Today, I write to you in my role as CEO of Business SA, the peak body for the business community in South Australia. When 2020 started, never did I imagine that I would be standing on a ladder in Adelaide’s CBD addressing a 150-strong crowd of business owners at breaking point.
In all the twists and turns of 2020, for myself and my team, this was THE defining moment.
It exposed the pure heartache and despair that business owners have endured in the wake of COVID-19.
This show of solidarity from the hospitality sector was raw and emotional. People were open and honest about their fears for the future and in many ways, this was the moment where Business SA, the Chamber of Commerce and Industry for South Australia, truly found its PURPOSE.
In terms of Business SA’s role to support business owners, not only in the hospitality sector but right across South Australia, this moment doubled our resolve to support those who take a risk.
It is the risk takers who will ultimately drive our economy forward from this pandemic. Not business associations, not Governments. Entrepreneurs are our largest employer. They are also creators and seekers of opportunity. It is our role to support them through the good times and bad.
This year saw pivoting, resilience and mental health become words that we have become all too familiar with.
However, these words are much more than cliches. They have helped businesses to survive … and, we say to you all, a very big WELL DONE.
As the State’s independent and local Chamber of Commerce and Industry, Business SA has played its role in supporting 17 different industry sectors in 2020.
When the Summer bushfires devastated South Australia, Business SA personally contacted and offered support to more than 100 businesses impacted by the fires.
We then “pivoted” ourselves, delivering more than 40 virtual events and webinars throughout the year while our Business Advice Hotline answered 12,800 calls from business owners.
We brought together 50 industry associations to discuss their concerns and ideas to assist economic recovery from COVID-19 and later launched a 9 Point Plan to Skyrocket SA.
We held South Australia’s biggest Mentally Healthy Business Breakfast, which was livestreamed across 10 regions and attended by almost 200 business owners and more than 3,200 people online.
Business SA also advocated consistently to Federal Government, State Government and even Local Governments to fight for more financial support for businesses.
But we know it has been you, the business owner, who has done the heavy lifting this year.
We have stood with you, but you have done the hard work and we thoroughly commend you for it.
We wish you and your family a Merry Christmas and success into 2021. We hope you have an opportunity to re-charge over the break and we encourage everyone to buy local this Christmas.
When you support local businesses, you are supporting local jobs. This is something we’ll need more of next year. Also, when you support others, your organisation’s PURPOSE all of a sudden has more clarity and becomes a lot more meaningful.
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Welcome to the Martin Haese Report, the sixth in my series of musings on entrepreneurial leadership. With COVID-19 having wreaked havoc across industry sectors around the world and in turn disrupting how many do business, a growing number of people are asking whether it’s time to reconsider the business community’s relationship with the natural environment. I am one of those who believe that it is now timely to discuss how entrepreneurial and environmental leadership intersect.
COP21 Paris 2015
Before we commence, some context that qualifies me to share my thoughts on this topic. In my former role as Lord Mayor of Adelaide, I was invited to attend the United Nations COP21 in Paris in December 2015 where I spoke at several functions including the Sustainable Innovation Forum. It was at COP21 that I grasped the significance and strategic importance of South Australia’s renewable energy leadership and the high regard in which the State is held on the world stage.
It was also in Paris that I signed the Compact of Mayors, met with world leaders who are committed to environmental and economic leadership, and committed to educating myself about climate change adaptation, mitigation, the growth of low emissions industries and the circular economy.
In January 2019, South Australian State Minister David Speirs MP appointed me as Chair of the Premier’s Climate Change Council (PCCC) where I have since worked alongside a talented group of fellow Council members to advise and inform the State Government on climate change adaptation, mitigation and the importance of low emissions industries in South Australia.
In September this year, I (virtually) attended a number of sessions at Climate Week 2020 in New York City where I watched HRH Prince Charles’ inspirational address;
Has COVID displaced climate change?
While the global pandemic continues to dominate the headlines, there is a growing anxiety that some other pressing issues are being neglected, most notably climate change. This is a topic that was swept to the top of the national agenda when the drought culminated in last summer’s devastating bushfires, but was quickly set aside with the onset of COVID-19 only three months later.
But rather than despair, I suggest that the pandemic may in fact provide an opportunity to reassess, recalibrate and refocus on climate change issues, as COVID-19 has resulted in many people developing a greater awareness and appreciation for the natural environment.
For many, COVID-19 has forced a rethink about how we consume, where we consume, and who we consume from. This is resulting in a protracted shift towards people wanting to buy from and do business with organisations that either have an environmental sustainability policy (ESP), a goal for carbon neutrality, are actively involved in the circular economy, or have greater transparency about their waste cycle.
Consumer behaviour is changing
Consumer sentiment and behaviour is changing and if businesses don’t respond to the needs of their customers then they are often not in business for much longer. With more organisations putting measures in place that govern how and where they invest, there is a stronger emphasis being placed on whether organisations are making investments into climate aware and climate appropriate companies.
Insurable risk is another key consideration in business decision making, and assessing climate risk is already driving behavioural change within the business community. To illustrate the point, in January 2020, the Vice Chairman of BlackRock discussed their plan to avoid investments with high sustainability-related risk as climate concerns are driving a sweeping change in the way the firm invests and manages its $7 trillion in assets.
An opportunity rich environment
With rapid advances in technology, changing consumer behaviour and new demands being placed upon institutional investors, the low emissions sector is clearly the next big thing. If the steel, plastic, aluminium, cement, food and agriculture sectors were each to adopt circular and low carbon practices, not only would 9 billion tonnes of carbon be saved by 2050, a multi-trillion dollar carbontech sector would be unleashed.
In the following video, I share my thoughts on how climate change and technological innovation are catalysing the growth of low emissions industries and greater innovation within the circular economy.
