Friday, 4 September 2015

GOOD CHARACTERISTICS ASPIRING WORLD-CLASS COMPANIES MUST HAVE

Research conducted by Tectono Business Review has shown that entrepreneurs with a strong business sense contribute to societal change and a nation’s economic prosperity. These high-performing people are seen transforming the sector where they find themselves and setting the pace for incumbent businesses in the industry.

In Nigeria, for example, small businesses provide jobs for the teeming youths in the country and contribute significantly to the Gross Domestic Product. Micro, Small and Medium Enterprises in Nigeria have been discovered to outnumber large enterprises; therefore funding support is increasingly being directed at them.

There is a high probability that these contemporary enterprises can completely outperform large, old-fashioned businesses, because of the innovative ideas they bring along that are in tune with the present generation. Outstanding entrepreneurs have the ability to grow faster, create more jobs, contribute more to society and transform industries to a greater extent than their peers. As a result, their lives and businesses are worth studying.

In a survey of about 600 firms at the Ernst and Young “Entrepreneur of the Year” contest conducted by the World Economic Forum, insights into the characteristics of high-impact firms were gathered.

They introduce innovations
The World Economic Forum report states that high-impact entrepreneurs target new ways of pleasing their customer through the use of innovative approaches. This is achieved by exploring results from scientific research and development, especially in areas of technology and life sciences. Using these approaches, this group of business people invents new business models that disrupt traditional businesses and proffer solutions to problems affecting consumers.

They create jobs regularly
The 628 companies studied by Ernst & Young created approximately 162,000 net jobs over the most recent two-year fiscal period prior to the competition. Evaluating the ‘Entrepreneur of the Year’ applicants by age, the survey reveals that employment gains sustain momentum as these companies mature, thereby reflecting their relative size compared to younger firms. They are increasingly focused on building business infrastructure to meet customer demand and new opportunities. It is a good illustration that when it comes to job creation, a narrow focus on early-stage companies would be misguided.

They create wealth
High-impact entrepreneurial businesses create significant wealth for successful founders. About two-thirds of the annual business people featured on Forbes billionaire list built their own fortune in this manner. A hallmark of high-impact entrepreneurship is the goal and ambition of their enterprises, and this has created a significant impact on local economies, which have allowed others to share in this wealth creation.

They give back to the society
High-impact entrepreneurs often make a difference to society beyond their immediate business model or innovation. This is a particularly important characteristic, as many high-impact businesses operate in network economies (or even create them). A company like Facebook has clearly changed the way people communicate and share stories with each other and has also created a group of developers that designs features and applications for the platform. In addition, it has made it easier for interest groups to coordinate among each other, and therefore, arguably has a major influence on how societies govern themselves, it adds.

High-impact entrepreneurs often take an interest in society’s problems – targeting areas such as the environment, poverty reduction, education or sanitation. A whole field of ‘impact entrepreneurship’ and ‘social entrepreneurship’ has evolved over the last decades.As it is being done in the country by the Future Africa, LEAPAfrica, Fate Foundation and other consulting firms, mentorship, which creates a platform for grooming the next generation of high-impact entrepreneurs, makes the model sustainable.

Role models such as Virgin’s Richard Branson or easyJet’s Stelios Haji-Ioannou have impact far beyond their own enterprises on whole generations of budding entrepreneurs. Such effects is of crucial importance when creating entrepreneurial ecosystems in emerging markets, and has made them a core principle of their operating model.

Google organises information on the web
An example is Google, whose founders, Sergey Brin and Larry Page, launched the company with a mission to organise a seemingly infinite and unstructured amount of information on the web. In only 15 years, Google has grown to over $50bn in annual revenue and has been instrumental in delivering improvements that provide radically better access to information for both consumers and other businesses. Moreover, research has shown that high-impact entrepreneurs find new sources of clean energy, create consumer products (food/beverage, apparel) or develop mobile applications to enhance the way consumers communicate and access information or entertainment.

Amazon invents better distribution channel
High-performing entrepreneurs invent or enhance business and distribution models that lead to lower costs for consumers. An example is Amazon.com. Contemporary businesses often disrupt existing industries and create significant friction with incumbents that struggle to deal with the new competition. Often a key challenge for young high-impact firms that require significant determination and stamina from their founders. 

Of the many stories that entrepreneurs can tell, Richard Branson’s battle when trying to start a new airline (Virgin Atlantic) from scratch in an environment of nationally backed carriers has to be one of the more impressive examples, though by no means the only one.