50 Years of Strategy: Why Most Entrepreneurs Fail (And How to Win) - Nic Frangos

Speaker A: Bill Gates saw the forthcoming miniaturization of microchip. My dream. I believed absolutely that it this was going to become biggest industry in the world. Now many people ask me, why did you leave Unilever? You were the youngest senior manager in the world. You were on the international list, which meant that I would be CEO, uh, or chairman by the age of 40. Why did you leave? The reason why I left is why entrepreneurs do what they do.

Speaker B: So a certain philosophy of don't get too precious about your product because at some point or another it's going to change, it's going to get disrupted.

Speaker A: Commonly what I see, entrepreneurs go about it the wrong way. They go for a search to find something that they can convert into a purpose. Wow, that's an endless search. Woolworths, brilliant operation in South Africa. Best food, profitable. Fantastic. They now want to get into Australia and buy David Jones over 20 billion. I think they've lost just about all of that.

Speaker B: Hello, uh, and welcome back to the founder files. As you are very familiar, uh, over all this time is. I don't usually read because I want this to be conversational, but the man that I'm about to speak to has got such an extensive career that I actually really had to prepare an introduction. So here goes. Today I'm speaking to Nick Frangos, someone whose story you probably haven't heard before. But his fingerprints are all over some of South Africa's biggest business moments. Nick started out at Unilever, where he became the youngest senior manager at the time in the world before stepping into entrepreneurship and building what became one of the country's most successful technology groups through Mercedes Information Technologies or MIT M. He went toe to toe with the global giants of the day, Think, IBM, icl, Burroughs. And he was able to take them head on by doing the opposite to what they were doing. Decentralizing when they centralized, partnering with entrepreneurs when they controlled everything, and driving innovation when they relied on bureaucracy, that strategy paid off in a big way. His team pioneered Cash Paymaster Services, the biometric payment system that reached millions of people and even ended up in the Smithsonian in Washington. They even pulled off the famous sardine eating. The whale story of MIT purchasing Unisys, which is about three to four times the size of MIT at the time, and paid that back over four years, just four years from free cash flow after doing that. So MIT was named the best non listed company in South Africa, then listed the subsidiary Mercedes Data Core, one of five public companies with a record 208x over subscription in their IPO and through it acquired a 49 stake in Dimension Data. Along the way, Nick was recognized as man of the Year and Personality of the Year in South African tech. After three decades as a hands on operator, Nick moved into investing in private equity. He partnered with Ethos on the global acquisition of Dunlop, became an early background advisor to Anchor Capital, and in sport, partnered with Ernie Else, helping build the business behind the brand, from vineyards and clothing lines to golf course design and even reviving the South African Open. He also served as the global Chairman of ypo, earning their inaugural Distinguished Service Award. But beyond the deals and all the accolades, Nick is known for something more fundamental. Integrity, decisiveness and a relentless focus on customers over personal ambition. Over the past 20 years, he's distilled that experience into a practical strategy methodology. One that we've had the privilege of working with and being trained in directly from him. And it's the backbone of what we do at Med Evolve today. In this conversation, we'll dive into Nick's journey as a builder and as an investor. Why strategy matters to entrepreneurs at every stage, the core of his methodology and what you can apply right now, how he's applied as a CEO, as an investor and as an advisor, why he's backing us at metavolve, and what's next for the methodology itself. Welcome to the Founder Files, the podcast that's like eavesdropping on a conversation with a successful entrepreneur over a fireside chat. Join me, M. Cameron Coutts, through this unique experience of unfiltered stories and insights from scaling founders around the globe as they share their ups, downs and everything in between. Nick, welcome to the Founder Files.

Speaker A: Thank you, Cam.

Speaker B: It's about time that we're having this conversation.

Speaker A: Yes.

Speaker B: Uh, so I guess just to kick it off, I'd love to hear about your story. Starting off at Unilever, um, and maybe even a bit before that. Just like, for the people that want to get to know you, how did your career really start?

Speaker A: I come from a family, um, where on the plus side, my mother was extremely strong, good values, best bit of advice I ever had, just get on with it. Um, I've tried to follow that most of my life. So because of that situation, I went to boarding school at the age of six. And then when I left boarding school, I wanted to go to university, but my parents didn't know what a university was. Wanted to go to Cape Town, actually. And I lived in Rhodesia. Uh, so I registered, I borrowed the money from the Rhodesian government, hitchhiked down, got there a day earlier uh, than I should have because I hadn't checked when the residence was going to open. So I slept on a park bench, Rhodes Memorial, because I didn't know anybody in Cape Town. But, uh, all of those were positive experiences. And then when I left university it was clear to me I had to support the family. It was clear to me that I had to take life seriously. So I looked for big companies to work for. I didn't want to take any risks. So it was a choice of either IBM or Unilever because technology had uh, always fascinated me. And that's another story which we'll get to. But I joined Unilever and it was a brilliant decision. It's still today the best organization I've ever worked for and one of the best experiences in my life.

Speaker B: What were some of like the main principles that stuck with you then in your experiences that have carried through throughout your life?

Speaker A: Well, Unilever was my first job, so I had nothing to compare it against. But when I look back and reflect on it in hindsight, having experienced many other companies since then, you can really appreciate the good things. So for example, at Unilever, first most important points, everybody I dealt with had integrity, a high level of integrity. That was a characteristic of Unilever. Now not all big global companies have uh, high levels of integrity, but Unilever certainly did. Then uh, what really impressed me was the customer focus. At Unilever, everything revolved around the customer. This was 1964, this is 2025. Today people are still talking about customers. How do you get companies customer orientated? Unilever were already there in 1964. It was just A to Z company focus throughout the company from the chairman down. And when you talk about company focus, every customer focus, everybody has to talk about it. Basically it's got to be a ritual in the company. And Unilever had that. Secondly, they were extremely decentralized. Now you can only decentralize in business if you have mutual trust and mutual respect. Because can you imagine an um, entrepreneur building up a business and he's a bit of a lone wolf, let's say a command and control person. And now he's forced to decentralize, but he hasn't developed his people. There's no mutual trust, mutual respect. How can you delegate so just on

Speaker B: the word decentralization, can you define what you mean? Do you mean it in terms of decentralizing, uh, functions and business units? Is it decentralizing authority and leadership? Is it both?

Speaker A: All of that starts with decentralization of authority. That's the trigger. So you create a structure which is decentralized. Like in Unilever, you went from the chairman and the board to senior management, which I, uh, was part of at a very young age, at the age of 28. And a senior manager in my field would have been the group marketing manager. The marketing manager had a number of brand managers under them and the brand managers were all product orientated. So toiletries, detergents, etcetera, Food, etcetera. So it was very, very decentralized. So what I also learned at Unilever, uh, was that their selection process for brand managers was incredible. And that has stayed with me. It's unusual for a big company where they uh, actually look into the integrity, quality, style of the manager. Because when you have a, uh, global giant like Unilever, which has now elevated the status of brand managers, therefore customers, you've got to have top people. So their selection process had to be really good. So the result is that all of the conflicts that we had at Unilever were functional conflicts. I cannot remember one dysfunctional conflict in 10 years, basically. So it was a hard working company, customer driven, decentralized, huge confidence in young people. I mean, at the age of 23, 24, we were doing presentations on product strategies to the board of directors. You don't get that even today in some big companies you don't even get. So I think that Unilever was way advanced.

Speaker B: Look, I think there's so much that we want to get into now. But there's one thing that uh, you brought up here when talking about brand managers, um, and specifically about how the structure works, is that they were taking care of different products, verticals. Um, I think it can be quite challenging for someone to become quite obsessed about the product and lose their obsession with the customer. Right. And they build based on what they want, what they think. And I mean, was that a risk ever at Unilever?

