Strategy ExpertSpeak: Businessmen must have the agility of a ‘fox’ to survive change
Best-selling business author Clem Sunter spoke to AfricaMoney on how smaller companies that “fit in” with changes taking place in the market will survive, while other, more powerful companies may behave like elephants that are unable to change course when needed. (Image: Opulent Living)
Clem Sunter is a top-selling business author and one of the few specialists in the world on scenarios and their use in corporate strategy. During the early 1980s, he helped set up a scenario planning function at global mining major Anglo American. Since 1987, he has authored 17 books including the best-selling ‘Fox Trilogy’ with fellow scenario strategist Chantell Ilbury. Our strategic expert spoke to AfricaMoney in an exclusive interview where he highlighted how corporate games enjoin the agility and the speed of a fox on businessmen to keep coping with change. He stressed that smaller companies that “fit in” with changes taking place in the market would survive, while other, more powerful companies may behave like elephants that are unable to change course when needed.
Edited excerpts from an exclusive interview:
You were voted by leading South African CEOs as the speaker making the most significant contribution to best practices and businesses in South Africa. Please comment on your experiences as a corporate strategic and scenario planner so far.
What made the difference in South Africa in terms of strategy in the 1980’s was the company I worked for, Anglo American, which did scenario planning for the political future of South Africa. There were really just two scenarios. First, the high road of negotiations leading to a political settlement which many people in the mid-80’s did not think is going to happen. On the other hand, we had the low road of conflict leading to war and a possible wasteland. Therefore, I was asked to give presentations on this issue which helped the conversation in South Africa where people started actively looking into the possibility of taking the high road, and of course Nelson Mandela was released in 1990 and the elections were held in 1994. My contribution in South Africa at that time somehow made me famous amongst the business community. It helped the country to achieve something which most of the people thought was impossible.
Please advise how corporate scenario planning helps businesses improve their fortunes in the dynamic and ever-changing global economy today.
The difference between business and sports is that sports do not change. If you play tennis, cricket, rugby or soccer, it is the same like it was 50 years ago. On the other hand, corporate games change dramatically in a period of five to ten years, and if you are not aware of the changes happening around you, then you go out of business. So my point is that part of strategy is to look at the so-called ‘flags’ that are changing your game and if necessary, play possible scenarios for a probable future which might well impact your market. Identify those flags and you can adapt your strategy to cope with these new flags.
Let me give you the example of newspapers. The flags have gone up in the print media space with the emergence of the internet, which means that most people read news on the internet and do not read it on the printed word because why pay for news when you can get it free online! Therefore, my question to newspapers companies is: How are you to adapt to this scenario to cope with theses change in the game? How are you going to set up a website that pays, given that many news websites like The Guardian are free? How will you get revenue out of it and turn your newspaper into something people will still buy?
I wrote a book with Chatell Ilbury and we called it “Mind of a Fox’’, because the great thing about a fox is that it is forever looking out at its environment to see how it changes. The agility and speed of the animal allows it to survive in the changing environment and so one should get the agility of the fox to adjust in changing circumstances.
In 2002, you co-authored a book with Wayne Visser entitled Beyond Reasonable Greed: Why Sustainable Business is a Much Better Idea. “Greed is good” has echoes of Michel Douglas playing Gordon Gecko in the 1987 classic Wall Street. What is “Good Greed” in the corporate sphere, according to you?
The reason we called it “Beyond Reasonable Greed”, is that everybody up to a point is driven by self-interest and “greed” in the sense of wanting to live some sort of a decent life. The book was very prophetic as there are a lot people nowadays who are super rich and super greedy. In fact, there is a book by French author Thomas Piketty titled “Capital in the Twenty-First Century”, which says that inequality in the world is as high as is was in the 1980’s in places like France. He studied tax returns as they went down in the 60’s and 70’s but now we are right back up where we were in the 1980’s. Therefore, the super rich are right up there again and the middle classes are being squeezed.
Once you go beyond reasonable greed, there are many things that can happen in terms of ‘flags’ going up, and probably the biggest flag right now is the anti-establishment flag where people vote for parties that have nothing to do with existing political parties. These voters take a stand against the greed of the incumbent political parties because they feel that the system is unfair and that is why you cannot go “beyond reasonable greed”. Then, you get new leaders like you have here in Mauritius, in Greece where they just elected a 40-year-old Prime Minister, in France where we have Marine Le Pen who is very popular, and finally Scotland
where the Scottish National Party and others are becoming more and more popular than the erstwhile firmly entrenched Conservatives and Labor.
