Introducing the corporate entrepreneur

Picture a typical entrepreneur. What springs to mind? Probably a hybrid of Richard Branson, Steve Jobs and a millennial doing something mysterious with social media in a trendy co-working space. And what link all three of these are innovation and risk: they notice problems in the world and want to fix them, and they commit time, money and skills to something that is essentially an experiment, with no guarantee of a return.

Whoever you pictured, I’m fairly sure you didn’t picture yourself, or any of your colleagues. In fact, many company bosses get a bit squeamish mentioning the ‘e’ word at all, thinking their best people will drop everything and head to the closest hipster coffee shop to launch a start-up.

This is a short-sighted and limiting point of view. For one, start-up life is not for everyone: I know, I’ve been the guy with the idea to fix a problem I’d spotted, working from my garage to get a new business off the ground. Taking risks on someone else’s dime is very different to putting your own house on the line! And the latter is not an attractive option for most. And, more importantly, harnessing employees’ entrepreneurial spirit and tapping into their innovative mindset is a critical success factor for companies wanting to survive these tough and rapidly changing times.

These are the employees that are going to see problems and fix them before your organisation and customers even realise an issue exists.

These are the employees that are going to do the equivalent of Steve Jobs starting work on an iPod that you can use to make calls, even as Apple launched the very first iPod in 2001.

These are the employees that are going to see the opportunities when a competitor such as Uber disrupts your market. They are the opposite of London’s black cab drivers, who responded to Uber with calls to have the taxi hailing app regulated to the same levels of inefficiency that their 160-year-old business operates at.

They are also going to figure out how to make your business run better. This is as important as outward facing innovation. You know that business runs in cycles, and decisions that made sense five or ten years ago may not be relevant anymore. Consider the endless ebb and flow between outsourcing and insourcing; centralisation and decentralisation; horizontal integration and vertical specialisation.

Now layer on today’s massive disruption, driven by the velocity of technology, and the advances you made last year might already be out of date. Look at deliveries: you’ve probably sold off your fleet of delivery vehicles and now outsource this function. But are you considering that sooner than you think, drone deliveries might be the new normal?

Businesses that don’t take an entrepreneurial view of their internal or external operations are going to be left behind. Stop thinking about entrepreneurship as something that happens ‘out there’ and start discovering the entrepreneur within.

TOP TIPS FOR UNLEASHING THE CORPORATE ENTREPRENEUR

• Entrepreneurship starts at home: look at the way you are doing things today and ask if you can do them better.
• Focus on a niche market and experiment. It’s OK to break stuff as long as you learn.
• De-risk innovation by knowing what you can play with. Don’t put your whole business in jeopardy.
  Published in ASA Magazine March 2017 http://www.accountancysa.org.za/viewpoint-introducing-the-corporate-entrepreneur/

The ICT key to your clients’ hearts and minds

Typically information and communication technology (ICT) is one of the largest line items on any company’s income statement. For most organisations, it is second only to salaries. And it’s growing. According to analyst house Gartner, ICT spend in South Africa is forecast to hit R272 billion in 2016, which is 3,8% up from 2015. Software, specifically, is set to reach its highest year-on-year growth at 11,4%, or R25 billion.

And, based on predictions around the rise of the machines, and how automation is going to take over many tasks that are carried out by people today, this spend is going to keep on rising – probably even cannibalising salary spend.

What does this have to do with accountants? You just check the numbers, right? You don’t decide where the money is spent. While this may be the case today, you need to ensure you stay relevant tomorrow. And as an accountant, you and your firm are probably looking to add more value to your clients. You’re exploring ways to offer enhanced services over and above the ‘grudge’ purchase of audits and other mandatory financial services, in order to entrench yourself as a valued, strategic partner in your clients’ businesses.

I’d suggest thinking strategically about your clients’ ICT spend is a good place to take the lead. Increased involvement with this crucial, and massive, cost centre could hold the key to a more meaningful, closer, accountant–client relationship. One where your client comes to you for strategic advice and input, and, come the big deals – acquisitions, mergers, IPOs – you’re called in to get involved sooner rather than later.

With ICT spend such a big, and growing number, on any income statement, it’s an area where you can help effect big number changes. What’s more, the turbulence and disruption in the business world at the moment, thanks to digitalisation and the urgent need for businesses to transform themselves into digital economy operations, means that what worked a few months or years ago, has very likely been supplanted by a better option at a more affordable price or with a more relevant payment structure.

ROI: A PIPE DREAM, OR A REALITY?

You can start by helping your clients measure the return on investment of their current ICT systems. Is ICT ROI something your clients even check? Three to five years later, have the ICT products and services delivered what they promised? Have the software, hardware and related services really added value to the business? And don’t forget to factor in the total cost of ownership several years down the line, not just the initial outlay.

CONSULTANTS ANONYMOUS

A key marker here is finding out to what extent the user-friendly solutions your client was sold have transformed into ‘black box’ solutions, where, even five years after installation, experts still need to be called in to make changes to the so-called flexible systems.

This situation is in no way delivering optimal ROI. Today, software should be user-friendly and enabling to ensure that, once it is installed and the users are trained, your client should be able to self-manage day-to-day and month-to-month changes. Otherwise, it’s like going to the doctor for a head cold, and getting them to blow your nose!

BEWARE THE BELLS AND WHISTLES!

Then, is your client using all the bells and whistles they were sold on, or are they only using the essential 5% but paying for everything? It’s an easy trap to fall into. Think back to the last time you bought a car and were wowed by the functionality of the on-board computer. Or the fact that the wing mirrors have a defogger and the seats, a warmer. And then think about whether you really use all these features of your car. Being realistic and rationalising what the company actually needs, and only paying for that, is going to dramatically affect the procurement decision and the ultimate ROI.

LOOKING INTO YOUR CRYSTAL BALL

The biggest challenge any business faces is that they need to make decisions today for an uncertain and rapidly changing digital future. Indeed, futurist Ray Kurzweil says (no surprise here!) the pace of technological change is accelerating. This is because each iteration of tech builds on what has happened before, and so each step forward paves the way for even better technology in the future, resulting in the rate of progress from version to version speeding up at exponential rates.

To take an example from the non-business world: think about how fast, and with increasing speed, how we consume music has changed. From vinyl, to more portable cassette tapes on Walkmans and car radios, to better-quality sound on CDs. And now, MP3s that we simply buy and download off the Internet, wherever we are. And although we loved our iPods, very soon there was need for an external ‘container’ or playback device: today we store and play music on our laptops, tablets and smartphones. But even this is soon going to be old-fashioned. Thanks to dropping data costs and increasing bandwidth, streaming music from the cloud is going to become standard. No need to store files locally, or curate your own playlists. Rather listen to what you want, when you want it, on the go.

Unfortunately, on this one I don’t have a quick answer or top tip for you. Apart from recommending that you be mindful of the rate of change we are experiencing, and advising your clients accordingly. Quiz ICT service providers on how they future proof their products and services. How open and adaptable are they really?

While vinyl has made a comeback amongst hipsters and music purists, it’s unlikely that retro business software and practices are ever going to be a sensible choice for a successful business.

All businesses are IT-enabled businesses today. And neglecting ICT for any length of time could be costing your clients dearly. But pay it attention, keep on top of changing legal, regulatory, skills and business requirements, and ask how ICT can support these, and you can gain big wins for, and big love from, your clients.

Published in ASA Magazine February 2017 http://www.accountancysa.org.za/focus-this-month-leadership/#ict