Speaker A: You said was never a risk at Unilever and I'll explain why. And it's my suggestion on how what companies should be doing. Unilever used to have almost on a daily basis, either focus groups with customers or research in the marketplace into customer needs, basically. So they were totally, totally tuned in to who their customers were, what their needs were, what market segments they went for. For example, in toilet soaps they went from Dove and Lux, which were the luxury brands, and Dough down, um, into Sunlight, which was for the mass market, different market segments. So, uh, I mean, m. Unilever were just totally customer focused. So all of the research that came out of that drove product development. So when you get this clash in some companies between product and customer, there was no conflict at Unilever because the customers drove the product. It is just as simple as that. And they had all the processes, all the management processes and systems in place to be able to do that and react quickly. And they didn't make many mistakes. I mean, if you take for example, one of the biggest extreme opposites that I've read about to that, this was Nike in 1985. Basically, um, sorry, Coca Cola, the board of Coca Cola and the top management of Coca Cola made a decision to change the flavor. They never went to the lower levels of the company and they certainly didn't go to the customers. So now suddenly, with one of the oldest brands in the world, where everybody loved the current flavor, I go to a new one. So obviously that didn't work. Pepsi gained huge market share and they changed basically back again and called it Coke Classic, basically so that that could never happen in Unilever. Now, I'm not coming down hard on, uh, Coke because it's a brilliant company. In fact, a university friend of mine who had a flat right next to me became the global CEO of Coca Cola. So I know the story quite well. Just to summarize on product and customers, if you take Cisco, for example, in its heyday, when John Chambers, the CEO, uh, made through strategy, Cisco became the biggest company in the world, basically. And anything you read about John Chambers, it's all about customers. He never made a decision in Cisco. And these were corporate customers. Not exclusively, but in the main, corporate customers always referred it to his customers. If it was. If his management team came up with something. And this is what I recommend to all companies, came up with something new, do something. First question was, how's that going to benefit our customers? And if there was no good explanation, they didn't do it.

Speaker B: Yeah, I mean, that's one of the biggest lessons I've learned from you since working with you is that it's entirely the framing of. For my simplicity around strategy is that you're fundamentally building this around the customer. Your likelihood of success is just going to be a lot higher.

Speaker A: Absolutely.

Speaker B: And that's kind of the simplicity of it. Okay, but before I get super excited about talking about strategy and what I think, uh, I want to talk about the next step in the journey. Right. What was the first foray into entrepreneurship? Like, why did you leave Unilever, an amazing company that you clearly still have an attachment to today? Uh, what was that? First opportunity, that next step.

Speaker A: Um, there's a similarity between what my thinking was when I left university and I'm not trying to put myself in the same league as these people, but like of Jeff Bezos and Bill Gates, they had visions. In the case of Bezos, it was the Internet. He just saw that there were 2,400 times increase transactions and he said, this has got to create online opportunities. Bill Gates saw the forthcoming miniaturization of microchips and he knew this was going to end up in miniaturizing the market and decentralizing the market. Basically my dream and my studies told me when I was at University from 60 to 64 and after that and I continued my studies, I believed absolutely that it which very few people thought about and when they did think about it was not in good terms because I hadn't had very good experiences with it, that this was going to become the biggest industry in the world. That is what I believed. I believed in decentralization as well. So when you looked at the South African market, for example, at that time, less than 1% of the market was owned by local South African companies. It was all IBM and what they call the bunch Burroughs, Univac control data, uh, etc. And they controlled the market, but they were predominantly in mainframe computers, the big bangers. So it was obvious to me what was going to happen in the future. And this was going to give birth to networking and that sort of thing as well. So when you have that kind of a vision and a passion and everything, you read about it and every time you think about it, you get more and more excited about it. You have to convert that vision into a strategy. Basically that was the reason why I left Unilever. Now many people ask me, why did you leave Unilever? You were the youngest senior manager in the world. You are on the international list, only South African on the list. Which meant that I would be CEO or chairman of a Unilever company by the age of 40. Why did you leave? The reason why I left is why entrepreneurs do what they do. It's because I had a dream, I had a vision about what the future is going to look like and I wanted to participate in it. And I also inside me, wanted to do more entrepreneurial things. Now, that's not to say Unilever was not entrepreneurial. It was more entrepreneurial than any big company I've ever seen. Since then, I've never seen a company more entrepreneurial than Unilever, basically. So I just think it was a Great experience that set me up for life. I was very lucky. I was fortunate, and I loved it.

Speaker B: Okay, so before we get into bec, I think just what stood out for me is even the way that you describe vision there. It wasn't, uh, the way that you even frame that. And it's again, the same framing that I think about when it comes to any business is like, let's look at the market and the customer and then look at what value we provide to them. When it came to vision, you saw, this is where the world's going anyway. This is what's going to happen. This is the. This is where I see the future being. And then the vision came as like, now, how can I create a business that will then be involved in this future instead of thinking about what will my business be and not taking into consideration the landscape and the trends and what's going to be happening in the future anyway?

Speaker A: Yeah, that's that. In my opinion, that's a very good way to look at vision. Vision is actually driven in the first instance by the market and by what's happening with customers. So, for example, Bezos saw growth of the Internet. Bill Gates saw the need for operating systems, for smaller computers. In fact, his vision was a computer on every desk. I mean, everybody would have. In fact, they did laugh 1959. 19. So 1980, when he first did that. Uh, but that's where it comes. And then it gets translated from there into a business, not the other way around. Uh, commonly what I see, entrepreneurs go about it the wrong way. They go for a search to find something that they can convert into a purpose. Wow, that's an endless search. So it's much better if, as a human being, you've absorbed all of the gazillion messages and things which are going on in the world, and you form your own generalized view of something that has got high appeal, and then you've got to commit yourself to it and you've got to be passionate about it. So I was extremely passionate about it.

Speaker B: I feel like I've teased this enough. Uh, the first. The first. The moment you left Unilever, what did you leave to and why?

Speaker A: Um, I wanted to get into South Africa, into it, and then international after that. So trying to figure out how you do that when. When less than 1% of companies, of South African companies are involved in. It was a difficult thing to do.

Speaker B: Yeah. Sounds like you're swimming upstream.

Speaker A: I was swimming upstream, definitely. So I developed a very complex strategy. The strategy was to resign from Unilever and Go into an office products company. Now, uh, an office products company. It's actually quite closely related to the IT market because the customers are very similar basically. And what I wanted to do was to get experience with an office products company, then buy an office products company and then convert it into um, a computer company because the customers were similar. So I started in Rhodesia with Business Equipment Corporation, where uh, a deal was offered to me that I would participate in the shareholding basically. And I said, I said to the owners, which was a public company, I will do it for three years. I will do it on condition that I get a good shareholding and that we enter the South African market. Those were basically my conditions. In other words, this was not an end destination. This was purely an entry point to get into South Africa, into office products, then convert into. And those pivots were some of the most complicated things I've ever done in life. And perhaps we can share a few of them.

Speaker B: Yeah, we're definitely going to get into some of those. I just also love the fact that you mentioned you had a very complex strategy. Um, but I love the clarity and simplicity in how you explained it is that the execution of it is extremely complex. But the, but the simplicity of what is it that you want to achieve? You just is like there's three steps, right? And that's it. Which I love. Um, and that just reinforces the clarity that you are able to bring with your strategic thinking. But I also want to go a little bit deeper into BEC right now because this was when uh, you were in an environment in Unilever where you're with like minded, like valued people, right, where integrity and character was just the norm. And that was never necessarily something that was tested. It was more something that was leveraged now on bec, your entire value system and integrity got tested right out the gate. Yes, talk to me about that.

