that of fellow South African go-getter
Herman Mashaba, 1994 Businessman of the Year.
Ackerman challenges Peters' entrepreneur theory. On the other hand,
Mashaba, who guides the destiny of the Black Like Me range of beauty products,
almost makes a mockery of Drucker's contention that managers trained by big
business make the best entrepreneurs.
After matriculating, Mashaba needed to find the cash to survive.
So he took to the streets. Becoming a wheeler-dealer, he traded - sometimes
illegally in terms of the country's repressive racial laws - in anything
on which he could lay his hands.
'When I think how the government plotted to keep us [blacks] stupid,
it makes me mad with rage,' he told Linda Shaw in Sunday Times Magazine (January
27, 1995). 'Now I find myself in a situation where I have to run an entire
company with no idea of how to do it. I have to rely on my
instincts, and hope the advice I'm given is good.
'But, strictly speaking, I'm unqualified for the job I do. And that's
scary. Not to mention frustrating.'
Mashaba is the type of hands-on business person who American business
journalist Tom Hickman calls 'a seat-of-the-pants, shirt-sleeve opportunist'.
But Mashaba also fits Drucker's more formal definition of an entrepreneur
- at least to some extent - in that he's not afraid to ask for help.
As the internationally renowned management consultant puts it:
'He knows enough to know what he
Characteristic of the entrepreneur breed described by MacManus in
the quote at the head of this chapter is Sol Kerzner. He introduced entertainment-starved
southern Africa to better-than-Las-Vegas-style night life by providing raunchy
shows, casinos and five-star hotels in the now defunct TVB states.
Belying his pseudo-American accent, Kerzner stems from a typical
middle-class white South African background. Mom and Dad ran a popular family
hotel in downtown Durban.
After university, the young Kerzner saw the potential in the then grossly
under-exploited and under-developed tourist industry. And, despite criticism,
he took a number of
breathtaking risks to launch a complex of luxurious hotel, casino and entertainment
resorts that today extend far beyond the shores of Africa.
I said earlier that Ackerman and Mashaba share five common attributes.
I was wrong. There are six. And they share it with Kerzner and all successful
Entrepreneurs make things happen. And they get
personally involved in the action.
So activate yourself ...
BECOME AN ENTREPRENEUR
An American business writer, Mark Hendricks, describes employed
people who initiate their own projects in-house as
'Advocates of intrapreneurship,' he reports in
(July 1994), 'say it can keep restless would-be entrepreneurs satisfied as
employees, tap reserves of creativity and talent that would otherwise lie
fallow, and allow companies to do things they couldn't otherwise consider.'
It isn't a new idea.
Harvard Business Review
back in the early 1970s. And bookseller-cum-business author
Gifford Pinchot outlined the concept in his book
Why You Don't Have to
Leave the Corporation to Become an Entrepreneur (Harper & Row).
Pinchot, who runs a small training consultancy outfit in partnership
with is wife in Branford, Connecticut, doesn't just sprout theory. He put
his money where his mouth is when he gave an employee the nod to freelance
from within the company.
Linda Desrosiers takes home a monthly pay cheque signed by Pinchot
from the training consultancy. But he encourages her to sell the books he
has written on the side for a share of the profits. The arrangement calls
on Desrosiers to rent a warehouse to store inventory for her own account
and pay her own packing and postage costs. She also sends out her own invoices
and collects the money when it falls due.
Closer to home
Let me give you another example - this time a lot closer to home.
Nicole Sinoff, who now runs her own successful advertising consultancy, wasn't
exactly an entrepreneur. And she wasn't exactly an employee.
She was both.
Officially Nicole was an account executive with Adlab, an ad agency I established
and ran in Johannesburg for several years. Although I was responsible for
paying her salary, I encouraged her to think like an entrepreneur. So, like
any self-employed business person, she identified her own markets, made her
own pitches to potential clients, contracted creative talent to render the
ads, dealt with reproduction houses and media representatives and made arrangements
to collect moneys due.
And, of course, she reaped her share of the profits when things went well.
While Nicole is now a fully-fledged entrepreneur, when she worked for Adlab
she fitted the Pinchot description of an 'intrapreneur' - a person who
runs an entrepreneurial business inside a business.
So, if your employees have the aptitude ...
LET THEM GO FOR 'INTRAPRENEURSHIP'
ENCOURAGE EMPLOYEE INITIATIVE.
The arrangement I had with Nicole and the arrangement Pinchot had
with Linda were both informal. In both cases the lines dividing employer
and employee were far from clear.
|One such company is the $17-billion multinational giant Xerox Corporation.
