Lauri Elliott

Originally posted at http://www.blogtalkradio.com/art-of-biz.

In this segment, we discussed a critical contributor to building a business – capital.  But, we didn’t take the normal road in discussing capital.  We spoke of social capital.  Author of “Achieving Success through Social Capital”, Wayne Baker, defines social capital as “the resources available in and through personal and business networks.  These resources include information, ideas, leads, business opportunities, financial capital, power and influence, emotional support, even goodwill, trust , and cooperation.”

However, the question concerning social capital in business is “how to translate social capital to the bottom line.”  This is where our guest expert, Verna Allee of Value Networks, really opened our eyes.

First, social capital is held within social networks.  Verna indicated that we participate in them on a personal level.  The network does not have a shared purpose working toward common objectives.  However, to maximize social capital we need to evolve the relevant social networks to what Verna calls value networks.  Value networks are people who come  together in a loose association to achieve some business, economic or social good.

Verna adds that value networks actually marry both the tangible assets, e.g., cash, buildings, and the intangible assets, e.g., social capital and human capital, to provide a complete picture of your business strength.   For example, if intangible assets represent 50% or more of the value of your business as research says, a business valued at $500,000 based on its financial would really be valued $1,000,000 at minimum.

To translate intangible assets to the bottom line, Verna says businesses need to first measure performance both in financials and non-financials.  Second, businesses need to identify the people and their roles in the value network.  Third, businesses need to identify the transaction flows, which are both formal/tangible and informal/intangible, between the roles. An example of a formal/tangible flow, or deliverable, is a product.  An example of informal/intangible deliverable is information.  Once businesses are able to identify and map these elements, they can see both the strengths and gaps in the value networks.

Value networks have tremendous power to help businesses cut costs, grow and manage risks.  For example, once the value network is mapped, an entrepreneur can identify costly and inefficient areas.  In another case, you can use the value network to identify new growth opportunities in product and service offerings.

In actuality, using social networks and value networks goes hand in hand.  However, each serves a different role.  For example, social networks are great for company, brand and product awareness activities.  Value networks helps you identify and manage ways to increase the value of your company, brand and/or product to your customers.

Take time to listen to the entire radio segment. (http://www.blogtalkradio.com/art-of-biz/2009/11/12/Power-Push-Using-Social-Capital-for-Success)

To learn more about translating social capital to the bottom line, visit http://www.valuenetworks.com.  In particular, check out Verna’s paper, “Value Network Analysis and Value Conversion of Tangible and Intangible Assets.” (http://www.openvaluenetworks.com/Articles/Value_Conversion_JIC_online_version.pdf)

To follow other topics on The Art of Making Business Happen, visit http://www.blogtalkradio.com/art-of-biz and http://artofbiz.ning.com.  To follow us in real-time, check out http://www.twitter.com/theartofbiz.

This article is one in a series about ICT in different sectors for Brainstorm Magazine of South Africa.  It was co-authored with Hilton Tarrant.

The mining sector has been slow in its uptake of technology, but the global economic crisis and long-term issues are serving as catalysts for adoption.

The outlook for the mining sector has radically changed due to the global economic crisis. This boom and bust cycle has left many mining companies considering ways to manage operating costs in order to remain economically viable. But this is not the only challenge the sector faces, according to Deloitte’s report, Tackling Trends 2009: The Top 10 Global Mining Issues. In the long run, the sector must find ways to remain sustainable amid the sea of legal, social, economic and environmental issues.

These challenges actually present opportunities for the ICT sector because technology can manage complex systems, streamline processes, reduce costs, and improve efficiency and productivity. Consider enterprise resource planning (ERP) software, which coordinates the entire mining value chain, from locating to divesting minerals. Think of radio-frequency identification (RFID) and global positioning system (GPS) technologies, which track the movement of minerals and equipment.

There are also examples of technology specific to the mining sector. The oil sector is demonstrating the potential of ultra-deep water drilling technology, which drills and extracts oil from greater water depths.

The technology is creating and extending market opportunities to the industry by accessing previously unreachable deposits. For example, new oil operations were recently announced off the coasts of Ghana and Sierre Leone.