Speaker A: You're right. Absolutely. From the start. So at bec, having accepted the position of CEO, uh, three of the directors of BEC that I knew I'd known for some time, but I've never known their character, just known them from a friendship point of view, etcetera, invited me out to lunch a couple of weeks before I joined. They never mentioned, they never spoke about the new CEO. They spoke generally. And then they came to the main subject that obviously they were interested in, that they had made a lot of personal money which they'd stashed away in Switzerland by over invoicing products from Japan and Europe for bec and they kept the difference overseas Now, I don't think anybody listening to this commentary would have any doubts that, ah, that is fruit. Basically this was a shock to me, huge shock. I never encountered anything like it. So the first thing that I thought about was, Is this something I can live with. I looked at it from every direction. There is no way I could live with it. Because if you knowingly go continue to work with and employ people who are dishonest, that's a black mark against you. And you will see that this whole principle revisited me a couple of times in business. Fortunately, not a lot, but it was never pleasant having to deal with it. So what to do with these guys? Eventually I decided the company couldn't live with it. I wasn't going to talk to the holding company because I didn't want them to persuade me to keep them, basically. So the first day that I came into the position, I called all three of them in, I spoke to them, I treated them with dignity. I didn't shout at them, but I revisited what happened at the lunch. And I just said, guys, I can't live with this. Can you please give me your resignations today? So all three of them resigned. The sales director, who I won't mention his name, took out all the salespeople that afternoon. And this became my second challenge. So I get calls, no salesman around. So I said to my secretary, a lady by the name of Linda Wellington, terrific person. I said, linda, please tell all the salesmen to be at my office at 8 o' clock tomorrow morning and ask Richard Burnett, who is the technical director, to come to my house tonight with a list of all the field engineers. So Richard came to the house, I explained the situation to him and I said, look, I'm going to dismiss all of these salespeople because we cannot work with people who, uh, have been involved in adventures which demonstrate a lack of integrity. But I will give an opportunity to those who want to reform to stay in the company on a case by case basis. So when Richard came to the house that night, I'll never forget it, he had 26 field engineers. So I got a blank piece of paper, drew a line down the middle and I said, right, give me 10 people and you keep the balance of the people. Basically, those 10 people are going to be salespeople tomorrow and they'll report directly to me. So we did that. He said, what about these other guys? I said, the other guys, uh, have, uh, got it absolutely made. They're not going to get an increase. I'm not going to employ anybody else. They're just going to have to work twice as hard. Basically. If they want to help us with this, overcome this problem, they've got to become part of the solution. And that's an important thing, an important principle is to make people part of a solution rather than part of the problem. So often in business I've seen problems come up and people get blamed for it. That's all counterproductive. You know, you've either got to resolve it quickly or you've got to find another way of doing it basically. So the next day I spoke to the salespeople and the majority of them left. And then I coached the salespeople that I had from field engineering, took them under my wing and we boxed on the company. Converted. Why? The public company had wanted me to run the company because they were making losses turned like that into profits. So I think that if somebody said to me, what's the case for integrity? I would say right there because now you've got the bad dogs out, now you focus on the right issues, gives you an opportunity. You're not going to get any negatives or anything like that. And it worked fantastic. But I had um, a problem at the end because the chairman of a public company, right from the start knew that my objective was to get to South Africa. And I'd been to South Africa on a number of occasions to look at companies. And I found a company by the name of Mercedes Office Machines, the medium sized office products company. See that typewriter there at the back? That's the first Mercedes typewriter brought into South Africa. It was made in East Germany and it was the best typewriter in the world. That's why they called the company Mercedes. The two brothers who formed it, the

Speaker B: Flugner brothers, just for the record, nothing to do with Mercedes Benz had uh,

Speaker A: nothing to do with Mercedes Benz. So uh, with the full knowledge of the chairman, I negotiated a deal in South Africa to buy Mercedes. And a time to do it flew down yet again. Got an agreement drawn up by a South African lawyer to be signed in the next two days. I phoned the chairman, secretary said what flight's he coming down to sign the agreement tomorrow? She said are you in Johannesburg? I said yes. He said he's got no plans coming to Johannesburg. So I thought wow. So I phoned him that night and I said, sid, what's the issue? He said I'm sorry, I changed my mind. And uh, this wasn't pre planned, this was just a reaction from me. I said okay, in that case then will you please accept My resignation on this call. He said what are you going to do? I said I'm going to go and negotiate to buy the company myself. He said, but all your money is in Rhodesia, which it was. And the Reserve bank never allowed any money to leave Rhodesia. How are you going to do it? I said, I found a way.

Speaker B: You don't have a cent to your name and you're going to go buy a company, a medium sized company for

Speaker A: 400,000 rand in 1974 when 400,000 was worth a lot of um, basically. So anyway what I did, I went into Memory bank and in my Unilever days when I was in Durban, I'd been managing a number of companies for Unilever, one of which was Melrose Foods Cheese Company and Reuben Siv was the founder and Unilever bought 51%. Reuben still had 49%. And I worked very closely with Reuben, did a five year plan for him. I even invented a new cheese for him which had never been done anywhere in the world and it became a uh, bestseller.

Speaker B: Many things that have never been done in the world before in your stories

Speaker A: for one reason or another. We had a great relationship. He liked me, I liked him. So I explained the situation to him and I said I need 400,000. He said you're the only person in the world I'll lend the money to but I'm going to make it expensive. I said fine. So I took the money. I went into the meeting the next day with the uh, owners of Mercedes. I explained to them what had happened and I said I'd like to do the deal myself. I said fine. So we went ahead and did the deal basically. So that was how I got into Mercedes Office machines in South Africa. Now their product line was typewriters, manuals and electrics copiers adding machines from a company in Switzerland called Walther who made the ppk, uh handgun that James Bond used. Uh, and the idea was particularly on the copier and typewriter side where their clients were the big banks and big companies was to use those connections to get into it basically. So that's the reason why I started that way. I also did what I recommended to everybody which I think is amongst the best advice I can give anybody on anything in your business. Decide on what the key positions are then make sure you've got an A player in all of key positions. So in business I've ah, categorized A, B and C. A uh, is the top 10% of performers in the industry. Then you go B and C. So you've Got to have A players in the key positions. If you don't expect a lot of problems, expect that you're going to be spending more time solving problems than looking to the future of the company. That's how important people are, uh, basically. And then you need to have a program in the company which is not difficult to do to encourage your A players to become A, to become your B player, to encourage your B players to become A players. That requires self introspection. You've got to be able to look at yourself in order to improve. So for example, my personal philosophy on life, whenever anything has happened to me, like for example the ones I've mentioned and many others which I will mention in the future as well, I look at those issues, not like that, with a finger pointing out. I uh, look at it with all five pointing at myself. So for example, I came across a fraud case many years later where I acted decisively on it. Now in that case, I asked myself what did I do to create that situation? The fact that I was dealing with people who were acting on the other side of the law and there was fraud involved, what is the point of castigating them? It's not going to solve anything. So I had to ask myself, what did I do? And what I did, I made the choice of going into business with those guys, talking about another company later. So it's critically important to be able to self actualize yourself. Otherwise you'll never learn, you'll never resolve your problems. And I think if you do that, nobody needs to give you a lecture. You will find every day of your life there are areas that you can improve. You're not going to be able to predict them in advance, but because that is your attitude and your value system, that is what is going to give you this incremental improvement.

Speaker B: 100%. Uh, I, uh, think it was. I don't know if this was Jocko Willink or Stephen Covey, but there's a, uh, quote that I really like is uh, I think, yeah, Stephen Covey, even even though it's not your fault, it's still your responsibility. And in the situations there that you're describing is like, even though it's not your fault that the fraud is happening, so your responsibility to deal with this because you made a decision to work with them. Um, okay, I just want to take a step back and like unpack the story so far because for the record, spoiler alert to the audience. Everything that we're discussing and the principles here are actually all part of Nick's Strategy, methodology. So we'll talk about that later. But we've been quite clear on vision. We've explained how, uh, integrity values is such a core component of leadership. You've now brought in the concept of structure, uh, briefly, but particularly the most important thing is a players. If you have the right leadership, uh, with the right market, the right vision and a players, it's most of the job.

Speaker A: 1.

Speaker B: I'm still thinking about the story of just how different this is contextually from BEC basically geographically expanding into South Africa but also acquiring another company. And what that would mean strategically. Strategically. And that's the context of like, okay, and now you would be running, you know, two, two geographies, two separate companies to. Now you've got no other company, no other capabilities, no other structure to rely on. And it's, it's fully you and this new company.

