Business 2.0
Rethinking business models for sustainable future
Business unusual
Business, as defined in Wikipedia is the activity of making one’s living or making money by producing or buying and selling products (such as goods and services).[1]
The first day of block two, of the program, was presented by Dr Melanie Prinsloo who introduced us to the concept of shared value, which looks at relooking at extending stakeholders of a business beyond the scope of management, shareholders and employees. The current business model is to generate returns or profit for their shareholders. This model does not look at the impact of the business on communities, society and environment it operates in. This means we need to reboot the business model to be more human-centric, have some Ubuntu, putting people and environmental impact at the same level as profit and returns. This makes us enter an era of the business unusual where business cares about creating a sustainable model for its operations and its measure of success is not just profit. Looking around some businesses have started to adopt this new line of thinking, but this needs to be embedded into their strategy and operation and not just with their sustainability report[2].
Sustainability reporting right now to me seems like a ”checkbox” exercise and doesn't really address any issues, in fact, has the opposite effect where companies use it as a marking gimmick. A sustainability report is an organizational report that gives information about economic, environmental, social and governance performance. Let's look at Coke-Cola one of the world biggest beverage companies and they are also the most polluting brand in plastic, plastics are a big issue in the environment and Coke-Cola haven't done much to address this issue cause they can just switch to glass containers which would have a huge impact. Instead, they are sponsoring people to clean up the pollution, they are addressing a symptom, not the cause.
Business and organisations are created by trying to solve social problems which then those members of society become their customers. This means the business needs to be more innovative and creative about how it goes about producing or buying and selling product and services. Looking at the electronics school which operates as a self-funded business they have changed the way they operate and incorporated basic skills of cooking, cleaning, maintaining the school to teach their learners how to be complete humans. This how business should tackle humanity challenges in the face of the Fourth Industrial Revolution is that computers will be smarter.
The Fourth Industrial Revolution is about more than just technology-driven change; it is … how organisations create value and even what it means to be human.[3] Therefore we need a new way of doing business that but the interest of humans and the environment on the same level as profit, this will ensure that businesses of the future contribute to the sustainability instead of taking away and creating other problems. This is more relevant in a country like South Africa where we have huge equalities between the rich and poor, we need to rethink how we do business and I call this era Business 2.0.
Business 2.0
Looking at the business that has made a huge impact in the past decade, we can see that business-like SpaceX and Tesla were started not only for profit but for solving real-world issues that would have a profound impact on humanity in the long run. These businesses present the basis for “Business 2.0”. Customers and partners of these businesses believe in the purpose of why the business exists so much that they willing to buy products from the business without getting anything immediately. This enables Tesla and SpaceX to develop their products and services using the customer’s money. This is only possible because the mission and vision of these businesses are aligned with their customer's values. The most interesting part is that the founder and leader behind both these businesses is a South African export Elon Musk.
Coming back to the motherland South Africa, when we went to the market in downtown Johannesburg, we learned that most of the people conducting business never went to school, however, learned how to operate their business from their parent who learned from their parents. The knowledge was transferred down, this means we can teach old dogs’ new trick on how to create a business that makes a return for the shareholders but also benefit the greater community which are their stakeholders. This also presents a great opportunity to cause if we teach these entrepreneurs the concepts of “Business 2.0” then they will pass the knowledge down to their kids and their kids will pass it to their kids. The cascading effect can be compounded due to the Africa youth population and development stage as people are looking for new and creative ways to solve the challenges that plague the continent.
For us to really change the current status-co, we need to first understand the role of business and how society influences business and industry. This is because everything that plays out in business is microcosm of society. Bias, greed, corruption and prejudice are also part of how businesses have been run and we also need to change this to make it more inclusive and allow for more voices to be heard. South Africa is the most unequal country in the world which means the poor are always impacted and affected by the decision of the rich and powerful and don’t have ways of communicating the frustration or condition. This is creating a powder-keg where we can experience revolt which would affect the rich more as they have more to lose. This is why we have to think about sustainability in everything we do as it ensures stability.
This takes me to day two of the emersion where we sat with Jabu and Anton who made us look and understand at how business can start changing this landscape only if we start listening. The training went into how as entrepreneurs we are quick to come up with answers but never really understand or acknowledge the problem which means we misdiagnose it and never really solve the issue.
This exercise really showed me as a man, how much I don’t really look and interrogate the power that I have by virtue of just being a man. It also made me aware of how I can use some of the challenges that I have as bias and stereotypes in my advantage by quickly spotting them and changing the conversation to make the people in the room aware of them in a respectful and empathetic way. With power comes responsibility, every self-respecting geek knows this line, and day two really made me exam every advantage and power I have as a young black man, as a person from a previously disadvantaged background, we hardly reflect or interrogate this connection cause we are focused on the power and privilege we don't have more than what we are doing with the power and privilege we have. That as the person and individual you should use it to effect change in your corner and it starts with you as an individual.
Business is a collection of individuals driven towards a goal and as a result, it is a reflection of society and how we run and conduct business speaks to the type of impact we want to make on society. This means as a business leader, I must take the time to really look at the culture and practices of my businesses to check if they are aligned with the type of values and standards I aspire to and those of the greater community.
Reflections
Day three was a day of we learn about finance and investment in the most innovative way by understanding that the numbers and how they can say anything you want them to say. This has been illustrated by the climate we find ourselves in as a country with audit firms found to be complicit in fraud and other criminal activities. This was again having a shortsighted view of their role in the community and how that will affect others adversely cause clearly they stood to benefit but at what is the cost?
Therefore, as an entrepreneur, we are at the forefront of setting the tone as we start businesses and create initials values and standards. We really need to understand how to read and interpret the numbers to understand your financial outcomes as a business but more importantly on the people and environment. This, however, is just steps one and you need to also be on the ground to get all the facts and data of how your business or investment will be doing and whom it will impact.
This was perfectly illustrated by going to Ponte Building in Barea, Johannesburg where we got to understand the history and financial health of the Ponte Building rental business, this illustrated that now all profitable business looks the way you expect, and you need to really look deep at what the numbers are telling you. You also need to look at the impact of your actions of the greater community as a 2.0 business and how your actions can have a trickledown effect.
The history of Ponte building shows how a business can also pivot into an area of business that it never thought it could go into and make them profitable while providing a valuable service for the community. To think a building that was build in the heart of apartheid in the 70’s for a few affluent white people now houses the bottom middle class is ironic and goes to show that having a vision and mission for a business is more important than just profit, cause the model would never work in the new setting the building finds itself.
The whole block was how social entrepreneurship and collaboration with a devised group of people will help create an environment for creativity to thrive to assist us to be more human while creating a business that is more aligned with humanity. This is import as computers are becoming smarter but are not human and do not have empathy and the true understanding of the human condition.
