A National Business Anthem (Part 2)

The second dilemma in terms of employment growth regards aspiring new business. Employment growth in existing business is not enough to build an economy, there should also be employment growth through businesses growth. The problem is that a vast percentage of entrepreneurs cannot come up with the capital to finance their prospecting initiatives. Financial institutes will and cannot set them up as they only have your money to work with and you will probably become horribly depressed to hear one sad Monday morning that you cannot draw money from you bank account as the adventurous manager blew it on another person’s business idea over the weekend. Foreign investors are scarce as the political risk is too high in South Africa and the tendency is still to push the financially successful away rather than to pull the closer. So where, must the finances come from then? These people don’t have fixed assets to put up as collateral or rich relatives to lend a helping hand (Come to think, neither do I). Regional stock exchanges? I doubt if they will deliver in a financially viable pull towards investors, but I could be wrong. In the old days stockvels had value, but you must bare in mind that the environment was less complex and much more “open”. If Gotliep Jones announced in a pub that he had a gold claim and anyone interested could throw in twenty Pounds for x amount of shares, you would probably only loose your money if he did not actually strike gold. The risk is more accessible and you could monitor the activities much closer. If a stranger invites you today to do buy shares in his initiative, it is a totally different story. His business would be much more complex and less transparent than considering the probability of striking gold and secondly,
he could easily run away with your money and you will never ever track him down again.

So, the anthem. We have all the basic elements of the vision, we only have to compile the lyrics and then tone-set them. The chorus is dedicated to the decline of the symptoms of the real problem since they will fall away as the real problem is cured. Here’s my attempt, see if you can improve on it and let’s make it a living reality:

Verse one:

Let us work much more harder – and also so much smarter
Then our products will sell – and things will be well
As businesses will grow – so poverty will go
For households will score – through employing many more
This’ll allow our economy to expand – in our beautiful mother land

Chorus:

Down comes the crime
There simply is no time;
Up goes the health
Followed by more wealth;
There’s so much dedication
Through better education;
All races are so kind
Since money’s colour blind
x 2

Verse two:

Give the hungry not a dish – but equip them to catch their fish
For new business to make a start – let’s think wide and very smart
Allow our systems to adapt – to place them on the map
Good business is contagious – through all the different ages
Entrepreneurs are what we need – to plant the mustard seed

OK so I’m probably considered not ‘all there’, but as the word goes, Langenhoven was not entirely himself either, when he wrote Die Stem. I firmly believe whilst seeking serious solutions to our problems we have to lighten up somewhat regarding our relationships and practices. We cannot really teach anybody not to get AIDS or not to be a racist or not to steal or not to worry, but if we apply our attention to the real leverage points in terms of the ultimate remedy, a sound growing economy, these things will go away as symptoms of the real disease. This country needs an all encompassing holistic intervention touching all corners of society – adapting the education system to expose even the youngest to these business principles so that they can take responsibility and empower themselves since day one; providing parental training so that we set the right example to the little ears who are busy molding their mental models; it’s too late to leave it to business. Japanese students who stayed with families in our country for some time, all reported that they found the working parent to come home complaining about everything at work. Being irritated, wishing it were Friday and thanking God when Friday arrives, craving for leave and early retirement, expressing all these things loudly on a daily basis at home. What do the “little ears” hear? “Work is a bad thing, it is the place where my parents become unhappy. I dread the day I have to go there.” Does the shoe fit? Think about it. In Japan the parents and teachers make a conscious attempt to make the future business people believe that work is a
good thing. Japanese kids are looking forward to this wonderful day and you don’t have to beg or drag them to work. Some key players in South Africa will have to come together to plan this far-reaching intervention to launch a total onslaught on all parties in the economic mix.

For all this we need (maybe a bit less democracy at present and) a vision from the top, a destination … and why not make it alive through an ever-green Business Anthem that will reach all ears at all levels?