However, while the economy is clearly important, I caution you against thinking that every climate related problem or opportunity must be considered in pure economic terms. After all, it has been that very thinking that has got into the predicament we currently find ourselves. Sometimes doing the right thing should be justification enough.
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Welcome to Part Five in my series of musings on entrepreneurship. I dedicate this long overdue blog post to my friend and business co-collaborator Lincoln Schultz who recently and quite unexpectedly passed away. I can almost hear Lincoln saying, “Why haven’t you finished your next blog post yet?” Apologies for the tardiness.
Things are certainly different this year. How the world has changed since December 2019 when in my most recent blog post of The Martin Haese Report we looked at the vital role of Social Entrepreneurs. There has been no script for 2020 and today’s blog post is intended to help you consider the role that entrepreneurial leadership plays in pivoting your business, career or organisation as we slowly emerge from one of the most turbulent years in living history.
While sounding something like a spacecraft that has invaded earth from afar, COVID-19 has proven itself to be not only alien to our recent experiences, but a profound health risk and the ultimate disruption to business as usual. When you pause to think about it, you would not be entirely honest with yourself if you did not admit to having experienced a range of emotions over recent months including fear, frustration, skepticism, resignation, acceptance, hope or even positivity. Truth be told, I’ve felt them all, but it’s pragmatism that has won me over.
Irrespective of how we are each processing things, this is surely a re-set moment for the global entrepreneurial community.
So, what role does entrepreneurial thinking play in the current context of COVID-19, in an environment where an ever-increasing number of corporations and businesses are looking to government and government administrations to support them through the turbulence? Before we address that, let’s first acknowledge that we’ve all seen examples where business owners and entrepreneurs have already “pivoted” their business model to adapt to the current environment. “Bravo”, I say to those who have done so. Well done. However, not every business can manufacture PPE (personal protective equipment), digitise their services, re-set their supply chain or flip their channel strategy, so this issue runs deeper, much deeper.
Much has been said and written about society’s cravings for political, cultural, environmental and commercial leadership and rarely does a day go by without someone, somewhere crying out for leadership as if it was something that could readily be downloaded on demand.
I have always been interested in what makes a good leader. I am equally interested in the difference between a good leader and a great leader. In my 25 years in business, I have met some impressive leaders. As Lord Mayor of Adelaide (2014-2018), I met many more.
Leadership is often defined as the ability to motivate a group of people or an organisation to achieve a worthwhile common goal. The link between leadership and motivation is not to be under-estimated.
I have come across many people who have either innate or learned leadership qualities, yet in my experience relatively few are prepared to step forward and pay the price for consistently applying them. Leadership involves both choice and sacrifice and the choices a leader makes are not often easy, and the sacrifices almost always include opportunity costs. However, irrespective of the circumstances, leaders do have common traits. They have vision, inspire trust, are good communicators and, most importantly, great leaders always accept accountability.
Let’s now consider entrepreneurial leadership. What is it? Why is it different and is it any more or less relevant today than it was only a few months ago?
I recently read a meme that said, “entrepreneurial leaders work 80 hours a week, so they don’t need to work 40”. Although hard work is a given, I’m not entirely sure that this is correct as working hours are not a badge of honour, and results are a better measure on any level. The reality is that it sometimes it takes a monumental effort to achieve a result and sometimes it doesn’t, as timing and opportunity both play a role in determining many outcomes. Just ask a forex trader.
The key ingredient that defines an entrepreneurial leader is their ability to lead an organisation in a fast changing and highly uncertain environment. Entrepreneurial leaders understand ambiguity, and they realise that perfect decisions are not always possible because they are operating in an imperfect environment. Sound familiar? Yes, it describes 2020 to a tee.
Change and uncertainty impact each of us differently. Some of us shine and some of us shrink. An entrepreneurial leader has the ability to remain calm, deconstruct the situation and reconstruct it so that the organisation not only survives, it prospers. Most tellingly, entrepreneurial leaders are able to do this in an environment where the “unknowns” often far outweigh the “knowns”.
Entrepreneurial Leadership and Adversity
Entrepreneurial leaders also have a unique relationship with adversity. They seem to see through it with a vision of what things may look like out the other end. That’s because change almost always brings opportunity. Whether that comes from changes in technology, markets, legislation, regulation or consumer tastes and preferences, change is an open door for entrepreneurs.
History is littered with stories about leaders and businesses born out of adversity. As I reflect on my own past experiences, two of my own businesses were born out of adversity, one of which was launched in a recession and went on to become a successful national enterprise. Although I didn’t plan to launch my business in a recession, it was a gap in the market and my frustration at not being able to secure the kind of job that enabled me to feel that I was contributing in a meaningful way, that motivated me to act.
The goal of this blog post is to share my own experiences in entrepreneurial leadership so I can assist you with yours. This blog briefly tells the story of my own retail business, a story that I have rarely if ever told until today. I now share it with you.
Youthworks Retail Co
After seeing an opportunity to capitalise on an emerging international streetwear trend, I founded the Youthworks fashion retail business in Adelaide South Australia in May 1993. I was inexperienced, under-prepared and under-capitalised. Coincidently, a good friend of mine had told me that if you over analyse every risk associated with launching a new business, you would probably never do it. Thankfully, I did not over analyse things. In this instance, my ignorance was my saviour. Instead, I had a huge amount of energy and I was very persistent. I asked a lot of questions and I was determined to find the answers.
When I launched the first shop, I had little idea how big it would become. At that point in time I was more focused on getting the formula right and more focused on survival than growth.
Some years later, as a lateral expansion of the Youthworks fashion business, I also opened the Sole Shoes “sneaker” chain. Both businesses developed a highly engaged and positive workplace culture, a strong track record for creativity and innovation and the company went on to win numerous industry awards, culminating in the Retailer of the Year Award in 2003.
Youthworks Retail Co, Rundle Mall Adelaide South Australia.