Dr Greg Baiden, director of Penguin ASI and a global expert on automation, says: “Automation in the mining industry will follow similar trends to those in the manufacturing industry.”

It starts with a person using an automated machine to handle multiple tasks and eventually evolves to artificially intelligent, autonomous machines. Baiden says the future includes intelligent machines that can heal themselves.

For now though, automation has not reached critical mass in the sector. Large mining companies like Rio Tinto and BHP Billiton are considered early adopters. Teleoperations, or telerobotics, is the operation of a machine at a distance.

Penguin ASI’s wireless technology, which communicates with robotic equipment under water, gives a glimpse of the potential of telerobotics in solving some of the mining sector’s sustainability issues. This wireless technology will enable mining companies to extend the life of their mining operations on land. Imagine flooding mines with water to double their mining depth, and using telerobotics equipment to run the operations.

One natural result of using better technology and innovation is cost reduction in the mining value chain. This will eventually serve the economic development of Africa well. As the cost of mining decreases, it allows smaller mining firms to establish themselves.

The business opportunities for ICT providers in the mining sector can be found in the corporate, technical and value chain systems. Historically, ICT providers focus on mining as a niche. However, as enabling technologies provide broader benefit to the sector and new mining entities arise, there are increased opportunities for the ICT sector.

Mining of Data

Also, the mining sector faces serious challenges to its long-term sustainability. ICT firms, which identify gaps in the value chain and create solutions that close the gaps, leverage the value chain and contribute to sustainability, will carve their own space.

While there is undeniably a lot of technology used in the underground oreextraction part of mining, more focus is currently being put on the processing side of productions.

MD of Softline Accpac, Jeremy Waterman, says that “inherently it’s a reasonably simple business”. With mining, “you’re putting a whole lot of resources in and you’re taking production out”.

But there has traditionally been a disconnect between production and what Waterman terms the “financial side of things”, particularly among smaller miners. This has been a cause of frustration within the industry, and a number of solutions now seek to marry the two elements.

This is a classic implementation of an enterprise resource planning (ERP) system, but up until recently, “marrying the elements” was simply absent.

“In the past it was tended to be done more on a kind of matchbox,” says Waterman. “You had a whole lot of costs and you had a lot of production and you subtracted one from the other and you made a profit.”

Nowadays it’s a lot more complicated. Waterman describes how workflow management systems can be used for control, and to “capture production data that’s coming back” into the system. The real difference is made by the layering business intelligence on top of these systems.

Ugan Maistry, business unit head of Mining & Manufacturing at EOH, agrees: “Over the years, there’s been this maturity in terms of process-control and automation systems to be able to execute. There is now maturity in business systems like ERP.”

But over the past few years, Maistry says there is a newfound maturity around the systems in between the parts. He calls it ‘mining execution systems’, and describes it as very similar to manufacturing execution systems.

He likens many of the processes in mining to inventory management. “Previously, people only knew what they had and what they produced if they actually stopped their operations and took stock.”

“Questions like, ‘Where is the actual material in their value chain?’” adds Maistry.

He says some customers have been spending considerable amounts of money in the last two or three years on exactly this: business intelligence systems, which he likens to “enterprise manufacturing intelligence”.

“But,” says Maistry, “what they haven’t explored is how to extract value out of that information.”

This is the next frontier. Now, “our customers need to mine the data, and I’m talking end-to-end,” says Maistry. “It’s about looking at information in context, not just in terms of volumes and quantities, but in costs as well.” Waterman takes it one step further: “We [South Africa] are trend-setters in mining as a whole.

“There’s been an explosion of midcap miners, and that is where we’re seeing the real growth.”

Aside from ERP and workflow management systems, the back office sees similar ICT trends to those in pretty much every industry. Working costs are being rationalised, with single vendor outsourcing one way of saving money.

Licensing rationalisation is being looked at, says Maistry, and providers like Microsoft and SAP are “coming to the party.”

I had the great opportunity to share about tapping the power in social networks for business and careers with a group of Harvard graduate students on November 19, 2009. It was sponsored by the African Caucus student group of the Kennedy School of Government at Harvard University.  I’d like to give special thanks to Julia Mensah for the opportunity.  Below is a summary of the workshop.

