Originality is the new business way
There are very few good books about business written in the world. Most seem to be exercises in futility: lots of seemingly well-educated people telling you the blindingly obvious and making it sound like a dramatic breakthrough in management thinking. The style of writing covers the full spectrum: from painfully dull to messianic. But most business books fail the basic business test: they provide no return on investment.
One book that came out in 2006, however, is worth the effort. Mavericks at Work, by William C. Taylor and Patty LaBarre, is a very interesting read. This engaging tome, picked by The Economist as one of its Books of the Year, showcases companies (mostly American) that are breaking the mould of business through original thinking.
The authors tell us about mavericks: innovators and upstarts who believe in the unbelievable and whose strategies break new ground. These mavericks may well be pointing out a better way to do business: a better way to lead, compete and succeed. Business as usual is a bust, say the authors. The old guard is cutting back and losing ground. That may be overstating it, but there is no doubt that new models of business are emerging thick and fast in the 21st century, challenging conventional wisdom in profound ways.
Consider ING Direct, a maverick US bank. It has no branches, no ATMs, no current accounts and hardly any loan products. A recipe for failure, says the conventional wisdom. 15 million customers in just 5 years and the highest ratio of assets to employees in the industry, says ING Direct. How? By leading a charge back to the ‘fundamental values’ of thrift, security and self-reliance. Its offering is centred on a high-interest, no-frills savings account, accessed via the Internet or telephone. And it makes money.
Many, many mavericks are exhibited in the book. HBO, a cable TV network, is renowned as the most original force in mass entertainment television because of its maverick programming in a ‘me-too’ world. Craigslist, an online bulletin board, eschews the hype of Internet businesses and runs a bare-bones operation: its values are centred on words like ‘common sense’, ‘keeping things simple’, and ‘down-to earth’.
The bottom line is that there is a bottom line. These mavericks make money! HBO has a subscriber base of 28 million households, and recently broke the US$ 1 billion profit barrier. Craigslist, a tiny affair of 20-odd people that never needed any venture capital, receives more than 14 million new classified ads and 15 million visitors every month, and is thought to be worth US$ 100 million.
These people make money because they are not just mavericks for the sake of it. They are not mere rule-breakers: they are constructing alternative realities. They are driven by an unusual purpose, true: but they design effective business models that remain true to their philosophy, and deliver shareholder value.
We do not necessarily need to look far in our search for successful mavericks. Kenya’s Equity Bank is one in our midst. It started life as a humble local building society and went through the usual tribulations, but is now a very profitable, publicly listed enterprise. It has just enrolled its one-millionth account holder – a remarkable achievement, and a first for the region.
Equity did it by engaging in maverick thinking. When all banks were running away from the lower end of the market by closing branches and imposing fees and minimum balances, Equity was going against the tide. It was going into rural areas with branches and mobile units, and enrolling customers en masse. The big bankers scoffed over their cocktails and canapes. They are choking and coughing now, belatedly thinking up ways to go back to the masses they abandoned.
What’s Equity’s big idea? It has made banking open and accessible to the humblest customer. A visit to its rural banking halls will confirm the bank’s unique emotional bond with its target customer base. The regular Kenyan feels at home at Equity, not out of place. It has become part of people’s ordinary lives, without being in any way ordinary itself. Its remarkable growth, massive investment in an IT platform, and unique corporate ethos are testimony to this. Walking around Equity, you’d think you are observing a movement rather than a corporation.
There are lessons here for Kenyan entrepreneurs. Don’t be afraid to question received wisdom. Don’t prostrate yourself before old-guard ideas and concepts. Think for yourself, and break away into new ways of doing things. Work out what’s wrong with your industry and what makes customers angry – and construct a firm that fixes it. Don’t always look at what others have done; look at what they haven’t done.
But there’s one bit of conventional wisdom you can’t break. You ALWAYS need an intimate connection with your customer; you ALWAYS need to serve your customer in ways that others can’t match. Other than that, break every rule in the book.