Speaker A: You know, it didn't happen like at cam. I actually burnt bridges. And if you want to make it in life, you're going to reach a point where you're going to have to burn a bridge. So, uh, for example, when I came down to South Africa, I resigned from BEC on that phone call. So I was not managing BEC anymore.

Speaker B: Yeah, no, no notice period. No, uh, notice period.

Speaker A: No notice period. And to make it work, that's a burnt bridge. I'd made a lot of money in Rhodesia. I was not able to take a cent out. And to this day I've never seen the money because the Reserve bank didn't allow money to come out of Zimbabwe. M. So that was lost forever. So my wife Carol and I came down to South Africa. She was pregnant and we had no money.

Speaker B: And now you're 400,000 rand in debt.

Speaker A: And now I'm 400,000 in debt.

Speaker B: Fantastic start to the entrepreneurial journey, Nick. Okay, and now just, um, talk me through like the first. I was going to say months. I'm actually curious about days. Like, well, the first couple days of like mit. And it's like, uh, you've got, you've got the backing and one of your, uh, again, one of your principles that you've mentioned. And you'll obviously say this better than I will, but I think it's like if you've got the right conviction, the finance will come. Right? There's always, there's always money there that can be found. If you've got the right conviction. Getting the finance actually isn't that difficult. Um, so you managed to secure that. How did you start? What did you do? How did you start, like Just learning and taking over and changing. Like how did you almost onboard yourself to your company?

Speaker A: So let's go through the basics. So now I've come down to South Africa with nothing.

Speaker B: But I've got you less than nothing. You've got, you're in the negative, but

Speaker A: I've got a company. Yeah. So during my Unilever days when I was marketing manager, one of my brand managers came down, um, after I left, came down to join Gillette, basically. So I called him Bill and he lived in Springs and we had a very close relationship. So I asked him whether I could stay with him. I was happy to pay him and everything, he said fine. So I started in Springs, which is quite far out of Johannesburg, and Mercedes was in Dornfontein, which was quite a seamy little area. So that was where I started. So I came in from there every day and uh, I started working on Mercedes firstly to fine tune what they had. It was a good company and they had a sales manager, sales director who's a shareholder who stayed on Walter Myers, Swiss, probably the best salesman I've ever seen in my life basically. So that was great. He was an A player. So then this is a new company to me. You've got to start from scratch, you've got to investigate it. You've also got to be humble and not go into the company as a. Know all of everything because you don't, you know, ah, a lot of people try and do this. They think that their previous experience entitles them to give opinions on a situation. But unless you're very familiar with that situation, and it's one of the big lessons I would pass on to everybody in, in life, a lot of people shoot from the hip. Don't shoot from the hip. Take time, do your homework. Basically, which is what I did at Mercedes, we put a strategy in place, uh, firstly to get the people right. I brought down from Rhodesia a few of my top, uh, people who are a players into the situation. So we got the people side right, right from the beginning. You don't want to have to develop a new strategy and then you have problems with people after that. It's just not the way it's going to be good for you. So then I developed the strategy and uh, I'll just give you an example of one of the pivots. I've no longer bought the company. Then IBM and a company called Lenire in Atlanta bring out the world's first word processors. Now the world's first word processors were an electric typewriter converted into a digital system, basically, almost a mini computer, basically. So I had to call in the guys from the typewriter side and tell them, gentlemen, this market is going to disappear. I want to talk to you up front so that you know it's going to happen and that you will be looked after. But I've got to convert into word processes and have a separate division to run that, otherwise there's going to be a conflict between the two. So I took one of my top guys, put him in charge, went to the States, negotiated with Lenire with their word processor. They were already heading to number one in the world. We brought in the linear word processor and it became number one in South Africa above IBM even. So that was a very, very big success from the start. So that gave me quite a lot of confidence that this pivoting is going to work if you do it, if you do it properly, because there are lots of pivots to work. I mean, if we come to the end of the story, 20 years later, I, uh, sold a business from a start from scratch, virtually. We employed over two and a half thousand IT people. We had companies covering every sector of the IT market from the mainframe side where I, uh, bought unisys, through the networking, through software and services, through all of it, basically. And all of those were not straightforward. They were all pivots and substantial pivots. Um, so for example, when we went into minicomputers, I acquired a company

Speaker B: and

Speaker A: uh, they had a British minicomputer, which didn't frighten me. I knew it wasn't going to work out, but I went to look at the customer base and I spoke to all the customers. Six very, very unhappy customers. So the guy who'd sold the company had, ah, withheld information. Who was responsible, me or him? I was, I didn't do my homework. I should have done that before I bought the company. The fact that he didn't tell me, that's his issue. Can't change it. But I could change what I did, basically.

Speaker B: Another principle I love from you, um, it was a, I think an American president that you put on this. Trust but verify.

Speaker A: Yes, that's Ronald Reagan, Reagan's famous saying. And I use it a lot in business. Trust but verify. There's no situation I can think of in business that you should operate on 100% trust. And if somebody takes offense, then you mustn't do business with that person. But if you and I do business, I must verify. I trust, but I must verify.

Speaker B: Basically 100% sure. Okay, so Nick Covered a lot there. We jumped from, you know, starting off with mit, um, just the. I want to unpack the word pivot. What does that mean to you?

Speaker A: Pivot means a lot of different things to different people in the context. You've got to contextualize what a pivot means. So if you're talking about electric typewriters into word processors, it means the pivot is you've got to find a word processor the best you can. You've got to form a separate division, you've got to put a players into it. You've got to optimize your situation with typewriters, make sure the cash flows are right, because you know that business is going to disappear. And eventually it did disappear. And then we were strong in word processes, but that's how you pivot. But that wasn't the end of the story. We reached number one in South Africa and along comes Bill Gates. And I read up on Bill Gates and he's now talking about the microchip and micro computers.

Speaker B: Sorry, I just, I love that in the story. And it's like, who's this guy Bill, right? That's, that's coming, uh, like coming with this business, Microsoft. And like, should I take this seriously?

Speaker A: Anyway, I call in all the word processor guys and I go through the same ritual with them. This business is going to disappear, and it's going to disappear faster than the electric typewriters business disappeared.

Speaker B: I just again, what. To zoom out a little bit is the one thing I know about entrepreneurs. We get very attached to our businesses and especially attached to our successes and what's become successful. And I think your, your ability to maintain the best way I can describe it is no ego in relation to just the reality of the world. Right? It's like, I can't change reality and where markets are moving. And so the point is, it's that, uh, for a lot of people, they will kick and scream and fight tooth and nail to try and make that kind of core business unit work. Like typewriters. How can I pivot that into another market or another customer base? So they like, still use this, but it's still the same product for you. You were just like, this is going to be completely disrupted. But instead of tanking anything, let's just put in like some serious cost controls. Let's lower down our focus on growth and innovation here. Let's stabilize, let's harvest what we have, right? And then from there, let's, uh, focus our attention onto what will be a new business unit that really becomes essentially A replacement of this. But it's got a different supply chain, it's a different product, it requires a different sale, it requires a different education. But instead of like scrapping the one for the other, you almost just looked, uh, um, metaphorically. I'm just thinking about waves in an ocean is the fact that it's like you're still moving forward, but you're allowing the change to happen.