I, myself, am a task-oriented person.  This means I travelled the hard road to learn the significance of people in getting results and business success.  My training ground was Africa for the past five years.  While expertise played a part in my success, relationships also played a significant role.

When I started to research the notion of social networks, I learned that social networking was even important for Bill Gates.  When Gates started his firm, his mother used her social connections in Seattle to provide Gates access to key business people.

One of my biggest observations is that social networks are very important when one is initiating a new idea, whether in business or covering social issues.  So, just as we spend time developing the next greatest idea, we need to focus on developing the ecosystem that will support the idea through its lifecycle. 

Cultivating your network is an intentional activity.  It’s easy enough to understand because we know that relationships take work. 

The workshop highlighted practical means for cultivating your network.  For example, sharing useful information with people is a simple, but effective way to provide value to others.

To learn more, you can download Tapping into the Power of Your Network (296) presentation.  You can also listen to a recent radio show, “Power Push:  Using Social Capital for Success.”

This is a post-show note for the radio segment, “Power Push:  Using the Strength of Leadership.”  You can check out other radio broadcasts I host at http://www.blogtalkradio.com/art-of-biz.

We focused on the role of leadership in business on November 5, 2009.  In research done by Dr. Bruce Winston and Kathleen Patterson, more than 90 variables of leadership were identified.  That can make the task of understanding, much less acting upon, leadership complex.  However, the correct working definition of leadership upon which an entrepreneur or organization acts makes all the difference, particularly during challenging times.

Our conversation started with a definition of leadership by Dr. Myles Munroe, “Leadership is the capacity to influence others through inspiration motivated by passion, generated by vision, produced by a conviction, ignited by a purpose.”  Brett Johnson, developer of the LEMON Leadership model, says this is a picture of the visionary leader.  But, he adds, leaders also allocate resources and build structures in which people can be successful.

Brett agrees that everyone is a leader in space unique to them.  This fits well with the leadership paradigm proposed by Charles Manz.  First, a person learns to lead him or herself (self-leadership). Second, a person becomes a leader of others.  Third, a person helps others become leaders (super leadership).

In this paradigm, our organizations and society is filled with leaders.  Some ask the question, but there have to be followers right?  True.  A person leads other in his or her unique space while following others in their unique spaces.  As Brett points out, this is a characteristic of the shift from hierarchical (control-centered) organizations to networked (authority-centered) organizations.

Brett brings a new perspective with the concept of leadership identity.  Leadership identity is a blueprint, or DNA, of who you are as a leader.  As with your psychological identity, it is not something that can be changed.  However, they both can be discovered as you learn more about who you were designed to be.

In the LEMON Leadership model, a person’s leadership identity can be characterized in five leadership types – Luminary, Entrepreneur, Manager, Organizer and Networker. Brett says that people have a primary and secondary LEMON leadership type.  He also found a leader resorts to the strengths of his or her primary LEMON leadership type during the best times, but resorts to the weaknesses of his or her secondary LEMON leadership type during the worst times.

With all the insights we discussed, it still comes back to the question how does leadership make a difference in my business?  Simply, leaders are people who make things happen.  Brian Klemmer describes these type of people as “creators, go-getters and aggressive producers in society.”  Sounds like the entrepreneur, right? Because you are one of these people, you can transform a failing business into a successful one.

 

But…And a BIG but.  Klemmer points out that these individuals often lack ethics.  On the show, Brett and I looked at the current economic crisis in the leadership context – greed overrode ethics.  Leadership in business and society is not about how much you can get for yourself, but how much you can get for others and yourself in a positive, sustainable manner.  It’s about creating win-win situations.

So, when we speak of the “rise of the entrepreneur,” we are not only speaking about the potential of the entrepreneur to create monetary prosperity but also to address society’s issues – poverty, illness, crime.

There was so much more that we discussed on the show.  Take the time to listen. (http://www.blogtalkradio.com/art-of-biz/2009/11/05/Power-Push-Utilize-Your-Strengths).

If you would like to learn more about the LEMON Leadership model, you can purchase the book at Amazon.  To contact Brett Johnson, visit The Institute’s website (http://www.inst.net).

And don’t forget to stay connected with The Art of Making Business Happen community at http://artofbiz.ning.com and http://www.blogtalkradio.com/art-of-biz.  You can even join the community.

