BEE Partner, South Africa Economy Watch

Investment No.1: Invest in time and resources that take a global viewpoint

This does not necessarily mean having business representation in multiple geographies, but it does mean treating the world globally and not multi-domestically. South African business organisations need to take a global view of their business and understand the global dynamics of their industries, especially in relation to the development and implementation of company strategy and the search for competitive advantage. Even companies that are operating purely in the domestic business environment have to take this approach, as globalisation will impact on the way they do business. Part of this global viewpoint is being realistic. South African companies and the media often build themselves up to be more important in global term_sthan they really are. Confidence is an important aspect of taki_nga company global, but overstating one’s true position can play a detrimental role in a company’s growth. The South African media are often guilty of feeding the ego of corporate South Africa by positioning them as important players in the global business framework. Whilst we may have a handful of companies that are close to being considered global players, the vast majority are small and/or medium by global standards, and this has an impact on the strategic alternatives they can employ. Getting oneself into perspective is the starting point for this. Remember the teaching of Sun Tzu: ‘If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself; you will succumb in every battle.’

Investment No. 2: Spend time inviting criticism

Be prepared to invite criticism from as wide a field of stakeholders as possible, and then use it to improve the company, its strategy and its competitive position. Also be self-critical and transparent about what has to be done in order to improve competitiveness. In many companies, senior management shuts out the vast majority of employees, and in doing so denies itself the opportunity of tapping into an enormous reservoir of expertise and knowledge. Inviting criticism does not necessarily mean conducting massive customer- research surveys. It is indeed important to talk to customers on a regular basis, but rather tap into their intellectual capital.

Due to the Internet explosion, global competition has intensified, given the vehicles now available for customers and consumers to talk about a company and its products. For decades, companies have `talked’ to their customers via traditional marketing research methods. Today, millions of consumers worldwide talk to one another via Internet sites, forums, e-mails, bulletin boards and community sites i_n what can only be described as a global conversation. Views are exchanged about products, services and brands. Complaints are discussed. Opinions are sought. Progressive companies throughout the world view this behavioural pattern as a resource, and are tapping into it in any number of creative ways. In essence, in an effort to stay one step ahead of the opposition and to become more competitive, far-sighted organisations are inviting their customers and consumers to contribute in a direct manner to what will be designedand produced.

Companies have also identified that many of these customers and consumers are extremely proficient in computer and software technology, and are not shy about creatively utilising their skills to talk to other consumers and customers about companies and their products. Dubbed by many marketers as Generation C consumers, they have become a vital resource in helping to shape the future direction of brands and companies alike. By tapping into the intellectual capital of their customers, in a collective fashion, and working in close cooperation with the Generation C consumers, competitive-minded companies are creating for themselves a potent strategic resource via two-way communication.

For example, famous brands such as Coors Lite and Mercedes Benz have enlisted the help of creative customers in co-creating advertising campaigns. Boeing, the world’s largest aircraft manufacturer, established an Internet-based global forum called World Design Team. In 2003, 120 000 people signed up to participate. There, they can talk with the Boeing design team about their likes and dislikes of air travel, and what they would like to see in their dream aeroplane. These customers are helping to create the aircraft of the future.

Nike, the world famous sports-shoe brand, talks with its custom_ersaround the world via its chatroom NikeChat, where suggestion_s, criticisms and the exchange of views are openly encouraged. Philips, the Dutch electronics giant, has established the Philips Streamium Café, where owners of Philips WiFi TV sets and hi-fi systems can provide Philips with feedback and suggestions on the products.’ From computers to aircraft, travel to shoe design, companies intent on becoming and/or improving their level of global competitivenes_sare working in close cooperation with creative-minded customers who can provide them with better direction in the marketplace.

Whilst this line of thinking may not be new, it is gaining wider acceptance in the global business community as companies seek to break out of traditional models of serving their customers, and to redefine the relationship between customer and brand. Simultaneously, customers throughout the world are becoming more and more empowered in their buying behaviour, given the resources now available for gathering information on their potential purchases. Because of the collective nature of consumer intellectual capital, companies are finding that it is a powerful driving force that helps to drive change and innovation — two critical factors in the quest for global efficiency and competitiveness.

It is equally important to talk to other stakeholders, such as employees and suppliers, in order to obtain a critical evaluation of the firm’s relationship with these stakeholders, and to identify where there is room for improvement.

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