Scalabity – Biggest Challenge for African SME’s – Dr. Otabil
• The major critical factor that businesses in Africa have to master is scalability • For a business to scale up it must have a clear expansion agenda. • Regulatory frameworks favour foreign as opposed to local business leaders
One of the major critical factors that businesses in Africa have to master is the concept of scalability, Dr. Mensa Otabil said on 15 June at a breakfast of champions session at the Intercontinental Hotel in Lusaka, Zambia. Scalability is the ability to grow bigger and wider and only a few businesses in Africa have scale.
Dr. Otabil revealed that the largest business segment in Africa were the Small to Medium sized Enterprises – SME’s who only employ a handful of people. Only a few businesses, employ one hundred (100) people and that is harsh reality Africa is faced with, he said. The reason why this is so is that ‘we are unable to create scale-to expand larger and wider.’
Dr Otabil outlined three key pointers that would facilitate scalability of business and these are listed below as:
Having business idea very significant and powerful. Not every business idea can scale up, the reason being that the pool they function in may be limited. Most people will encourage business owners to work with church members or family - but clearly that concept is myopic. Business owners need more radical ideas enough to drive significant and powerful businesses.
Having the ability to conquer and control territory/territories. Dr. Otabil stated that business was about conquering and controlling territories and hence business owners need the mindset aligned to this.
“If your talent pool is shallow you will fish in shallow waters and you will not get the right people to lead what you are trying to achieve.” “We could not be granted clearance to offer Doctorate in Pharmacy at the University all because the oldest state University did not offer the PHD Program in Pharmacy. We used the media to fight for years until we were allowed to offer the program” Dr Otabil said.
Having very influential ideas.
For the above listed (3) things to happen, the mindset of the business leader has to undergo change, he said.
Dr. Otabil advised that the best time to start a business is at inception of ideas, before anyone taps into the space or market. That way a business leader comes in first and defines the market thereby yielding instant recognition. When one starts a business late, the idea would have already become popular and outrun its time of usefulness. This is what you get for getting into a business when the wave is cresting and as such one grapples with scaling up.
One of the best advice Dr. Otabil recommended to business owners was not to limit opportunity to shallow talent pools in the search to get the best people as it then limits our scalability. Once talent is identified, it has to be appropriately remunerated, even if it means paying them a salary or reward that is higher than a business owner. Without realizing it, you might be paying them more but they are creating for you, business wealth and opportunities. Sometimes the talent that a business requires has to be preferred over you. Cheap talent ultimately builds a cheap business. Every business has its "lightning rods"- people who will attract and influence a certain quality of people into your company.
To scale up, a business leader has to learn to fight off opposition. These include uncomfortable internal fights with employees; external fights with the regulators and competitors.
The regulatory environment that controls businesses in our part of the world is designed for us to never own big businesses. Most African governments are uncomfortable with big businesses in their countries and would rather the powerful people be foreigners instead of locals of the country. If the foreigner attains great wealth, they are not a threat to the politics of African nations however locals amassing wealth is seen as a threat as they could easily gain political mileage that could shift election results. It is in the government's best interest that African businesses remain small and only employ a handful of people to never scale up. The concept of competition is a critical aspect of business leadership. It survives to business peril. In order to scale up, a business leader needs to learn to fight. It is very important to make amendments to the rate of change and adaptability is critical for the growth of a business. As such what worked (5) years ago might not work now.
Businesses must learn to defend what they have achieved and acquired. Top priority in any business leaders mind is profitability which may sometimes require that some staff are let go off in difficult times.
A vivid expansion agenda is critical for scalability. Dr. Otabil cited Jesus’ clear expansion agenda, where he told his disciples go out into the world. As such Dr. Otabil advised that if a business leader wishes to take over the world, adaptability is key. The mindset of a leader in business must be one that is expansionary. If you look at the Jesus "enterprise" and how it functioned: it stayed in Jerusalem for a long time, 10 years after Jesus died. The disciples were performing miracles but moving nowhere. They had built a great business but no skill so God had to force them out through persecution. It took one man to bring skill to Christianity: Paul. Paul was adaptable, he could preach the word without quoting the scripture. When he spoke to people who had no reference to the Old Testament he had to use their poetry to communicate Christ to them. But eventually Paul created a new dynamism for this "enterprise" so that it could go to places Jesus wanted it to go.
So then how will a business leader expand to other countries? Who should be employed to make this a reality? Dr. Otabil advises that the right people have to be chosen for such an expansionary program lest business leaders get stuck and will never grow. Every business that has expanded has learnt to adapt.
In scaling up there will be opposition in the form of resistance and strongholds. Strongholds are defined as products or ideas that have already been established before a business came onto the scene. However, Dr. Otabil advised that strongholds must be pulled down. Dr. Mensa Otabil is a Pastor, Lecturer, Author, Consultant and a motivational speaker. He is the Chancellor of Ghana’s premier private University: The Central University College (CUC) hiring over 500 staff.
Dr. Mensa Otabil Chancellor of Ghana’s premier private University: The Central University College (CUC).