Speaker A: You see in business, the reality is every CEO is different basically. Now, if you go to the one extreme, I've dealt with CEOs where money and finance is their number one, which has never been for me. Firstly, I'm not that kind of person. But I learned in Unilever that finance, bottom line is an outcome. But I've met people, particularly in MIT and particularly in one of the companies where the CEO, uh, was totally orientated to money, but not money for the company, money for himself basically. He ended up making a lot of money, but the shareholders lost gazillions in the process. So, you know, the fact that he might have been subsequently been successful again after that doesn't cut any ice with me. Basically because I look back at the situation, how much did he make, how much did the shareholders make? And it's not a contest now, you know, once that happens, should be win, win. Yeah, you got to walk away from that kind of situation. I find that contextualizing everything is the starting point. A lot of people put too much pressure on their intuition. They want the intuition to work immediately, they want to make decisions immediately, but they don't fully understand the context. That's the formula for potential failure. The other side of the coin is I've met people in business who've got phenomenal, phenomenal intuition, basically. But let's look at Elon Musk and Jeff Bezos. There are two people where I think everybody will agree they, uh, have got very, very advanced intuition. I'll tell you the reason. It's very simple. It's the same for both of them. They both studied extremely complex degrees, physics and stuff like that. High level of complexity. They are, ah, avid readers. They're both reading five books at a time. Basically they study the environment, they study the context. So everybody thinks Elon Musk is just a genius. Well, he might be a genius, but he does his homework basically and he works very hard. So I would say if you want a formula for success, number one, be able to contextualize, be able to learn, be able to work out different options and be passionate about it. If you come to a conclusion on Something, Commit yourself to it. Be prepared to work hard. I mean, these sound like boring issues, but that's what Musk and Bezos do.

Speaker B: They're the fundamentals.

Speaker A: Yeah.

Speaker B: Um, and on the topic of contextualizing, uh, you really helped contextualize. When I look around and see these walls of books around me that I know you've read all of them. Um, or at least I'd assume 90% of them. Uh, but just on the top, on the point of contextualize, you need to know how to contextualize. That's a skill to develop. I think, even for me, I want to wrap my head around that. I mean, the way that I think about it when. When you mention that is I need to ask more questions. I need to understand the situation before I make any judgment calls or any answers or. Or have basically make any decisions. Right. I need to feel like I understand before I do something. Is that what you're mentioning? Or, uh, is there something more to it? Like, how would someone know that they need to. You need to understand the context they're in.

Speaker A: Now, understanding the context is hard work, but my advice is avoid bureaucratizing the process. You don't want to do something purely on intuition. So let me give you an example. With word processors, in that particular situation, in that context, you have to understand the size of the electric and manual typewriter market. You've got to understand the shareholding of each. You've got to have analyzed your competitors as to where their pluses and minuses are. You've got to understand who is likely to get into word processing. We knew IBM, for example, and we knew several others. Then you've got to do your homework on the technology, and you've got to get into pricing models, uh, gross margins. You've got to do a whole strategy, a contextualization of the process before you make a decision. There will be many people who will act purely out of intuition. They may see what I see, which is that this market is going to be overtaken by another market and they might come to a conclusion. We've got to get into that. Let's go and find the best boom they're in. Uh, I think that There are some CEOs who can make that work, but there are not many of them. Basically, you know, the CEOs that I've seen who operate purely on intuition are putting themselves under huge pressure. Because if our starting point is that every person has got unlimited intuition, the question becomes, how do I grow my intuition so I can make better decisions? Better problem Solving and that type of thing. And we've dealt with a lot of, uh, a lot of the issues here this morning. It's not going to happen in two. But there is a temptation when people have successful, they get too gung ho on the intuition. They think, uh, let me give you an example because it's an example everybody knows about in South Africa. Woolworths, brilliant operation in South Africa. Uh, profitable, fantastic public company. Best food. Quality of food has not even been matched by checkers in South Africa. They now want to get into Australia. Geographic expansion. They buy David Jones over 20 billion. I think they've lost just about all of that. And the reason is very simple. Never assume because I'm successful in this venture, I've learned business, I've got the A to Z, I can now do anything. All you've done is you've been successful here. Now you want to get there. You've got to get the context of that. What Woolworths, ah, should have done. What does the Australian market consist of? What are the consumers there? How do the consumers compare with here? Uh, how different is David Jones from Woolworth? Is it realistic for David Jones to be converted? And a whole lot of other questions as well. But they made an assumption that they were good enough to make it work. And they're not the only ones. This happens in America as well. It happens all the way around the world. If you take a company like AT&T. Wow. AT&T were in telecommunications. They were one of the original Bell companies. They were one of the baby Bells. They became the biggest, most dominant. They decided to get into computing. I mean, thinking was similar to what I had. Uh, they wanted to pivot into. So what they did is they decided to do it themselves.

Speaker B: Yeah, because surely computing is not that different from telecommunications.

Speaker A: Well, that's what they thought and that was their downfall. It's totally different. It's totally different. It's a related market, but it's totally different. So anyway, needless to say, that failed then. So they lost X billion, then they bought ncr. They didn't understand the mainframe market because at that stage it was already clear that the mainframe had no future. So now they go and buy ncr, which is not even number one, two or three in the world. Basically, that failed again. So, uh, a lot of people, a lot of companies, big companies, don't do their homework and contextualize things and put proper strategies in. So I would say a big danger for entrepreneurs to avoid is to give yourself too much credit for how much you know, if you've got the ability to learn, that's more important than what you know. Because if you think what you know is the beginning and end of the story, you're going to fail because you're not going to grow. But if you. I consider myself an eternal student. I'm still learning every day of, um, my life more and more and more and more. And I would recommend that to any entrepreneur, any CEO.

Speaker B: I think the main theme from what you're talking about that's standing out to me is the hubris of success. That I think is just like, no one is immune to this. I think that's the nature of being human. And whether it's, you know, Woolworths as a listed company. And one of my favorite examples is actually when we look at, um, exited entrepreneurs and they've sold the business and get into angel investing and they end up losing a hell of a lot of money. And it's because that point of, um, and I love your framing, is it's actually this overestimation on our intuition and a lack of acknowledgement of, like, specific knowledge within a context. Um, and if that, if that awareness was there, that knowledge is attainable, but we can make better decisions. Um, so I just wanted to summarize that point. Now, moving into the question, can I

Speaker A: just make one comment on that?

Speaker B: Of course. I knew you were going to crossing it.

Speaker A: I think a very good bit of advice for business people, for kids, for anybody in life, is you don't know what you know until you know what you don't know. There are people out there and there are, uh, CEOs, who think they know a lot more than what they actually know. And it's very dangerous. Going to get you into a lot of trouble. And it's not necessary. More important, you're missing out on a lot of fun because the fun is applying yourself and learning all about something. So you come across a particular situation, what do you not know about it is probably more important than what you know about it.

Speaker B: And the starting point is simply just asking yourself that question.

Speaker A: Absolutely. And then following it through with lots of other questions.

Speaker B: Yeah, we can. This is also the whole Socratic theme, uh, and philosophy behind what it is that you've built.

Speaker A: Questions are key questions.

Speaker B: Everything. Uh, okay, so, Nick, I want to. I just want to go back to the story just to paint the picture of a few of these, um. Epic is the appropriate word, but epic moments. Um, we've got into a bit of the MIT journey. You've spoken about the Pivoting into word processes. You've spoken about minicomputers. We know about Microsoft coming, but there's a couple steps in that journey. One um, thing we haven't spoken about is the fact that you have a piece of technology sitting in the Smithsonian. Um, please give the story as to how that happened.

Speaker A: It's a very interesting story. It was again another pivot in the initial stages and I'm talking late 70s. I uh, brought on board, I think three of the best software programmers in South Africa. And we designed protocol converters which is what Cisco do before Cisco did it. We designed quite advanced servers, but we designed the first South African developed ATM which had a full screen, spoke uh, nine different languages. Basically. Uh, we did very well with it. We called the operating system hamos after Ian Hamilton, who was one of my software people who wrote the operating system. And it was great. We sold it to the banks, did very well. We had no big problems with it. So that in itself was a terrific success. However, coming back to Bill Gates, the microchip was about to be launched basically. And as soon as I delved into it, and this is what I've been saying about knowing what you don't know, I asked myself the question and researched. How is this going to affect my businesses? The conclusion that I came to is that this is going to obsolete our uh, operating system because the microchip is going to become the operating system in the desktop computers and in everything ATMs, everything is going to be driven by that. And um, proprietary operating systems are not going to survive. So I called in the guys and we spoke about it in detail very openly and very frankly. This business is going to disappear. But there was a solution to it. I said to them, let's think very carefully and discuss all of the capabilities that we have in designing technology products and ATMs, etc. And let's find other applications that we can use for the same technology. And I put a team together under an individual by the name of Bertru. And uh, Bert had been with me for some time and he was a real, a player. So Bert and I communicated a lot on it. And he said, you know, one of the things that we should look at is converting our uh, technology into a payment system. He said, if you look at the payment of rural pensioners, there are 18 million in South Africa.