“The process for seeking capital, or funding, for a business is an ongoing task that entrepreneurs need to understand,” says Patrice Backer.  Mr. Backer is Chief Operating Officer for Advanced Finance and Investment Group (AFIG).  He joined us for our November 4, 2009 segment, “Preparing Your African Venture for Investors.”

We opened the show with an overview of private equity funding options for businesses based on their lifecycle.  There are essentially two phases – start-up and growth/expansion.  During the start-up phase, businesses seek pre-seed, seed or early stage funding.  This start-up phase is connected with what its called venture capital.  Newer firms present higher risks, so there are certain types of investors, venture capitalists, who focus on these types of firms.  Backer noted that venture capital is still not a strong option in Africa.  The exception is South Africa which has a more mature market.

In the growth and expansion phase of an existing firm, there are also three funding cycles – second stage, third stage and bridge funding.  There is also an option of buy-out.  Growth and expansion funding for existing firms is the focus for the majority of private equity firms with an African portfolio.  Backer explains that it provides a good middle ground for investors – they get good performance with lower risk.

Backer says that investors in private equity funds in Africa are development institutions, private sector or a combination.  He says that development institutions, often affiliated with governments, have a higher tolerance for the risk environment in Africa so they are consistent contributors.  When the global economic crisis hit, it was private sector contributors who mostly pulled out of African investments.  However, it’s important to note the predominant reason for withdrawing investments was the need for cash not a lack of performance.  In fact, the only African country that had negative growth during this period is South Africa.

When firms are looking for private equity funding, Backer has three recommendations.  First, the firm should have a solid business plan.  Second, the firm should be organized, demonstrating it can handle all aspects of the business operation from customers to legal requirements.  Third, the owners should not shy away from hiring professional, e.g., financial and legal, to help them with the process.

Backer notes that there challenges which limit the private equity sector in Africa.  First, the legal and institutional frameworks conducive to private equity firms still lag in Africa.  Second, investments come mostly from foreign sources instead of local.  Once more local investments occur, it will shore up the number of foreign investors that come to the table.  One of the recent success stories is SEACOM, the undersea broadband cable provider for Africa.  SEACOM had a strong showing of both local and foreign investors.

To learn more from this insightful discussion, listen to the recorded show.  To learn more about AFIG, go to http://www.afigfunds.com.  To stay in the mix of venture capital and private equity opportunities in Africa, you may want to join one of the online communities like VC4Africa.

For additional resources about doing business or investing in Africa, go to our site – http://www.afribiz.info.

One of the paradigm shifts in our global society is moving to an entrepreneurial culture.  This means that the entrepreneurial “lifestyle” will be a significant influence moving forward.  This cultural change will influence companies and consumers alike, so businesses need to understand what will influence success in this new age.  One of the defining characteristics is creativity. 

We had an energizing show about creativity and business on October 29, 2009.  We were joined by Dr. Lynne Levesque, a creativity expert and author of “Breakthrough Creativity.”  Our show discussed how creativity is a strength and imperative in business, as well as the thought that everyone is creative.  The concept that everyone is creative aligns with the concept that everyone is an entrepreneur, or someone who creates.

Dr. Levesque presented an excellent definition for creativity, “ability to produce different and valuable (useful) results.”   She said that people, who were considered creative throughout history, produced something of value.  It wasn’t just about brainstorming ideas.

Another aspect of creativity is its relationship with innovation.  Levesque says creativity is something that belongs to an individual while innovation is the ability of an organization to pull out creativity in its employees to produce great products and results for its customers.

Levesque supports the thought that everyone is creative, but each person’s creativity manifests differently.  It’s something that is within every individual.  The creative process, including tools and techniques, is what develops the creativity within individuals.

The eight Creative Talents, e.g., Visionary, Harmonizer, are aligned with the eight personality types proposed by Carl Jung.  Levesque says all the Creative Talents are necessary in successful business and on teams.  It is interesting to note that all the Creative Talents are at work in every person, but in varying degrees.  A person will have a primary and auxiliary Creative Talent.