In the formative years of the business in the early 1990s, due to my own inexperience as a business owner, I employed an experienced and talented store manager and adopted a highly collaborative leadership style. In fact, over the years, I maintained that philosophy whereby almost everyone in the company was more skilled than myself in their own field of expertise.
I leaned heavily into my team and they responded. This is sometimes called “referent leadership” and it served me and my small team well. But, as the number of employees grew, my leadership style showed its limitations and I found it increasingly difficult to manage and lead a growing number of team members. I had to start working on the business as well as working in it. The need for policy, procedures, rewards and a more hierarchical management structure soon became apparent. As my own technical, financial and leadership expertise improved, I embraced the use of financial and non-financial rewards as a means of motivating and directing what became a larger team of over 220 employees. Occasionally, I also had to trust my instincts and make the hard call. When I later completed an MBA, I learned that the academics call these techniques “rewards power” and “coercive power”. Sounds a little sinister, doesn’t it? It isn’t.
As the company grew to $25M annual sales across two states in Australia, I did not abandon the use of my referent leadership style, and along with a healthy dose of “gut feeling”, I embraced referent, reward and even coercive leadership as the situation required.
An example of rewards power was the development of a staff induction, training and development program where team members were rated on their participation in the training as well as their subsequent sales results obtained through applying their knowledge. These ratings were then used in assessing future managers and leaders within the company. This program resulted in lower staff turnover and a strong “promote from within the ranks” ideology where team members viewed the retail industry as a valued career and a promotion within the company as recognition of their efforts. I firmly advocated that the most important relationship that anyone held in the company (other than that with the customer) was with the person to whom they immediately reported.
With a workforce made up of full-timers, permanent part-timers and casuals, I also recall being entirely upfront with everyone about how retailing and customer service skills were a pre-requisite for success in almost any industry. Working with people and working in teams are skills not mutually exclusive to the retail industry, they are highly transferable and serve you well irrespective of the career path you follow. On of my other “mantras” was a total aversion to anyone who would even vaguely suggest that they would start to perform only when they were promoted to the next level. My immediate thought was “why would I consider promoting you if you are not performing now?”. Needless to say, those folks never lasted very long in my company. Lastly, the workplace needed to sometimes be spontaneous and fun. We ensured that it was.
These, along with other initiatives, developed a particularly strong company culture that could be considered customer-centric, action orientated and one that valued creativity, innovation and rewarded results.
However, the company’s growth trajectory was not always smooth. Having expanded into the Melbourne market in the late 1990s incurring substantial set-ups costs and trading losses in the early years of doing so, the introduction of GST in year 2000 saw a softening in consumer demand for several months. With flat sales and rising costs, I remember questioning my own sanity. Cash flow was awful. Thankfully, things improved.
However, one of my greatest lessons was the counter intuitive relationship between success and reinvention. I learned that the best time to reinvent the business was when things were going well, not badly. Although this sounds simple, it is not, as when things are going well, every fibre of your being tells you not to change anything. For businesses operating within fast-moving consumer goods sectors, this is especially relevant. When I look back, the Youthworks business successfully reinvented itself three times in twelve years. Starting out as a niche supplier of clothing and accessories for the underground dance club scene, Youthworks purposely evolved into a youth fashion lifestyle brand. It was both evolution and revolution as I was forcing change on the company as much as the marketplace was demanding and accepting it. In the highly competitive arena of youth fashion, it kept us out front.
The formation of a new Youthworks Group corporate entity in 2002 brought about several challenges. Some of those challenges were identified and openly debated by myself and my new business partner prior to the expansion, others were not. Leadership was always going to be a critical factor in determining the success of the proposed expansion program. My business partner had joined Youthworks with a proven ability to found, build, float and divest an international retail group with almost three thousand employees and along with his role as Chairman of the Board, my business partner had huge legitimacy. His track record of achieving results over many years was beyond repute. Youthworks was re-capitalised and plans were laid down to open another retail store every three-months and for the company to migrate more of its supply chain from Australia to various offshore destinations.
The company moved into a period of rapid growth. We favoured the use of rewards power and the buying staff were soon individually signed up to an attractive bonus incentive program where financial rewards were levied on their ability to move production offshore and improve margins, mark-ups and gross profits. The sales managers and sales teams were similarly signed up to sales reward programs which incentivised them to lift sales in line with the budgets set. Youthworks embraced technology as a means of accelerating information flow and implemented new accounting, point of sale, payroll and inventory management software. The offices and warehousing were both relocated to larger premises.
In an environment of such rapid change, operational challenges were inevitable and some of those challenges were a consequence of our differing leadership styles. With heightened time pressures, managers and buying staff became less consultative which resulted in less buy-in from the sales team. With the sales team making up 80% of the company’s workforce, this provided new challenges and management needed to find more effective ways of communicating the decision-making process. Although Youthworks was by no means in a state of crisis, time constraints became a common excuse for lack of consultation on many issues. In some instances, this resulted in expensive re-working becoming necessary.
The very first store. Youthworks Retail Co, Regent Arcade Adelaide South Australia
Myself and my business partner had differing leadership styles, but not in all instances. I had long subscribed to “The Action-Observation-Reflection Model” and was uncomfortable about not having time to think before making large decisions. In this rapidly changing environment, I sometimes deferred to my business partner’s experience and relied less on my own instincts. This deferment had varied outcomes, some positive, others negative. Our strong focus on financial incentives brought about the rise of more of a “me” based culture, sometimes at the expense of teamwork. It created silos and cliques. While I did not disagree with the role that financial rewards played as a motivational tool, I believed that non-financial rewards were equally important.
I prided myself on being a consistent leader who trusted the company’s employees and applied change by securing buy-in and then empowering the team to deliver. I was not overly rigid in my leadership and management style; however, I was always consistent.