Speaker B: Fintech before Fintech became a thing, yeah.

Speaker A: He said, do you know how it works? I said no. So he said well they come with these, with these trucks full of cash. But the poor People don't know what day, uh, they're coming. Could be any one of three or four days. So they generally have to wait there, which is shocking. And then you can't really develop cottage industries because you don't know when they're going to come. And the whole thing is just an inconvenience. So let's try and apply our, uh, technology on ATMs to paying rural pensioners cash by ATM in a predictable way. In other words, what's our vision? Let's give them something which is predictable. This is the most important thing in their lives, which is the money they get going to make it easy for them. How can they get it easily? How can they get it right? The right amount, and all of these other industries can develop.

Speaker B: So I just want to pause there, because even the way that you describe that is the fact that, like, your vision had nothing to do with the product. Vision was about the fact about who's the person. Not even a customer yet. Who is the person? What is it that they need, and what is the experience? What is the customer experience that I think they need for their life to be better? And then we build for that.

Speaker A: So the ultimate customer was the rural pensioner. The intermediate customer was the government bodies that were responsible for that, basically. So we, uh, we started in Kwamashu, in Kwazulu, one place. We bought a Nissan truck. We actually didn't. We got Nissan to help us with it. And we put in four deboed ATMs in the truck facing outwards. And we developed the world's first biometric thumbprint recognition device.

Speaker B: Modern ATMs.

Speaker A: The first biometric had never been done before.

Speaker B: Okay, but did they exist anywhere else or was it specifically for. So there was never a biometric thumbprint scanner ever in existence before?

Speaker A: Not to our knowledge. It could have been.

Speaker B: Well, I don't think it would be in the Smithsonian if it did exist before that.

Speaker A: So anyway, we did that and we tested it in Kwamashu and it worked perfectly. We told them when we were going to come, when the trucks were going to come. They were all there, flawless, basically. Thumbprint machines worked. Then we went national with it. And the, uh, company was called, we called smartech. Smartech. The sequel to the story is that we became. We were the only ones in the market doing it. So we dominated the whole market, basically. And the government agreed that this was a much better basis of paying rural pensioners cash than what they were doing. So we did the right contracts with them. They, they went out to tenders but in the beginning there was nobody tendering against us. So we got all the business and it was extremely profitable, extremely successful. It was a model case. The customers were happy, the intermediate customers were happy. Our people felt really bucked with themselves that they had been part of this transition process. Everybody, everybody was uh, comfortable. Then uh, uh, I brought in fnb as a 50% shareholder because you had to have a bank with you. When I sold out in 93, 94, the whole company, uh, we sold our 50% share to FNB. Basically FNB owned 100%. They subsequently, it was such a great business they got an offer from someone else basically and it's still going today.

Speaker B: Nick.

Speaker A: Unbelievable.

Speaker B: Uh, um, one thing that stood out in what you were talking about now is that and that click for me is there's a certain philosophy of don't get too precious about your product because at some point or another it's going to change, it's going to get disrupted, it's going to become totally irrelevant, the market's going to move on. And I think people uh, like and there's almost this and the reason why I say this is like I'm formulating my thoughts as I'm talking but a lot of especially early on, early uh, stage entrepreneurs will look at their product as the thing and it's like this and it must work, et cetera. And it's like if you zoom out a bit over five to 10 years the market's likely going to get disrupted. Specifically with the rate of change always increasing now with AI and the point is just actually just get out there, build a business, build some momentum and like if you know that your product eventually is not probably not going to exist or at least in the form that it is now, you can actually get a little bit less attached and probably make better decisions. Um, and I think that seems like something that was kind of core to your philosophy throughout is that you like you're not overly attached to the products because customers number one.

Speaker A: Yeah. Let me ask you a question. If we had not done that in with SmartTech, where would we be with our own um, device with our uh, own operating system?

Speaker B: Oh no way.

Speaker A: We've been out of business. Yeah, basically. Let me share two, two stories only because they're very, very well known stories just in case some people think that their product line is here until eternity or they uh, or they're not going to get disrupted or something like that. Basically let's talk about Blockbuster and then let's talk about Nokia. Blockbuster was started in America by a friend of mine, a Ypo, Wayne Huisinger. And the idea of Blockbuster was to give people the ability to hire VCRs and things like that for movies basically. So you went to Blockbuster, you hired it and took it home for a day or two and then took it back to them. Basically they had a person working for them by the name of Reid Hoffman.

Speaker B: I didn't know Reid was at uh, I say this like I know him on a first name basis. I didn't know Reid Hoffman was at Blockbuster.

Speaker A: Reid Hoffman, one of the most famous people in the world and a great, certainly one of the greatest entrepreneur. Have a look at Netflix. Reid is behind Netflix. He was the brains behind Netflix. Anyway, he saw what I saw with it. He saw that streaming was going to become a reality very soon. So he went to the top management in Blockbuster and said, we've either got to convert, we've got to pivot into streaming or we've got to have a streaming division. Basically I said we're not changing, we're doing fantastic, we're making a lot of money. Along came Netflix. Reid left, started Netflix. Where are they today? Don't even exist.

Speaker B: Yeah. Also again it shows the combination of contextual understanding combined with vision.

Speaker A: Then you, then you look at Nokia. Now uh, unlike Bill Gates, Nokia didn't start in mobile phones. They started as a pulp mill in the 1800s basically. So they've done quite a few pivots themselves which is why I'm always shocked about the story because why didn't they see this coming? So uh, according to the top management of ah, Nokia, in 2005 they got all the information they needed that Apple were going to launch the iPhone in 2007. It was two years before they did absolutely nothing about it. Didn't take any retaliatory action or anything like that. You've never seen a company move from number one to Z so quick as Nokia basically and they ended up selling their phone business to Microsoft basically. There are plenty of these stories and I encourage, although I'm not a big fan of strategy books because I think that they are over complicated, too linear. Uh, don't encourage creativity. I would encourage people to read them for the anecdotes are brilliant, read them for the anecdotes. You'll find lots of stories like this. It's good to be alert to your market, always in touch with a customer because then you're not going to get many shocks, you're not going to get many surprises.

Speaker B: Yeah, spot on. One other thing I want to mention here is that Nick, what kind of caught this theme as well is that any innovation that you had, any new business idea, any new business venture was all structured within the same holding company. So you weren't a modernized serial entrepreneur that would either exit one or become a director on this and then start another company. Uh, you decided to put this all as a group of companies and I actually don't know enough to have an opinion on this in terms of what's better or what's worse. Uh, but I'm sure you do. So what are your thoughts on that in terms of having multiple different businesses versus having them within the same?

Speaker A: You know, again, I think it's horses for courses and I think it's context and it's doing homework on the context. Okay, uh, in this, in my particular case, coming into it, I'm um, up against competitors. And what are the characteristics of these competitors? They've all got strong brand image, strong brands. IBM, uh, Burrows, etc. All got strong brands. They are all perhaps unkindly, I'm going to say command and control structures, very bureaucratic basically and in a lot of the cases, maybe most of the cases, pretty distant from their customers. And I'll tell you a story about Unisys after we, after we bought Unisys, so I decided that the correct corporate strategy for mit, and this was right after I'd completed my contextual analysis, is to have multiple brand individual companies, to have a value system that everybody in the mi, everybody in the MIT group embraced and to have cultures which are different in each of the operating. Now I'm going to tell a little story about one of the banks. I'd rather not mention who the banks were. But this particular bank bought the best wealth management company in South Africa. Great. Had its uh, own brand, fantastic people, highly successful, bought them. First thing. First mistake they did, they put it in their banking division. Second mistake they did, they ah, changed the brand name brand to the bank's brand. Third thing, they changed the incentive schemes. Now I believe we've got to be very careful not to play with people's money.