In closing the discussion, Levesque spoke of the importance of entrepreneurs knowing their creative strengths, then determining if they and/or their teams represent all eight Creative Talents.  Also, entrepreneurs need to:

• find ways to respect the differences in the Creative Talents
• remain open as a leader
•  work on a culture incorporating creativity
• have goals and metrics.

In all, the process to develop the creative culture is embedded into the team building process, not a separate task.

To learn more about the eight Creative Talents, access resources and contact Dr. Lynne Levesque, go to http://www.breakthroughcreativity.com.  To listen to the show recording, go to http://www.blogtalkradio.com/art-of-biz/2009/10/29/Power-Push-Living-Life-as-an-Entrepreneur.

To share in other discussions on The Art of Making Business Happen, check out our show page at http://www.blogtalkradio.com/art-of-biz.  You can also follow us on Twitter at http://www.twitter.com/theartofbiz.  Join our online community to become more involved at http://artofbiz.ning.com.

There is a ground swell of interest growing about business and investment in Africa.   Too often that interest wanes because businesses know very little about how to evaluate and enter opportunities in Africa.  This segment, “Practical Insights for Investing in Africa,” started a three-part series on investing in Africa to help those interested take those first steps.

We were joined by Attorney Peter Hansen, who specializes in African Investment Law.  Also, Professor Richard America, who teaches a course on investing in Africa at Georgetown University and specializes in management development in Africa, contributed to the conversation.

Throughout the discussion, we emphasized a critical element for any venture into Africa – a focused strategy.  For investment, the investment plan is your instrument.  Some issues to consider are:

• What are your financial goals?
• How much money do you have to invest?  Have you established a budget?
• What level of risk can you tolerate?  What returns do you want?
• What is your investment timeframe – short-term, mid-term and long-term?
• How much effort will go into managing the investment?
• What are the tax issues with which you will deal?

Peter Hansen said that many investors want to “shoot from the hip” when they invest in foreign markets.  Hansen says that investors will have different plans and legal expectations for African countries, so preparation is essential.

Hansen also emphasized a good mindset for business/investment in Africa for both the investor and Africa is focusing on sustainable business opportunities.  This involves developing open and honest business deals.

For Americans investing in Africa, Hansen shared that there is anti-corruption legislation, the Foreign Corrupt Practices Act (FCPA), to which we must adhere.  He suggests that every investor establish an anti-corruption plan before venturing into international business and investment.

Richard America mentioned that there are investment opportunities in enhancing the value chains in Africa in sectors like timber, minerals.  These sectors have typically focused on exporting raw materials, but building local capabilities is becoming an imperative.  The host, Lauri Elliott, suggested that enhancing the capabilities of workers and managers can be a business strategy to help investors succeed in Africa.  African governments are looking for ways to develop their local workforce, so investors can create goodwill by helping them do so.

America also crystallized the importance of the local partner.  He shared what a critical asset a local partner, who is honest, trustworthy and knowledgeable, can be.

Both America and Hansen mentioned resources for investors and business people.  These are the Overseas Private Investment Corporation (www.opic.gov), African country investment and promotion agencies (http://www.afribiz.info/?p=647) and the World Bank’s Doing Business website (www.doingbusiness.org).

As a final note, America suggests to evaluate which country to enter, check out the countries that have received development funds from the Millenium Challenge Corporation (www.mcc.gov).  Countries go through rigorous analysis for policies promoting economic and political freedom before receiving funds from MCC.  Some African countries that passed the challenge include Benin, Kenya and Morocco.  Several other African countries, e.g., Liberia and Malawi, are eligible to receive funds and are currently going through the approval process.

Attorney Hansen prepared a brief on the issues he raised, which you can download from http://media.afribiz.info/practical-legal-issues-investing-africa-hansen.pdf.   To access the archived show, check out http://www.blogtalkradio.com/afribiz/2009/10/28/Practical-Insights-into-Investing-in-Africa.

To learn more about doing business in Africa, first visit our radio show page at http://www.blogtalkradio.com/afribiz.  Then, visit our information portal at http://www.afribiz.info.

This is a part of the ongoing series I write on ICT across sectors for ITWEB/Brainstorm Magazine South Africa.  This article is on manufacturing.  It was a collaborative piece with Hilton Tarrant who focused on South Africa while I focused on the African continent and global trends.  Enjoy!