To secure a desired result, my business partner was more willing to attempt various courses of action to secure the best outcome. This leadership approach sometimes left team members not knowing where they stood on a particular issue. On occasion, this approach was viewed as inconsistent and brought about skepticism, discord and even de-motivation. However, as long as we applied our leadership to a situation that best matched our individual leadership styles, the outcome was positive and our leadership effective. If we inadvertently or even purposely attempted to play each other’s role, the consequences were almost always ineffective.
This was a valuable lesson for me, and I hope for you too, as role definition is critically important for any entrepreneurial leader in a fast-moving environment. So is communication, and lots of it.
Youthworks and Sole Shoes went on to achieve annual sales of $25M and sales per square metre measurably above industry averages. In 2005, Youthworks was sold to a publicly listed company and six months later Sole Shoes was sold to a private company. As I look back, the company’s most valuable assets were not its brand, stock, shop fittings or intellectual property, it was its unique culture and talented people. By good fortune, good design or both, Youthworks had an extraordinary workplace culture that undoubtedly helped the company maintain is market leading position.
We have discussed several topics in this blog post, many under the auspices of entrepreneurial leadership. We have also touched upon the topic of reinvention. If you would like to learn more about reinvention, in my role as CEO of Business SA (Chamber of Commerce and Industry South Australia), I invite you to join me for the first of a new series of FREE webinars on the topic. Following on from the success of our recent business RESILIENCE and RECOVERY webinar series, REINVENTION is the third instalment in our regular webinar series where experienced industry practitioners will share their insight.
With restrictions slowly easing, now is the time to make sure your own goals and business model is robust enough to be sustainable and reinventing your products, services or your business itself may be amongst the most important actions you take to navigate the turbulence of 2020.
Our first live webinar event in the REINVENTION webinar series called “Will your business shrink or shine this year?” focuses on the key principles for personal and business success and I look forward to sharing with you my seven key principles for personal and business REINVENTION.
To register for this FREE webinar held on Thursday 30 July 2020 from 6:30 – 7:30pm (Australian Central Standard Time), click ‘Register Here’ below.
A quick lesson about the importance of being agile.
The inter-relationships between creativity, innovation and entrepreneurship are already well documented. With organisations operating in such highly competitive environments, creative thinking has become a crucial way to differentiate in a crowded marketplace.
Whether that manifests itself as the next big idea or as an improvement to an existing process, it almost always starts with creative thinking.
It is well documented that in order for an organisation to embrace creative thinking, management must tolerate failure. The old adage of ‘fail small and succeed big’ has never been more true when it comes to the application of creative thinking within organisations.
Welcoming creative thinking within organisations also requires a degree of agility. A few short years ago, I was asked to keynote a musical gala at Adelaide Town Hall. Prior to going on stage, it was brought to my attention that there were slight issues with the schedule as the next artist was caught in traffic and running late. This is how I helped the emcee get everything back on track before I delivered the keynote speech!
Welcome to the Part Four of a series of musings on entrepreneurship.
Do social entrepreneurs create change?
In last month’s blog post of The Martin Haese Report where we discussed Disruption, I described the ways that big companies such as Gillette, Michael Hill Jewellers and Nike have used social causes to disrupt their customer base and target Millennial consumers.
However, it should be noted that Millennials are not the only socially conscious generation and many large companies have been supporting worthwhile causes for decades.
Some of this support has been overt as in the case of Ronald McDonald House and the Westpac Rescue Helicopter in Australia and some of it slips quietly under the radar like Bunning’s support for school gardens as well as community clubs and other causes through their regular sausage sizzles.
What has changed though, is that conscious consumerism, the idea that organisations have a soul and care about something beyond their bottom line, has been elevated up the list of things that customers consider when making their purchasing decisions.
When organisations use social causes as part of their marketing toolkit, we might see ‘buycotts’ and boycotts at the extremities but for the most part, consumers tend toward the responsible centre and an organisation's support for social causes has become a contributing factor to purchasing decisions rather than a deal maker or breaker.
Having said that, any organisation that adopts a social cause or even a charity as part of their strategy must do so in an authentic way and become genuine champions for that cause.
The public are, quite rightly, unforgiving of lip service and publicly hostile to hypocrisy.
Most people associate the term ‘entrepreneur’ with the world of start-ups, business or commerce, but if we go back to the first blog in this series, Are entrepreneurs born or made? I offered that entrepreneurialism is a mindset or modus operandi and entrepreneurs are people who;
1. Create and/or recognise opportunities
2. Assume the responsibility for the risk involved in new ventures, and
3. Have the managerial skills to gather and deploy the required resources
While these skill sets are particularly well suited to the business world, each is also transferable beyond.
I would argue that social entrepreneurs require another skill, the gift of persuasion, because while entrepreneurs can promise a financial return on investment, social entrepreneurs often deliver less measurable outcomes.
Social entrepreneurs come in all shapes and sizes, from NGOs, micro finance, social enterprises, community groups and non-profits through to regular businesses that put social issues at the centre of their offer. In fact, the sector even has a name, as its often referred to as the ‘for purpose sector’.
Oxfam Christmas Catalogue
Non-Government Organisations are some of the most visible socially entrepreneurial organisations and include global names like the Red Cross, Oxfam, Medicine Sans Frontieres, Sea Shepherd, Amnesty International and Greenpeace.
Just like any entrepreneur, each of these organisations has a driving purpose or ‘big idea’ that defines their organisation and their every action.
With regard to NGOs, some might argue that the first item on my list of entrepreneurial attributes, ‘Creates and/or recognises opportunities’ might read ‘recognises existing threats or problems’, but it largely depends on how you define ‘opportunities.’ Personally, I have always been inclined to think of opportunities and threats as two sides of the same coin.
For example, Oxfam’s goal might be to end world poverty which, at first glance, seems like a problem to be solved. However, one of the ways they have gone about this, is by recognising the opportunity to empower small producers in the third world and providing access to western households (via Oxfam shops and a wholesale arm) for their products.