Therefore, once you get into a situation where people feel that you have to go beyond the “level of reasonable greed”, they get angry and express it through their votes.
“According to Charles Darwin, the most successful species are not necessarily the most powerful ones but those that most readily adapt to whatever nature throws at them.”
This the whole philosophy of the book that I co-wrote with Chantell Ilbury which is called “Mind of a Fox” and reflects precisely what Charles Darwin meant. He was talking about animals that “fit in” and blend in with the changes taking place in nature — and it is just the same for business. The companies that “fit in” with the changes taking place in the market are the ones that survive. Other, more powerful companies can go into decay, as they might be unable to adopt new strategies and adapt to change.
In fact, big companies are like elephants, and it is the little guys, the entrepreneurs who are looking around like foxes and sensing change. The big companies have swanky cars, loads of money and so they do not want to change as they are making profit. Therefore, Charles Darwin’s principle is that you have to “fit in” as nature continues to change.
Could you tell us more about the current ‘flags’ that are plaguing the global economy, with particular focus on the ‘Ebola’ flag for African economies, and the religious flag, especially in context of the recent agitation in France by fundamentalist Islamic elements.
Let us start with the Ebola flag. We had a strong epidemic in Sierra Leone but now it certainly looks like the epidemic is under control with people taking precautions in terms of avoiding all contact with contaminated individuals. At the same time, drugs providing relief are also available now. These countries seem to be getting on top of the Ebola epidemic so we now think that the Ebola Flag is going down until the next epidemic happens. Nevertheless, it has been an experience to remember and learn from with 7,000-8,000 people dying from Ebola, and we must draw lessons on how we can prevent its recurrence in the future.
Even as Ebola is subsiding, the religious Flag is still flying absolutely high, with events in Paris and elsewhere such as Canada, Australia, United States, the Middle East, Syria, Iraq and Afghanistan. Chantell and I wrote in the “Mind of a Fox” that the growing confrontation between major religions of the world such as Islam, Christianity and Judaism is becoming more and more intense, leading to a sort of completion between different religions that could even culminate in war. We wrote a letter to former US President George W Bush that we published in the book in June 2001 where we said that the extreme future that he might face is a massive terrorist strike on the western cities, which actually happened three months after we published the book in September 2001.
Unfortunately, that competitive feeling among the various religions has not gone away. In fact, it has intensified and led to terrible situations in places like Syria, Iraq and Afghanistan where Americans spend trillions of dollars trying to sort the place out, but the whole game of war has changed. It is more a war of belief now rather than a war of territory and we have to use different tactics for that.
Please elaborate on the three ‘flags’ which tell you whether or not a nation is going to win in terms of improving its status in the global league of nations.
We have three flags that we must duly consider, of which the first one is inclusive leadership. You must have an inclusive leader in a country who brings people together because being a nation is like being a soccer team — you have to be united to win the league. Inclusive leadership is needed in order to succeed as a nation, along with clear morals and an anti-corruption stand.
The second flag is pockets of excellence. What does a country possess that really sets it apart from the rest of the world? Here in Mauritius you have a beautiful island, and it is tourism that sets you apart. In South Africa, it is the mining industry and in America, we have innovative companies such as Apple and others, that are game changers. So, are you creating new pockets of excellence? Is the government providing a platform for new entrepreneurs, new ideas? The second flag is about how you are rejuvenating the economy with innovation and pockets of excellence in order to stay ahead of the league.
The third flag is about the attitude towards entrepreneurs and small business. If you look, at most of the nations this really changes the economic fortunes in the long run are the entrepreneurs not the politicians. The politicians provide the platform but the entrepreneurs’ changes the fortunes of the economy. Here in Mauritius for example, with the low tax rate, the Mauritian economy has actually done very well in the last 20 years in terms of entrepreneurship.
How is Mauritius doing in terms of these three flags, and how would you advise the island economy to improve its fortunes in a global context?
The internal economy is being saturated and therefore Mauritian companies have to expand out of the island economy into different territories such as Madagascar, East Africa and elsewhere. Akin to the traffic, the Mauritian economy is getting increasingly congested, so people looking to grow their business footprint can create a hub out of Mauritius where they can replicate and create markets in those economies.
- By Kashish Jadoo