Originally posted online at Brainstorm Magazine.

ICT is a key enabler for the manufacturing sector. It’s transforming the global manufacturing arena while opening opportunities in the African market.

Africa lags behind its global counterparts in industrial and manufacturing development. Even when comparing the percentage manufacturing contributes to the gross domestic product (GDP) in African countries to other developing countries, manufacturing contributes about ten percent in African countries and 21 percent in other developing countries.

In Africa, but outside South Africa, there are pockets of manufacturing success stories. The Ethiopian leather industry has made a name for itself in global niche markets. Robert Parker, group VP of research for IDC Manufacturing Insights, says the one significant manufacturing segment in Africa is the remanufacturing of computer and electronics.

However, the picture is getting brighter. Globalisation, innovation and ICT are transforming many sectors to anywhere, anytime platforms. In the manufacturing sector, the mantra is “design anywhere, make anywhere, sell anywhere,” says Parker.

One shift is product manufacturing, separated into tasks and spread across manufacturing facilities. This is seen as a huge opportunity for new, smaller manufacturing entrants in low income countries, including Africa, according to the Industrial Development Report 2009 by the United Nations Industrial Development Organization (UNIDO).

Parker speaks of a similar shift from mass to micro to pod manufacturing. Historically, manufacturers built one facility to serve the world. With pod manufacturing, manufacturers can download designs and methods from anywhere to localised manufacturing equipment to serve the local economy.

Pod manufacturing has reduced cost tremendously and increased flexibility. For example, there is equipment to manufacture wine, starting at $3 500.

Parker also says that local African manufacturers will be able to “bring more diversified and custom products to their local consumers”. For example, Digiskin allows customers to go online to design skins to cover gadgets, including cellphones.  A company can purchase a production machine to provide some of these skins locally to customers.

For a long-term opportunity, Parker says that African governments need to leverage access to their abundant resources and require firms to develop manufacturing and processing facilities locally alongside extraction operations. In some instances, deposits in Africa may account for 80 to 90 percent of global deposits of certain precious minerals or metals. They need to play the leverage game like China. China recently limited the export of rare metals to boost the price. African governments can use the same principle in a different way.

In every aspect, ICT is embedded in the manufacturing value chain from infrastructure to intelligent manufacturing. Without sufficient broadband infrastructure, approaches like pod manufacturing might not be possible.

Parker also sees another opportunity with the pervasive wireless infrastructure in Africa, allowing African firms to tap into and manage the full manufacturing value chain almost anywhere with technology like remote sensing and radio-frequency identification (RFID).

While there may only be pockets of manufacturing on the continent, the global manufacturing shift opens new, even immediate, opportunities for ICT firms looking for new pastures, e.g. industrial clusters in Uganda and Tanzania, as they develop. It will be important for ICT firms to continually scan the environment to take advantage of these emerging opportunities.

Manufacturing convergence

Further south, leveraging information, communication, control and power is helping South African manufacturers innovate and compete.  Manufacturers have two options during the global economic downturn: cut back and try to weather the storm, or take the opportunity to be more innovative and aggressive. However, because South African factories struggle to manufacture products at the same cost as is possible elsewhere in the world, and due to a strong currency, local manufacturing concerns face these two options all the time.

Rockwell Automation believes that even though convergence has become a cliché over the past decade, “today the combination of technology maturity and economic necessity has made manufacturing convergence a manufacturing reality”. Manufacturing convergence sees the merging of functions and systems that have been separate. The theory is that with people, processes and technology working together, manufacturers can perform better.

Convergence within manufacturing leverages information, communication, control and power.  It’s no use simply having systems and machines recording data. Information must be in a manageable form: the new goal is presenting information in context.

Sources of information can be “streamlined to allow configuration, visualisation, maintenance and optimisation of manufacturing processes and plant assets,” Rockwell says.

Immense value is created when IT and manufacturing departments are able to share information seamlessly and securely, while running multiple applications over the same network. An enterprise manufacturing approach that is particularly suited to larger distributed companies envisions the enterprise as a “virtual manufacturing network”.

EOH, during an implementation at Coca-Cola’s greenfields Bloemfontein plant, was able to capitalise on available technologies while the rest of the group used mostly manual or semi-automatic systems. In time, improvements to its other factories will mean that they can join the network across the Coca-Cola SABCO enterprise.