When I was the Lord Mayor of Adelaide, I had the pleasure of meeting Professor Muhammad Yunus who shared with me his extraordinary story of social entrepreneurship. He signed a copy of his latest book, ‘A World of Three Zeros’ for me. I have read it twice.
Professor Yunus - Grameen Bank
Professor Yunus began working on what would become Grameen Bank in 1976 in the wake of a devastating famine that struck Bangladesh in 1974. The idea was simple, a community development bank that could make small, low interest loans to impoverished families without collateral.
His first loan of $27 (USD) was seed funding for a group of 42 families to make products for sale.
Professor Yunus expanded this micro finance concept to villages near the University of Chittagong and gained the support of the national, Bangladesh Bank.
In 1983, Professor Yunus’ project was granted the status of an independent bank by the Bangladesh government and despite setbacks from natural disasters, it has grown to 2,600 branches, approximately 9.08 million borrowers and an estimated 97% of the borrowers are women.
Professor Yunus was awarded the Nobel peace prize in 2006. He has written several best-selling books including one called ‘Building Social Business’. I recommend that you read it to further your knowledge on this topic.
The success of Grameen Bank has inspired and paved the way for similar social enterprises such as Kiva.
Where Grameen Bank raised funds from donor agencies, the Bangladesh central bank and later by selling bonds, organisations like Kiva raise money through crowdfunding.
Kiva has lent $1.3 billion to 3.3 million entrepreneurs in 78 countries.
Not for profits
While the term ‘not for profit’ can, for legal and taxation reasons, define various types of organisations, I am using it here to describe charities and social enterprises.
Every charity has been set up for a specific purpose, be it restoring eye sight for children (Sight for All), alleviating poverty (St Vincent de Paul), or funding nurses for breast cancer sufferers (McGrath Foundation) however, the most successful charities use entrepreneurial skills and traits to serve their purpose.
Dr. Peter Pratje - The Orang-utan Project
For many not for profits, fundraising is an important part of their activities, but it is not always their sole reason for being. Countless organisations need ourdonations to continue operating, but their goal is behavioural change.
The Orang-utan Project does all of the things you might expect of a not for profit dedicated to saving Orang-utans. They call for donations, take bequests and operate tours, provide sanctuary and prepare orang-utans for release into the wild, but all of this is somewhat insignificant to their actual purpose which is to raise consumer awareness of the destructive nature of palm oil production - the very reason they need to do all of those other things.
It is estimated that 300 football fields of South East Asian rainforest are bulldozed every hour to make way for palm oil plantations – just allow that to sink in for a second.
The resource being gathered and deployed here is not anything as simple as finance or materials, but something much more elusive – the consumer’s conscience.
Given the sheer magnitude of food and consumables that contain palm oil, this is a big issue.
For profit, social enterprises
The Bread and Butter Project - Tania
For profit, social enterprisesoften begin as a philanthropic gesture but quickly discover, almost as a bi product, that their purpose and products are profitable
Such was the case with the Bread and Butter Project when Paul Allam convinced his business partner at the Bourke Street Bakery to help him set up Australia’s first social enterprise bakery.
The Bread and Butter Project is a successful, artisanal, wholesale bakery that trains and provides paths to employment for some of Sydney’s most marginalised and underprivileged citizens.
The Bread and Butter Project is able to boast that every one of their graduate bakers, since their launch in 2013, is sustainably employed.
When your product has a social conscience
I recently listened to an audiobook called “The Magic of Tiny Business: You Don't Have to Go Big to Make a Great Living’ by Sharon Rowe.
Don’t let the title fool you, there was nothing ‘tiny’ about Sharon’s business, she is the CEO and founder of Eco Bags - the original, reusable shopping bags.
Sharon, a young mother was working at a training company when she founded Eco Bags in 1989. It was a response to two things - the sheer waste of single use shopping bags and her desire to live life and run a business without compromising her lifestyle or the things she believed in.
Her ‘market research’ involved walking the streets of New York and taking note of compliments she received for shopping with reusable string bags.
In her book, she describes how she started by selling reusable Eco Bag shopping bags from a stall at New York’s Earth day celebrations in 1990 and her success there led to more markets before becoming a wholesaler.
In 2007, reusable shopping bags became subject to the ‘Oprah effect’ when Oprah Winfrey presented Eco Bags to her audience during that year’s Earth Day episode.
This publicity led to a swift uptake in reusable bags and ultimately bans of single use plastic bags in some states and territories with Eco Bags riding the wave and reporting $16 million USD in annual sales. Coincidently, South Australia, the place that I live in, is also a leader in container deposit legislation and is progressively banning the use of single use plastics for certain applications.
The ‘tiny’ in the title of her book does not refer to the size of her business but her approach and despite running a global company, she still makes time in her work schedule to swim every day.
At a local level, I enthusiastically mention GOGO Events, an Adelaide based social enterprise that creates and manages magnificent events.
So, what’s the big difference?
GOGO events, founded by Sarah Gun, is an internationally award-winning enterprise that employs marginalised people and provides them with a meaningful path to sustainable and purposeful employment in the hospitality sector.
All of their events, big or small, corporate or community, create a positive social and environmental legacy.
Social entrepreneurs and the sharing economy
While organisations such as Airbnb and Uber are often cited as examples of how the sharing economy works, neither of them is, in the strictest sense, a part of the share economy - they are both service model businesses.
Airbnb hosts rent their properties to guests while passengers pay Uber for their driver to take them somewhere.
Better examples include Share Waste - an organisation that connects people with excess green waste to people who can convert that green waste into compost or Grow Free an organisation that enables a network of home vegetable gardeners to share excess produce through small carts with other gardeners and the public.
