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In the last write up under Systems & Structures on Bizaura.com, I tried to make a strong case for the need for systems and structures if our dream businesses were not only going to become a reality but thrive and last long, even outlive us (and why not?!).  I did promise to get into one of the many reasons why our businesses tend to have no systems and structures: the kinds of people who attempt to start a ‘business’ of their own and why they do so, in the first place.  We shall look into this and find an antidote today.

Anger
If there is any ‘good thing’ about anger and hunger vis-à-vis entrepreneurship it is this: many great businesses were born out of them.  Anger about an unmet need, inaccessible product or poor service may trigger some creative juices and the next thing we know “All Car Solutions Ltd.” or “Prompt Printing Company” has been born.  I know a young man who got so angry about the kind of unreliable and inefficient internet service he was getting that he finally worked hand in hand with a company abroad to start a new IT company in Ghana which eventually provided the kind of service he wanted…and of course, for many others also.

Many businesses are born out of angry ‘technical’ people who think that the owners of the company they work for are cheating them: “We do all the work and they get all the money.”  You can imagine an angry expert chef shouting: “My boss doesn’t even know how to cook a single meal.  I stand on my feet all day, cook such great food and at the end of the month he pays me so little while he and his wife keep enjoying all the money.  By the end of this week I will be leaving TO START MY OWN BUSINESS.

People with technical knowledge/expertise (they may be doctors or lawyers, auto mechanics or bakers) storm out of being employed to start their own businesses without realizing that the technical aspect of any business constitutes about a third of what it actually takes to run it.  What really makes a business a business is employing the right people and building systems and structures and efficiently running them.  I have seen superb doctors fail miserably at their attempt to run a private clinic.  They had excellent technical knowledge (how to take care of patients) but did not have the people, systems and structures to succeed.

Hunger
First, in these days of acute and rampant unemployment (even of graduates!) many people find themselves as “forced entrepreneurs” so they do not go hungry.  Also, we have a lot of people who have seen the wisdom in having other sources of income (what I call “learning to separate your profession from your business”) in order to be financially sound.  So you have nurses running taxis and teachers owning provision stores.  I’ve seen a third group of people getting into entrepreneurship because of ‘the fear of hunger.’  These are people who have noticed that if they do not get their act together now and prepare adequate for their post-pension lives, SSNIT will give them a heart attack!  One man who worked in the Ghana civil service for 44 years retired home on 1.2 million cedis and is entitled to ¢106,000 monthly for his family of seven!!  You tell me, why will a ‘wiser’ junior colleague wait for such a thing to happen to him also?  The way out, many utter to themselves (apart from those who will get into corrupt practices like bribery, extortion, over-invoicing etc.) is, “Charley, I have to start something;” meaning, a business.

While there are a lot of merits in all the above ‘anti-hunger’ sentiments in starting a business, like the angry technical people, hunger may be a great emotion to kick a business into being but is not enough to keep it running.

Hanging in there
So what is the way forward?  Everybody who is in business today, or intends to start one in anger or hunger, must recognise that a business grows by having the right people, systems and structures and not mere emotions.  Every business, according to Michael Gerber (in The E Myth Revisited), requires three kinds of people: the technical person, the manager and the entrepreneur.

The entrepreneur is the one who sees opportunities, the visionary/dreamer, the fire underneath the business.  Being so creative he’s always thinking about what new thing to do or people to reach in the near future and would bully, harass, scream, flatter, threaten… anything! to keep the business moving to the next level.  The manager is the not-in-a-hurry, pragmatic one who thrives on planning and wants order.  The manager, based on what system (way of doing things) has worked in the past wants to stick to the status quo and doesn’t want the boat (business) to be rocked.  The manager sees as problems what the entrepreneur sees as opportunities and so it is no wonder that the two are usually at loggerheads.  But without the entrepreneur there will be no vision or change and without the manager there will be no business after a year!  A healthy tension is advantageous to the business.  And who is the technical person?  He is the doer; he just does the work of the business (eg. making shoes in the shoe factory) while the other two take care of the business of the work.

A few ‘rare species’ of Homo sapiens have all three abilities (natural or acquired) but you have to honestly assess yourself and discover which of these three you dominantly are.  The next step then (if you are serious about building a business) is to acquire any portion of the tripod that you don’t have by learning or hiring the services of those who’ve got it.  I, for example, tend to be entrepreneurial in the fields I have technical knowledge/skills in.  Knowing that I’m a terrible manager, I’ve had to employ the services of at least three such people!
 
A McDonald’s Conclusion
Dick and Maurice McDonald were typical technical people and efficient managers.  Since they started business in 1937 till the mid-fifties, they had only been able to sell the concept of franchising McDonald’s to just fifteen buyers, only ten of whom had actually opened restaurants.  It took the entrepreneurial Ray Kroc to turn things around completely when he struck a deal with the brothers in 1955.  He formed the McDonald’s System Inc. and immediately bought the franchise so he could use it as a model and replicate it.  He hired the best of people and even took no salary in his first eight years with McDonald’s!
Believe it or not, between 1955 and 1959 Ray had succeeded in opening 100 restaurants and four years after, there were 500 McDonald’s dotted all over!  Today, in no fewer than 100 countries from America to Asia, Africa to Australia, one can find not less than 21,000 such restaurants!

So you see, while anger and hunger are great emotions that birth businesses; they are not enough to grow them.  No matter how angry or hungry you are, you need to find the necessary people and create the requisite systems and structures to make succeed in business… and for long.  From the next edition of Systems & Structures onwards, we shall start delving into the specific systems and structures needed to keep you in the business of doing business.

Dr. Yaw Perbi
(CEO, NEOparadigms Ltd)

Last changed: Feb 09 2010 at 8:09 PM

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