The trend nowadays sees standard, unmodified Ethernet being adopted broadly across the plant and enterprise for data collection and real-time control. Add to this newer functionality such as voice, video and mobility, which are beginning to appear in the plant environment.

However, despite these advances, manufacturing convergence is a complex environment and cannot be delivered by a single supplier. Locally, system integrators like Bytes and EOH implement solutions from companies as varied as Cisco, Microsoft, SAP, Wonderware and Dassault Systems.

Beyond this, original equipment manufacturers are embracing new so-called “smart” service business models enabled through embedded software, wireless connectivity and online services.  This shift has significant implications for manufacturers.

Lifecycles of products are becoming ever shorter as releases will begin to ship in “real-time” with software devices delivered to products over networks when needed. Oracle’s manufacturing VP, Manish Modi, reckons it’s hard to accurately predict what manufacturing operations will look like five years from now, but “factors we experience today are likely to have a residual effect on the supply chains of tomorrow.”

Modi says that many of the top manufacturers will have leading “service-oriented architecture suites in place to enable supply chain evolution as well as needed flexibility to quickly respond to changing markets and inevitable shifts in buying patterns”.

He also suggests that most manufacturing systems will support Web or Enterprise 2.0. “The future adoption of tools like wikis, blogs and mash-ups to create store, and collaborate on information by skilled manufacturing users should not come as a surprise. Touch screens and sophisticated wireless devices should be a common part of leading factory floors.”

But, the biggest problem in converged manufacturing is not the availability or implementation of technology: it’s changing the mindset of the people themselves.

We had a quite a discussion with Cedric Muhammad, author of “The Entrepreneurial Secret to Starting a Business without a Bank Loan, Collateral or Revenue.”  The context for the discussion was the extreme environment in which we do business today globally.  I described the environment as openly hostile, meaning opposing or resisting our efforts to do business.  But, we concluded that entrepreneurs have the ability to tame this environment for success.

Cedric has an extensive background as an economist and entrepreneur.   He even formulated a business leadership model called “Hip-Hopreneur.”  A Hip-Hopreneur is an individual steeped in the hip-hop culture who is ready to become a power broker, business owner and political leader.  A Hip-Hopreneur is someone who appreciates the hip-hop art form and culture, as well as the responsibility of leadership and power to influence people around the world.  These are truly characteristics of successful entrepreneurs in any sector.  Entrepreneurs transform lives, communities and societies.

Cedric highlighted four key challenges faced by entrepreneurs at any time – capital, culture, communication and competition.  Each of the challenges when approached successfully enable entrepreneurs to navigate past a hostile business environment.

Looking at capital, we need to focus differently.  First, Cedric said entrepreneurs must view themselves and their ideas as the greatest source of capital.  Second, seek funding from your own social networks, e.g., college friends, family, church members.  Cedric emphasized that entrepreneurs often overlook the best source for accessible capital.

 Another point is that entrepreneurs go looking for funding before their concept is developed or proven.  Banks, venture capitalists and angel investors look for “bankable” businesses.  They want to make money, too!  When entrepreneurs start, they need to recognize the funding stages aligned with the business lifecycle.  Typically, when an entrepreneur first starts, he or she is at the pre-seed stage.  This is where your social networks can really help you out. 

Navigating culture and the competitive environment successfully is essential.  If you can tap into the culture that will support your business either as consumers, suppliers, etc., you will be amazed at the momentum you gain.

 In the competitive landscape, you need to be prepared for the shifts competitors may bring, such as disruptive technology.  The recent shift in Facebook’s prominence over MySpace is an example.  As Cedric put it, “it’s obvious MySpace didn’t see Facebook coming.”  But the story behind the story, which attests to the brilliance and adaptability of the entrepreneur, is that MySpace changed its business model to focus on its strength – communities around music and entertainment.

We also looked at how the current hostile environment evolved. A key crux was lenders providing funds not based on merit of your business venture or your personal credibility, but knowing they could re-sell the loans for a profit.  We moved from the foundation of exchanging value in our trade systems to exchange money without value behind it.  While the crisis occurred, it is moving people back into alignment so that our trade systems will work.  It’s a bit painful now, but necessary.