While Share Waste doesn’t say how many contributors they have, their members are well supported online with interactive maps and a smartphone app to connect people while Grow Free has in excess of 170 members carts in its Australian network with a few more springing up in New Zealand and the United States.
5 steps to introduce a socially conscious purpose to your company or brand
Be authentic and select a cause or charity that you and your organisation can genuinely get behind, then make a long term and consistent commitment.
Ensure that the cause is a good fit with your organisation’s values and target market. This extends to making sure that the products you sell are consistent or at the very least, not counterproductive or potentially hypocritical. I’m thinking, in particular, of a large chain of liquor stores in Australia who recently supported Dry July. I am also thinking of recent adverts from the world’s largest cola brand extolling their environmental credentials and hi-lighting their recycling efforts.
Involve the entire organisation. I know of at least one large company that takes gold coin donations for their casual days. The money is collected and donated to a charity or cause that every employee voted on at the start of the year. Other companies have recruited their customers, giving them an opportunity to decide on which charities they support through a percentage of their purchase.
Understand that supporting a cause is part of your company’s marketing plan then immediately forget it and work generously towardssupporting the cause. The general public can easily distinguish between genuine support and when you are just looking for a pat on the back.
Extend your support beyond simply fundraising. Photos of the CEO handing over a novelty size cheque look fantastic on social media but their impact is limited. In my experience, it is better to be involved in many smaller and perhaps more meaningful projects throughout the year than a photo op at the end. That doesn’t mean you can’t promote your involvement, but reliable word of mouth and social media shares are much more valuable and effective than full page newspaper ads.
Social entrepreneurship is evolving and continuing to redefine itself. It is also growing. Cities such as Berlin are fast becoming global hubs for social entrepreneurs. There is also a strong relationship between a city’s start-up scene and the number of social ventures within it.
While there are a number of similarities shared between commercial entrepreneurs and social entrepreneurs, there is one essential difference to consider - social entrepreneurs have the propensity to solve the problems that governments, small business and corporates can’t or won’t … and that makes them increasingly influential within communities.
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Martin Haese MBA
Next blog post: Part Five – Hope for the best and prepare for the worst. What happens when things don’t go to plan?
Welcome to the Part Three of a series of musings on Entrepreneurship.
What is disruption?
Welcome to the Martin Haese Report. If you have already read my previous posts about entrepreneurs and intrapreneurs, you will have noticed that one word has influenced both - disruption.
For the last decade or so, the word ‘disruption’ has usually been preceded by the word ‘digital’ and many businesses have gone down the path of building their digital footprint with websites, online stores, blogs and dedicated social media teams.
These platforms are all valuable tools for businesses and even the humble corner shop should, at the very least, consider updating their details with Google. However, each of these digital tools are just that - tools.
I closed out my last post in this series with the statement:
“For many years, the biggest threat to most businesses was competitors with cheaper prices - a relatively easy problem to counter, but over the last decade or so it has been competitors with better ideas.”
Disruption happens when a new idea is enabled by technology.
I cut my teeth in the retail sector and retail has a long history of disruption. From the first chain stores of the Hudson Bay Company in the 1670’s through to mass production made possible by the first industrial revolution, disruption in the retail sector has been ever-present.
Southdale Centre, opened in 1956, was the world's first shopping mall. Designed by Victor Gruen, the shopping mall significantly disrupted the retail sector.
The advent of the department store in the mid-19th century, vending machines and mail order in the 1880’s and supermarkets, big box stores, credit cards and suburban shopping centres in the mid-19th century were each significant developments resulting in various levels of disruption. This has all happened in an industry that the pundits first pronounced dead in the 1880s when the Sears catalogue was produced.
In the last quarter century, we have seen a sharp acceleration in the pace of new technology and with it, an explosion of new ideas.
Suddenly, anyone with a computer can open a shop and take orders from around the world, but it will be new and better ideas that determine which ones will be successful or not.
In my last post I talked briefly about the epic disruption caused by the widespread use of the iPhone and I used it as an example of how it upended the photographic industry in a very short period.
By enabling access to the internet, smart phones became increasingly indispensable and adding a camera meant that our way of thinking about photographs was always going to change.
Smart phone technology didn’t happen in isolation - it required big leaps forward in both internet connectivity and wireless technology, but it has disrupted and destroyed many industries and created many new ones.
Happy 40th birthday - Sony Walkman
The Sony Walkman turned 40 on the 1st of July this year and it is important because this unassuming little box changed many lives.
The Sony Walkman turned 40 this year, forever changing the way we listen to music.
The recorded music industry emerged as a disruptor to the sheet music printers at the beginning of the 20th century. Phonograph records had been available since the 1880’s but back then, new technology took a little longer to catch on.
Recorded music enabled broadcast radio in the 1920s which brought music to the masses and with it came an explosion of artists, record producers, sound engineers, recording studios and companies, record player manufacturers and record stores.
Many industries emerged from that first idea and the music industry grew apace.
Video killed the radio star … or not?
Video Killed the Radio Star by the Buggles was released in 1979 and the song predicted the demise of records and cassette tapes. It was, unsurprisingly, the first video aired on MTV in 1981.
Coincidentally, the beginning of the disruption of the music industry began in the same year with the release of the Sony Walkman - it was the triumph of an extraordinary idea over an otherwise good one.
The Buggles predicted that the future of music would be visual, in the same year that the Sony Walkman was released.
Up until that point, music wasn’t very portable - at least not in the way it is today.Radios, record players and cassette decks were getting smaller, but most people still listened to recorded music in their cars or more commonly in their homes.
Music videos seemed like the next big thing, a logical next step forward. However, music videos weren’t revolutionary as adding visuals didn’t radically change the way people listened to music, only their visual appreciation of it.
The revolutionary development or ‘better idea’ was in fact allowing people to listen to their favourite music anywhere and at any time and the industry continued to grow.
So, where did it all go wrong?