Xerox looks very carefully at proposals for new business undertakings put
forward by employees. In 1989 it even set up a special division, Xerox Technology
Ventures, to concentrate solely on appraising and funding employee-generated
ideas that have profit potential but don't quite fit in with the company's
mainstream business strategy.
tiered on relatively
structures, are beginning
to realise the value
of exploiting employee
A Xerox engineer, Denis Stemmie, invented a portable, battery-powered, plain
paper copier. Xerox Technology Ventures thoroughly checked out his idea,
liked what it found and financed product development.
The benefit to Xerox: it had an innovative product to penetrate a market
segment that it hadn't thought of.
So don't give ideas from your employees the brush-off ...
ESTABLISH AN IDEA BANK AND GIVE EVERY IDEA
YOUR FULL CONSIDERATION
ENCOURAGE THE DEVELOPMENT OF SPIN-OFF COMPANIES.
When Xerox Technology Ventures agreed to finance Stemmie's plan
to produce a go-anywhere plain paper copier, it urged him to manufacture
and market it himself under another name. So,
with the Xerox Corporation's blessings and material help, the engineer established
a spin-off company.
QuadMark Copiers made its début in the market by unveiling its $349
portable copier at the Las Vegas Consumer Electronics Show in January 1994.
As part-owner of the fledgling company, Xerox will share in the profits.
In return, Stemmie can rely on practical help from Xerox.
Although the multinational supplied the start-up capital,
QuadMark isn't part of Xerox. Financially, it has to stand on its own two
feet. If it doesn't hit its sales and financial targets, 'big brother' is
unlikely to bail it out. Stemmie will either have to find additional capital
- probably by selling off some of his shares - or by folding the operation.
So, if it looks good ...
LET IT FLY SOLO
LACERATE RED TAPE.
Nothing strangles initiative, innovation and creativity more than
Red tape is a
symbol of the worst
type of bureaucracy
in both the public
and private sectors.
|When active, it's characterised by tortuous, inefficient paths of
The path from the top downwards is often choked with meaningless directives
of the 'thou shall' and 'thou shall not' type.
And despatches sent on the upwards path, which seldom works, are commonly
At many South African companies, plans are hatched in the boardroom. Captains
of industry and commerce firmly discourage the breeding of ideas at lower
But progressive companies overseas have discovered an untapped source of
They're siphoning off a rich crop of ideas that have long remained buried
in boiler rooms.
One of those to strike pay dirt is Jack Stack, chief executive officer at
Springfield Remanufacturing Corporation. He has introduced what Jay Finegan
describes in Inc (March 1995) as a revolutionary management system
based on the philosophy that companies can thrive if they tap into people's
universal desire to win.
|Stack claims he snatched Springfield, formerly a division of International
Harvester, from the jaws of doom in 1983 by giving everyone in the company
a say into how to run the business plus a stake in the financial outcome.
In 1979, the International Harvester board told Stack, then employed as the
plant manager, to shut down Springfield. Four years later, he and 12 fellow
managers offered to buy out the division for $9-million in what he calls
'one of the most lopsided, leveraged buyouts in corporate history'.
The 13 new owners managed to scrape up only $100 000 between them. So they
had to borrow $8,9-million - a debt-to-equity ration of 89:1.
an 'open door'
employees at all
levels to pop in and
kick new ideas around,
you'll be surprised at
from the shop
Although the bank they approached thought that they were 'brain
dead', it lent them the money. At the end of the first three months, according
to Stack, the company had 'a negative net worth'.
To stave off almost certain oblivion, Stack and his co-directors created
a planning ritual that focused on controlled, predictable growth and operation,
and the creation of wealth.
Nothing new or earth-shattering so far.
Almost every company in existence - and most that are no longer with us
- have the same focus. What was different about Springfield was the new
management's insistence that every employee contribute to planning. And to
encourage participation, the company introduced a bonus that rewarded those
who helped in planning and hit the targets they set for themselves.
Stack calls his system of control 'open-book management'.
- gives every employee unimpeded access to the company's financial
- encourages workers to monitor the progress of their plans, and
- includes a stock ownership scheme that gives every employee
a stake in the financial success of the company.
supervisors get together
with all the workers every
fortnight to discuss the
|'There's so much finger-pointing in business,' Stack observes. 'People
say "It's their fault," or "Those guys in sales are bums". But if you get
people to buy into the plan, they develop a sense of ownership. It becomes
Springfield executives consult employees on everything, even proposed capital
Stack points out that the workers know what the figures mean because
the company trains them to think, act and plan like owners. Springfield,
in fact, spends more on the financial education of its workforce than it
does on job or skills training.
Does it work?
|Let the figures speak for themselves.
When Stack took over as chief executive officer in 1983, the company
turned over $16-million a year. This had rocketed to $105-million by 1995.
Over the same period, the workforce grew from 119 to 750.
So slash the tape that constricts and ...
know what is at
what is to be
they can make a
LET YOUR PEOPLE HELP WITH PLANNING
If you want to run your own show in a company with a streamlined
'new look' profile, you're going to have to...
to lead, not manage.