On November 21 in Nairobi, they held a mixer – or a networking event dubbed The Road from Employee to Employer with an address by Dr. Mulengani Katwalo, the director of theInstitute for Strategy & Competitiveness (ISC) at the Strathmore Business School.
His talk centered on what local entrepreneurs/business owners can change to enable them to succeed in business. Success is not about starting a business – as anyone can find business plan on the Internet – with the unfortunate result that that 60 – 70% of entrepreneurs fail in the first year. This is because they behave like athletes who try to go from starting to running, but who don’t warm up first:
Entrepreneurs can make changes in six areas to ease the transformation
1. Training/skills development: Many entrepreneurs may have the drive, and the money but lack some skills, necessary to understand customers, and make a transition to understand their business/industry to take it to the next level. They should engage in short courses, but more important they should contribute to the agenda of education. E.g. by working with universities to set the learning curriculum for business such as the local tourism sector.
2. Innovation : Entrepreneurs do not engage in research & development (R&D)(by show of hands no one in the room was engaged in R&D departments/capacities) - and there are no budgets for new ideas and creations. Entrepreneurs need to embrace the process of buying and selling knowledge. If you have a good idea and cannot use, can you sell it?. The developed world is about exchange of ideas, not just goods & services. We need to convert ideas into cold hard cash.
- Entrepreneurs should know there is nothing wrong with copying, benchmarking, or reverse engineering. E.g. the Nyayo Car may have succeeded if it had been built in collaboration with a Japanese company and with just a Kenyan name. That’s how Tata rose to become a world leader in the sector. Presently there’s still a local mindset that doing imitation is inferior.
- In business, be brave enough to learn, pick an idea and use it. The patent for kyondo (baskets) is owned in Japan, and when you see Japanese tourists taking photos, a lot of them act as blueprints for products
- Innovation is crucial, but its not about going to the lab only – its about getting new ideas and converting them into products and services e.g. in Kenyan hospitals, while equipment is new, there has been no innovation in service
- Entrepreneurs should not stop innovating: Once you make enough money – the tendency is for many to move to big (Karen) houses, buy big cars, get new wives etc. They don’t create legacies that sustain wealth, so that every generation has to start over again.
3. Culture: There is a bad (local) attitude and perception that needs to change specially in regards of treatment of customers. This bad Matatu treatment towards customers, as though entrepreneurs are doing them a favour is bad for business. Entrepreneurs do not owe customers a favour - they are providing a service, which customers are paying for. Until our customer service changes to reflect this change in attitude, we will always be second best. In other countries, even if someone doesn’t like you, they will serve you and take your money – and ensure you (as a customer) keep coming back.
- Customer acquisition skills are poor – entrepreneurs do not keep up with innovation in the industry, they don’t read much. There's a lazy tendency to finish work, go to bar and then sleep. To be a world-class entrepreneur, you must make sacrifices, take make deliberate efforts such as take courses to develop management skills and read books otherwise they will always remain second best.
4 Neighborhoods If you don’t know your market, you will always be the village beauty Entrepreneurs need to know what opportunities exist beyond their neighborhoods or they will never take advantage of them. Do you look at your market as the Westlands area (a Nairobi suburb) or the 100 million + people in the greater East Africa – Congo, S. Sudan, Somalia? Only those that have eyes, can see the market, like the South Africans who have invested here in Kenya.
- It's also a perception issue, when you see people – do you see market or problems – what is your attitude towards expansion? Exporting to Europe? etc.
5 Cooperation or competition - This is an increasing trend in the business world to cooperate rather than compete – because not all your competitors are your enemies. This can also work in knowledge exchange (there’s appears to be a marketing understanding in Nakumatt and Tuskys, though both supermarkets, are not competitors as they target different clientele
6. Cooperation - working in networks (like Tujuane, clusters, create linkages, exchanges etc. as individual businesses do not exist in isolation – so entrepreneurs should network with related companies. We had a stimulating group discussions in which participants listed reasons for joining a network as among others - get contacts in the industry, socializing [with like minded people] as they are very busy, Learn new ideas[raises competition], Synergy, Pooling of resources/barter of services & goods, learn new opportunities and for moral support [e.g. for freelancers who work from home]