Even better ideas.
Advances in technology led to digitised music in the form of the compact disc and later digitised music files, stored on your device or on the cloud - streamed, downloaded and endlessly shared.
By making the physical product redundant, the music industry has saved billions of dollars but that in turn has led to the demise of many jobs in the associated industries that supported it.
Some argue that it has also affected the quality of new music - when people paid for records, we had David Bowie - now we’ve got Chris Brown.
Global disruption is usually easy to identify but what of the small-scale disruption going on around us every day?
Talking to business owners, I have noticed that many are doing it tough while others seem to be doing better, and this is most apparent in the food and beverage industry.
In the last few years we have seen the emergence of a new kind of business owner, one who is both entrepreneurial and curatorial.
This new retailer has observed a niche in the market and has created and ruthlessly curated their business to that fill that niche.
A tale of two cafes
Not that long ago, successful cafes were much larger and had seats for 80+ people.
They sold coffee and served a tried and tested menu of focaccia, bruschetta, pizza, pasta, cakes and ice cream - something for everyone.
Patrons would find a table, then go to the counter to order their food, shuffle across to another counter to order their drinks and come back with a table number and wait for their food.
This format worked well for a long time but lately that format has been challenged by a new type of cafe.
A new cafe format has emerged to cater to a new generation of patrons
For starters these new cafes are harder to find. They pop up in the least expected places. They don’t always want or need a mainstreet shopfront and they don’t need to pay inner-city rents because there are plenty of customers and very little competition in otherwise under-serviced suburbs.
These new cafes are a lot smaller and less likely to be fitted out by a commercial shopfitter - they often have mismatched chairs and tables and the smaller size means they are quieter and more intimate.
Most of these cafes offer a wide selection of vegan and gluten free options because they know that an estimated 12% of Millennials identify as vegetarian or vegan and the percentage of Generation Z is likely to be even higher.
Don’t be surprised if your cup and saucer or knife and fork don’t match - it’s almost as if they’re saying, “who cares about the utensils - we’re all about the food.”
The lessons for traditional retail
If food and beverage operators are finding niches and exploiting them, why aren’t other sectors of the retail industry?
There is an orthodoxy that every retail business should be heavily data driven like the Fast Moving Consumer Goods (FMCG) sector - an orthodoxy that involves no human curation and puts them into direct competition with the likes of Amazon.
I recently read this from Seth Godin in a blog post about curation:
“Amazon is good at selling everything, but they’re terrible at selling a thing … The platforms (Amazon et al) are built on the idea that the audience plus the algorithm do all the deciding. No curation, no real promotion, simply the system, grinding away. This inevitably leads to pandering, a race to the bottom.”
He goes on to say that, in the past:
“Curators and their curation led to promotion and attention. There was a cost to picking junk, and a benefit to earning trust.”
and it is this trust that builds customer loyalty much more effectively than a rewards card or complicated points scheme.
It is also entirely possible that many retailers have failed to change with the generational shift in the market. In some cases, the business practices that made them successful and endeared them to the Baby Boomers and Generation X are now their biggest liability with Millennials and Generation Z.
Disrupting your own customer base.
What do Nike, Michael Hill Jewellers and Gillette have in common?
Until recently, they all had a younger target demographic but an older client base - the customers that made them successful were becoming their liability.
When you think of Nike, Nike wants you to think of young, lean and strong sporty types, but their loyal customer base is often the exact opposite.
Michael Hill was just another jeweller selling expensive baubles to Baby Boomers using the imagery of Generation X.
Gillette is a heritage brand and part of the global Gillette/Schick duopoly for razors, both are under increasing pressure from subscription razor models (another ‘better’ idea)
Millennials are just as rebellious as every preceding generation and wearing the same brand shoes as your dad or the same ruby earrings as your grandmother was never going to wash with them.
Faced with this reality, those companies made concerted efforts to win Millennial customers by deliberately letting go of some of their existing customers.
Colin Kaepernick, Quarterback for the San Francisco 49ers, began protesting his country’s treatment of minorities in 2016 by kneeling during the national anthem and he continued to do so at every game throughout the 2017 season.
Many Americans were incensed and Kaepernick was heavily criticised.
Under increasing pressure, Kaepernick opted out of his contact to become a free agent but was not picked up by another team.
While standing up (or kneeling) for what he believes in did not align with any of the other NFL teams brand values, another brand thought Kaepernick was a perfect fit.
In September 2018, Nike launched a campaign to celebrate the 30th anniversary of their “Just Do It” tag line.
Nike chose Colin Kaepernick to disrupt their customer base
The campaign featured Serena Williams, skateboarder Lacey Baker and others but it was the inclusion of Colin Kaepernick that ‘inspired’ some Nike wearers to make YouTube videos of themselves threatening to boycott the brand and burning their Nike branded T-shirts and socks.
It would be easy to think Nike misjudged public sentiment, but I would argue that Nike doesn’t make mistakes like that. It was instead a calculated attempt to distance themselves from people they didn’t want to wear their brand in order to attract people they do want wearing their brand.
The campaign resonated with Millennials and Generation Z and Nike sales and shares soared in the direct aftermath.
Michael Hill Jewellers
Support for marriage equality has been high in western democracies for at least the past decade but especially amongst younger people and inter-racial marriages barely rate a mention.
But still, there was controversy and like many other things that older generations get ‘worked up’ over, most Millennials simply couldn’t understand what the fuss was about.
This sentiment was fertile ground for marketers tasked with differentiating their client from their competitors and in 2015, Michael Hill Jewellers released their stunningly beautiful ‘we’re for love’ campaign.
This two-minute-long advert marked a departure from hackneyed jewellery advertising with their unrealistic portrayal of glamorous women on the arms of handsome men or sparkly product shots.
This ad shows product but if you blink you will miss it - the focus here was on real people and real love, no matter what form that takes.