By Dr. Deon Mushavi Huysamen:

Published: Management Today – May 2002

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A National Business Anthem (Part 1)

Our national anthem is certainly the best in the entire world and it gives that warm feeling of unity and collective power and it is most suitable to sing prior to any game of sport (and the opening of Parliament). It ignites that needed sense of dedication and passion towards the contest at hand. It harmonizes with the vision of the players, namely the world title. That is probably one of the main reasons why we can consider ourselves as world class at sport (I’m not sure about Parliament) – vision and clarity of direction, brought to life every time the anthem is sung before a match. “If you don’t know where you are going, any road will take you there.” This is very true of the building of a nation. We cannot enjoy our anthem on an empty stomach. Neither can we enjoy political freedom on an empty stomach. Business is what is building a nation, not sport. The lack of an explicit powerfully communicated vision towards the building of our economy is what creates resistance to sacrifice and brings focus to symptoms instead of rout cause. Maybe the creation of a business anthem that we sing every so often at our seminars, sitting of Parliament, before work and at school might help to bring the awareness of the vital importance of building a growing economy. Obviously, in contrast to national anthems primarily based on elements of history with emotional undertone, the business anthem must be based on the future with a flavour of dreaming, but ingredients of critical reality.

The first step is to explore what these critical fundamentals of economic growth are and to compile them into a basic theme that is simple, effective and achievable:

Economic growth can for purpose of simplicity be expressed as the growth in GDP of a country. That is the total of production, which are in fact exchanged for real money of real customers. The two basic fundamentals of economic growth are,

  1. Employment growth, and
  2. Productivity growth, where the first is a consequence of the second.
    (It is of no use to have only a few working very hard neither is it of use to have many working very little – we need many to work hard)

The mathematical relationship is therefore straight forward: Economic growth = Employment growth x Productivity growth. If the status quo is: 4 = 2 x 2, and we wish to increase economic growth to 8, then it means that either 8 = 2 x 4 (the same number of people working twice as hard as before, or 8 = 4 x 2 (double the number of people working at the same rate as before).
I don’t underestimate your intelligence, but it is a vital principle as it implies that artificial employment, not leading to value added, will not lead to economic growth: 4 x 1 = 4 and not 8 as the newcomers are not performing, thus the productivity factor for the group halved to become 1 instead of 2. It is therefore critical that in existing business additional employment comes as a result of productivity growth, which implies more efficient production therefore better value-for-money products therefore a greater demand for products leading to a greater demand in employment.

In view of creating a business anthem the second important issue is employment growth. First let’s have a look at a simple economic system:

Business exist to produce market offerings (products, services, etc.), which they sell to customers. These customers are primarily from the local households. Where do they get the money from to buy these products? From wages they earn from these businesses in exchange for their skills to produce these market offerings. The amount of money possessed by households is therefore a critical factor and seeing that they obtain them from employment opportunities, the latter is vital. There can exist basically two extreme scenarios in an economy as far as existing business is concerned:

1. The vicious downward spiral: Productivity levels are low resulting in the market offerings to be considered low-value-for-money and the demand decreases. As the demand decreases, businesses down-size (Oops! Sorry, I meant right-size) and households as a whole therefore have less money to spend on these market offerings. As they spend less, the demand goes down and companies right-size again or close down. As they do that employment drops again and ….. (Hallo, South Africa!). I forgot the chorus: Then employees go on strike not to be retrenched and productivity comes down as a direct consequence and the downward spiral gets a powerful downhill boost and ….
2. The virtuous upward spiral: Productivity goes up and better value-for-money market offerings are produced leading to an increase in demand leading to an increase in business activity requiring more employees resulting in employment growth resulting in more money in households leading to more spending capacity on these market offerings leading to an increase in demand leading ….I forgot the chorus: The better the business, the happier the employees, the happier the employees the more dedicated and motivated they are resulting in an increase in productivity leading to better value-for-money ….

By Dr. Deon Mushavi Huysamen:

Published: Management Today – May 2002