Speaker B: You change the fundamental nature of the business.

Speaker A: You know, if you, if you play with people's money, you're heading for big, big trouble. They should have gone the opposite way, but they didn't. You know, they cut back on the incentive scheme. So the result is, uh, it failed and it created opportunities. And I, uh, was able, for example to take advantage of that situation and bring a number of the people into a wealth management company that I was associated with and is extremely successful. So the answer to the question is it's horses for courses. That was what I did in it. In other circumstances. I don't know if there's a right or wrong. I think it's related to the context.

Speaker B: Got you. Okay, so there's a couple more topics I want to get into because before we talk about strategy. Right. And quite simply that is, uh, the fact that one of your subsidiaries listed on the jse, not your holding company. The first one, the acquisition of, the partial acquisition of Dimension Data and then the acquisition of UniSystems. Where do you want to start?

Speaker A: Okay. Firstly we had five public companies under, under uh, the, the holding company was always private and I was in partnership with a very big industrial company basically. And there were five companies, five public companies under that. I acquired a 26% initially shareholding and Dimension Data. The agreement took quite a long time to negotiate because they were very hung up on control. The head of the CEO of Dimension Data hung up on control and I said, look, I can't do the deal unless we have the ability to get control at some point. I don't care when it is in the future. But we've got to have a clause which deals with the change in control. You've asked me to provide funds, which we will do and uh, to help on your acquisitions, which we will do. But that's got to be there. So that was agreed that that would happen. So uh, I put my financial director on the board of Dimension Data and we did all of the Dimension Data deals with them via this guy who was in there. And we provided huge amount of funds. Whenever they needed funds, we provided, increased our shareholding. We eventually got to the sort of late 40s in shareholding. We're on the verge of taking control. And I said to my financial director, I don't want to have control of this company. So we, we didn't advance it any further. Basically, however, I had recommended a couple of years earlier I'd said to my partners that I'm going to leave in two years time. And the reason for that is what I've done at mit, I want to help other companies do is to develop growth, basically. And I said, I think that the right CEO, uh, will be the CEO of Dimension Data, which they accepted. At that stage there were already signs that personal agendas were superseding the interests of shareholders and maybe even customers indications. So I was a little bit nervous. I'll, uh, come back to the Unisys situation. Let me finish with Dimension Data. Uh, so when I sold, they asked me to stay on the board mit, which I did do. And then the CEO, uh, of die Data, uh, changed the script totally. I'm, um, not contesting whether or not he was entitled to do it, just stating a fact. He changed it. What did he change it? To? Eliminate mit. Sell off all the companies that he considered to be hardware companies like Unisys, etc. Keep the software and services companies. So I attended a board meeting when a new appointee of the industrial company that I was partners with, who was certainly not up to speed and not a match for the CEO of Dimension Data, Uh, he was talked into selling those assets from MIT to Dimension Data. Uh, the very first one that came along was a software company. And at the board the price of 15 million was put on the table. I said, that's ridiculous. I personally put 30 million up for it. So I think that they took significant advantage of my former partners, basically. Anyway, they did what they did. I went on record at the board meeting as saying, I know exactly what you guys are going to do. You're going to try and list this company overseas. You're going to take investment analysts, put them in a plane, go and show them eds, which is the best outsourcing company in the world. Go and show them Computer Associates, one of the best there. Dell, one of the best. Emc, which is large scale. You want to take in two Dimension Data. Uh, it's going to fail. Why is it going to fail? It's going to fail because I don't think the motives are right. There's no strategy behind this. You guys are hardware people. You're not software and services people. You don't understand. In other words, what, um, I'm, what am I saying to them? I'm saying to them, you don't understand the context. You've made no effort to understand the context listed in London.

Speaker B: Sorry. But before, before we go there, it's still the same point of intuition. It's still like, I see an intuition. I see where the market's going. I see that software is going to be increasing in demand. I see there's an opportunity for us to list the company. To your point, there's a personal motivation there, but there's still the, the argument a CEO can push back is I can see the, the way that the market's moving. Nick, just like you did in those early days.

Speaker A: He didn't do his homework.

Speaker B: Right. And, but that's, and that's the point that you're making is that's the point. The fact that it's like if, if you're not, if you don't do your

Speaker A: homework, you don't do your homework, you're dead in the water.

Speaker B: At best, you're gambling whatever you try.

Speaker A: If you don't do your homework, you did in the war anyway. The homework was not done there. They listed in London, the share price went from the equivalent of 2 rand to 78 rand.

Speaker B: Sounds like it's working.

Speaker A: The directors made an uh, absolute fortune before predictably, it crashed. Came down to R2 rand. Shareholders lost billions. Management made billions. Now I want to ask you what's wrong with that equation? I think that's the ultimate test. Never mind that the next lot of shareholders made some money and that the company recovered. The shareholders who lost the billions lost the billions permanently, basically. And then, you know, there were other issues which came up as well. Let me maybe move on to Unisys. Part of my vision was for MIT to cover the full spectrum. And the spectrum started with mainframe computers. Obviously you couldn't buy IBM, so number two was Unisys. I already had a taste of Unisyste because five years before that the software guys that I brought across were from Unisys. Some of the salespeople, few of them were from Unisys. Unisys had fantastic people, really, really good people. And uh, we put our hat in the ring. Because of the apartheid, all of the American companies were disinvesting. We put our hat in the ring. Unisys appointed a bank. I'm not going to mention the bank doesn't exist anymore to represent them. Unfortunately, that bank did the wrong thing and was, if I can just put it mildly, unduly influenced by, by one of the, uh, bidders which if you're the bank that's orchestrating this, you should never be in that conflicting situation. I found out about it, went to the States, discussed it with Unisys and I said to them, I'd like to make a shutout bid. They said, what's a shutout bid? I'd like to go to London, make an offer equivalent to the best offer that you've got. I said, fine, we're happy with that because according to the London people, they prefer your people to any of the other bidders. So I said, okay, you're not going to be disadvantaged. We'll pay top dollar. I, uh, called gentleman by the name of ATI Du Plessis who was with, on our board and he was a representative of my partner, one of the finest Men I've ever met in my life. Integrity, top drawer, smart phoned ati and I said, look, I explained the situation to him, said can you meet me in London? He said, fine, he'll jump on a plane. So we met there. The next day I phoned Michael Katz, who's one of the top lawyers in South Africa. He did most of our deals. Michael flew to London. The shutout deal took 20 minutes. Basically they accepted. And then I saw something cam I've never seen since in my life, the most amazing thing. Michael Katz drew up sales agreement and a shareholders agreement in London using the Unisys secretaries out of his own head. Had nothing to refer it to. He was cross referencing the whole time, complicated agreements, he drew them. So we signed while we were in London and the deal was done basically. Then, uh, when we got back to South Africa, I'd really done some homework which told me that Unisys, like all of the big computer companies, I don't want to single out Unisys. We're not very customer orientated. IBM certainly at that time were not customer orientated. Lou Gerstner came across later, many years later, CEO of IBM changed back to customer, uh, culture. So the error that Unisys did people behave as they are rewarded. The rewards for selling mainframes were very short term, 12 months. However, it normally took three to five years to negotiate sale of a mainframe. Once the mainframe was in, it's going to be in for five to 15 years. How can you do it on one year? Clearly they're gonna favor the short term. So we changed that. We went away for three days after we acquired Unisys. I was very, very impressed with their people and we just spoke values for three days, nothing else. Just to make sure we're all on the same wavelength, we discussed them every which way. At the end of those three days, the biggest message that I think all the Unisys people got was the Unilever message. Customers, basically. And it became fantastic, basically. And the company operated very, very well.