I remember bumping into a jeweller after this ad was released and it came up in conversation. He was shocked that they chose ‘such ugly models’ by which I assumed he meant ordinary people.
This ad signaled to younger people (by far and away the largest target market for wedding and engagement rings) that Michael Hill was the destination of choice.
There’s nothing trendy about razor blades - at least not since the heyday of Punk Rock in the 1970s and it’s difficult to instill brand loyalty in what amounts to a grudge purchase.
Until recently, the razor blade duopoly had little competition but the subscription models have chipped away at the younger market (older users generally don’t buy their own blades) by removing the hassle of having to remember to buy them, then lining up at a special counter and having to ask for them because they aren’t kept on the shop shelves.
Earlier this year, Gillette set out to win Millennial hearts and minds with an advert squarely aimed at toxic masculinity with the ad riffs on Gillette’s tagline asking, “is this the best a man can get?”
The ad caused an immediate backlash from some consumers and again, angry customers posted videos of themselves binning Gillette products on YouTube.
But for many, the ad tapped into the horrific revelations exposed by the #metoo movement and shone a light on other aspects of society that are all too often tolerated or excused.
Here was a big corporate calling out bad behaviour, no matter the cost of doing so.
It is difficult to gauge the impact on sales, Gillette reported that sales were down 3% on the previous year but without access to historical sales data, we don’t know if 3% down on last year is an improvement in their long-term sales trajectory.
We do also know that Gillette management reported post campaign sales were in line with pre campaign sales suggesting that Gillette gained as many customers as they lost.
5 ways to become a disruptor.
1. Embrace disruption
When speaking to business owners about disruption, they invariably see it as something they must counter rather than something they should be actively encouraging.
I can guarantee you that your competitors who are growing and thriving, those ‘challenger businesses,’ have a very different view of disruption - they see it as an opportunity. It often helps to cast your mind back to where it all started and think about how you would open your business today, knowing all that you know now.
I recently read about a senior executive who displayed a large framed poster in front of his desk that simply read ‘THINK’.
His reasoning was that we all spend far too much time working in the business rather than working on the business and the poster was a constant reminder to stop occasionally and think about the bigger picture.
When I owned my retail business, I consciously set aside most Fridays to work ‘on’ my business and not ‘in’ it. I credit this discipline as being one of the key reasons why the business was able to achieve size and scale faster than many others.
I often break the process into smaller pieces, concentrate on one aspect of the business and depending on the situation put myself in the customer or employees’ shoes before looking for pain points and opportunities.
Every now and again, someone will ask me for business advice. If it’s an industry I’m unfamiliar with, I will often ask what their competitors are doing and I’m frequently shocked by how many people say they don’t know.
Getting out and about to see what the market is doing is one of the most important things you can do - If you don’t, you’re running your business in an echo chamber.
4. Educate yourself
You’re already reading my blog so that’s a great start but also consider booking yourself into an industry conference or trade show, take a short course in social media marketing or read books or listen to a business podcast.
I am a voracious reader and often come across books, biographies, journals and articles that I sense you would benefit from. To provide you with even greater value, I will soon share some of these with you in future posts on the Martin Haese Network.
You have the entire sum of recorded human knowledge at your fingertips - use your time wisely.
5. Ask for help
Nobody expects you to have all the answers, so ask for help.
Your first step is to ask your employees (see The Talent Within: Entrepreneurial Employees) but failing that, customers, colleagues, close friends and family each have different perspectives and they all want to see you succeed.
Thank you for subscribing to my blog.
If you haven't already joined my network, you can sign up here for free and please don't hesitate to recommend my blog to any of your friends, family or colleagues who share our common interests.
With kind regards,
Martin Haese MBA
Next blog post:
Part Four - Social Entrepreneurs - can the world’s problems be fixed by entrepreneurs?
Just stop and count how much plastic is in your immediate vicinity right now.
It’s in our phones, our clothes, the seats we sit on – plastic is everywhere.
Plastic is so useful that we produced an estimated 7.8 billion tonnes of plastic between 1950 and 2015 – that’s more than 1 tonne of plastic for every person on the planet today.
But there is a difference between ‘useful’ and ‘convenient’ and the line has become increasingly blurred.
In 2015 alone, we produced 381 million tonnes of plastic and 146 million tonnes of that was used for packaging.
That’s around 38.5% of total plastic production going into packaging – the stuff we use once and throw away.
You can read more about global plastic production, uses and disposal at ourworldindata.org
South Australia has consistently punched above its weight when it comes to recycling and reducing consumer waste – we developed a container deposit scheme 40 years before the rest of Australia and introduced a ban on plastic shopping bags nearly a decade before the other states even noticed they were a problem.
It seems like every South Australian has a story about crossing our borders and noticing the cans and bottles littering the roadsides.
So it’s no surprise that South Australians are leading the way again.
Earlier this year the SA Government released a discussion paper and subsequent stakeholder engagement found overwhelming public support for government action to reduce single use plastic consumption.
Recognising that businesses will need a transition period, the government will act on single use plastic in three phases;
Phase 1 – banning plastic straws, cutlery and stirrers – starting as soon as they can get legislation through parliament in early 2020 and the minister has assured us that valid concerns from disability and aged groups have been heard.
Phase 2 – banning polystyrene cups and polystyrene takeaway containers as well as ‘oxo’ degradable plastic bags (the ones that are degradable over a longer period of time but aren’t compostable or biodegradable)
I suspect there are many who would like to see Phase 2 brought forward but the government has wisely chosen to flag these changes up to a year in advance to give businesses time to transition to alternatives.
Phase 3 – Will see more consultation and research into banning or further recycling options for other items such as takeaway coffee cups, thicker (non compostable) plastic bags and other takeaway containers.
South Australians will do what they’ve always done – we will adapt our behaviour and lead the rest of the world.