There are many other points made in the conversation that you don’t want to miss. Take time to listen to the recorded show.

Also, spend some time getting to know what Cedric Muhammad is sharing.  He brings insights to help you with your business.  Check out his three-volume book, “The Entrepreneurial Secret.”  You can also catch him on www.blackelectorate.com, www.blackcoffeechannel.com and www.cedricmuhammad.com.

Continue the dialogue about “The Art of Making Business Happen” at our online community – http://artofbiz.ning.com.  And listen to our weekly broadcasts at http://www.blogtalkradio.com/art-of-biz.

Signing off for now – peace and prosperity to you!

Exporting is the commercial activity of selling and shipping good and/or services to a foreign country.  It is typically seen as a growth and expansion strategy for an established firm.  However, even start-up firms can find foreign markets more attractive than home markets. No matter the rationale for exporting, the approach is to enter the market cost efficiently and reach a break-even point as soon as possible. 

An export-ready business has considered the following: (1) company/product/service strengths, (2) rationale and objectives for exporting, 3() growth potential in other markets for products and services, (4) context of foreign country and the industry in the foreign country, (5) legal and regulatory requirements, (6) target market in foreign country, (7) financial requirements and (8) market entry issues.  We zoom in on market entry strategies in our discussion, “Preparing for Exporting – Getting to the Customer,” on AfribizTalk on October 21, 2009.

We were joined by two experts – Dr. Patrick Wilson and Dr. Emeka Nwankwo.  Dr. Patrick Wilson, Administrator of Big-Africa Partnerships Secretariat (BAPS), shared how the technical issue of labeling impacts the marketing of an African good exported to the United States.  Dr. Emeka Nwankwo, CEO of Vertical Optimization LLC, shared the process they use in Export-Path , which illustrates both the issues exporters should address and an approach for success.

Dr.  Pat indicated labeling should be informative, truth and not misleading.  Also, anything you put on labeling you must be able to prove.  Therefore, you should follow the mantra, “Do what you say and document what you do.”

Dr. Pat stressed the importance of having a good relationship with the distributor and buyer of your product in the foreign market.  Since in many cases you will not be local, the distributor and buyer will handle the presentation and placement of your product to your potential customers.  You want to work with those who will place your business opportunity as a priority.

Dr. Pat’s point leads into the larger discussion of export readiness.  There is a distinct difference between being export “willing” and export “ready.”  You may want to export, but have you developed the strategies and capacity to do so?

Dr. Nwankwo said there are three key challenges faced by exporters.  First, exporters need to access appropriate information to help shape their decision about exporting. We agreed that this is a key gap in how many businesses approach exporting.  Two, exporters need to have appropriate resources, e.g., human capital, equipment, and financial capacity.  Three, exporters need access to the marketplace, meaning the physical process of getting the products or services to the customer.  This includes elements like customs clearance, transport, warehousing, distribution and marketing.

We finally zoomed in on the challenge of access to information.  This is a challenge consistently mentioned by experts and clients alike.  Dr. Nwankwo says information, or the lack thereof, impacts a decision to pursue or not pursue exporting.  The first consideration is the exporting business concept.  This “straw-man” serves as input to the information gathering process.  It could be an existing business plan along with basic information about the idea for exporting, e.g., rationale and objectives, potential export country, target audience, timing, issues.

According to Dr. Nwankwo, the Export-Path process walks potential exporters through four key steps.  These steps include considering the concept, gathering intelligence on the opportunity, developing the product prototype and completing a risk analysis. After gathering the intelligence, potential exporters will be able to decide to pursue exporting or not. After completing the risk analysis, an export plan is generated.  The export plan is key to acquiring finance, if needed, for developing production capacity.

Since appropriate information is critical, we recommend that you first seek out and review existing information that is readily available and free.  Our Afribiz Info Portal will help you do just that.  In addition, we provide an on-demand seminar outlines a path for plunging into business in Africa.  It can also be applied to other ventures into international business.  The seminar, “Setting a Path for Success in Africa: in Business, Investment and Life,” is also available at the Afribiz website.

Listen or download the recorded radio show here.

Check out other AfribizTalk shows here.