Speaker B: Two questions. First one, can you just give the audience context of how big Unisys was compared to mit?

Speaker A: MIT at the time that I sold, I think was the only, uh, IT company that consistently produced an increase in profits for 15 years. So we reached quite a nice point. I can't remember uh, precisely how many people we employed at that stage, but we were already fairly substantial. We had already listed, we were a listed company on the stock exchange, I would guess three or four times bigger than our group. It was a SARDINE swallowing a whale, basically.

Speaker B: Two follow up questions. Uh, besides what you mentioned, strategically, um, how did you finance that, uh, when it's three to four times the size and value of your company? Um, and why take on such significant risk to do so?

Speaker A: All right, how we financed, I went to my partners. Part of the initial agreement from 1992 was that all acquisitions up to 100 million I, uh, would fund and the shareholding would remain the same. Anything over 100 million they would fund and would change the shareholding. Unisys was 400 million at a time when the Rand was equal to the dollar virtually, basically. And so, uh, they funded that and the shareholding changed. I lost control. They had control of the company. Which explains to you why they, why they were. Why they went the road. They did, let's put it politely, with Dimension Data.

Speaker B: Very interesting. Nick.

Speaker A: Um, sorry, there was another part to the question as well. Oh.

Speaker B: Uh, and why did you take the risk on. Sorry, just not even that. It's like, like why. Actually that's a. You gave more context there. It's like not only taking on the risk, you're just choosing to lose control.

Speaker A: Yes.

Speaker B: In exchange for this as well.

Speaker A: Yes.

Speaker B: That's a huge decision.

Speaker A: It's not a huge decision. You know, I've never been hung up on control. In fact, many of the subsidiaries we had a minority share. Dimension Data, we had a minority share. Many companies we had minority shares. Our approach was if I like company A, uh, and I don't want to buy control of it initially because I'm not a multinational, I don't have endless resources, so I don't want to buy control of it. If I have a smaller share, I can get to know them over a period of time. And once you've got control, if you've got the right shareholder agreement, which entitles you to fund their growth and also to eventually acquire the company, you're going to get it anyway, basically. So m. We had lots of minority shareholding, some of which we converted to majorities, some of which we didn't basically.

Speaker B: And, and so that, that speaks to the, the shareholding. I still want to know. Uh, I still think this is a huge decision. Obviously citing it in the whale changing decision. It's a big decision.

Speaker A: I don't want to minimize. I don't want to minimize the decision. What I'm saying is if you allow personal issues to intervene in a transaction, in other words, how much am I going to get out of it, uh, and start dealing with issues like that, you're dead in the water. You can't do that. You've got to look at the situation isolated from your personal interests. There are some people who can do that, some who can't.

Speaker B: And the simple answer is basically that this is in the best interest of this organization, that this deal happens.

Speaker A: I should remind everybody, Companies act states that the first part of a fiduciary duty is you have to at all times act in the best interests of the company. How can you act in the best interests of a company if your agenda is a personal one? And I've come across that, I've mentioned them this morning.

Speaker B: I love the simplicity of that answer. Because it's because the. I can't believe I'm actually about to state this, but because it should never be this question. But the so what of integrity? Like, like, so what in terms of business, why is integrity important? Uh, links it especially to the companies. Like there is. It's like, because if you have integrity, then behaving to your fiduciary duty as a director in the benefit of the organization is just you behaving with integrity now.

Speaker A: Yeah.

Speaker B: And then by behaving with integrity, you're going to make decisions that are sustainable, that are in the best interest of the company. And same thing for, uh, with profit and with financial metrics being the lagging indicators. Same thing as the CEO. Uh, you're the person that gets paid last. Right. Um, but if you're behaving with integrity, you might just be a little bit patient, but you're still going to, you're still going to do very well at the end of the day. So, Nick, I think we've spoken to some of the biggest stories in your context. Uh, the only thing that I really want to know next is obviously you exited mit.

Speaker A: Yes.

Speaker B: Um. Uh, what I want to understand, what the audience to understand is kind of why. Because the success is just compounding at this stage. Things are, um, you're on quite an exponential curve of growth. Um, but you decided to exit the business, uh, especially at its peak. Um, and unless that's a strategic decision to have gotten out. And I know it's not. Um, but yeah. Why did you exit the business?

Speaker A: I did that. Um, and I had told my partners long before that I was going to exit. The reason is, in my MIT experience, Uh, I had applied strategy virtually from the Unilever playbook, basically. And I found that size of company is important, scale is important, people are important. You know, it's one thing managing strategy when everybody has integrity. And I'm not Suggesting there are situations where none of them will have integrity. But I'm just saying in the real world out there, this is one of the issues that you have to deal with. So I had found that what I had really enjoyed at MIT was helping the CEOs of our companies, watching them being successful and meeting their own goals, basically. Uh, I'd also parallel with that many, many situations because of my personal contacts and because of ypo, where people either wanted me to mentor them or companies, often very big companies, wanted me to assist them. For example, the Plate Glass Group, Solar Glass, Ronnie and Bertie Lubner. I worked with them very, very extensively. So in those days I wouldn't call what I did consulting, I would call it advising. And with one exception, I never asked for a payment for it. And that exception was in Brazil where there was a major company that I was asked to sort out their strategic, uh, problems. And you know, I got paid for that. So I found that I really enjoyed this interface with new people, new CEOs, new markets, and that type of thing was very appealing to me because I think, because I'm an eternal student, I'd advance my intuition. I'd supercharged my intuition fairly significantly and I was in a position to be able to do that. I think one of the success stories, for example, would be Anchor, where I became involved with them very shortly after they, shortly after they listed. And I really enjoyed the involvement there. And they've been a super successful company and they are a great group of people. They have a lot of a players, they have good strategies, they know what, they know what they're doing. So those were the reasons. And I also wanted to, because I'd been on the international board, global board of ypo. I, uh, wanted to experience business in America as well. So that was, those were the reasons you asked the question. This was not a slam dunk for me. I went through all of those issues at the time. Is this the right time to do it? We're coming up to a peak. This is the best the company has ever been, basically. And rightly or wrongly, I just made a decision at that point of time. If you're going to do it, there's no right time. Basically, just do it. So that was basically what happened. I, uh, I advised them well in advance. I stayed on the board for a very short period of time and then left. And I mean, in that period of time there were a number of things which I was very proud of. I mean, for example, if you take Dell, Dell Computers in 1988, I started the first black owned computer company. I think it might have been the only black owned company in the country at the time with a, uh, gentleman by the name of Alan Roper. And it was extremely successful. In addition to that, at that time I was invited by Mandela's doctor who was also involved in business. They wanted to fund, they needed funds because they wanted to buy one of the momentum companies and form a bank. And I provided the funding for that. And that was what the African merchant bank. That was the origin of African merchant bank. So Dikhal Musinecki, who's a, uh, deputy judge president, because he was involved in that, often refers to me as the father of be basically I don't think I was because I think there were a lot of other people who were involved in it. But you, uh, know, I enjoyed that experience with them.

Speaker B: Sure. So it sounds like there was a compelling next chapter and it was a new chapter that was, stems more from variety, from learning, um, as well as kind of contribution. It's uh, I think it's what I imagine what was going through you is I've made it right and I've done the peak that I possibly can in my career. Now it's for me to follow my interests. Um, and on the topic of interest, obviously strategy is one of them. What was the moment where you decided to change from being a student of strategy? And I know you'd argue you still are. Right. But when you change from being a student to the belief that there's a lack in the world that you wanted to solve for and specifically on how people think about strategy and how people craft, execute. Yeah, talk to me about that moment.

Speaker A: It happened very, very shortly after I left Unilever, because in MIT and in bec, they were much smaller companies. Some of them were near the startup stage. Strategy works differently now. Uh, Unilever had a formula for Unilever that was the Unilever strategy. There are commonalities with that in terms of principles with every strategy model. However, I battled a little bit in the beginning with the strategy for these companies. So I decided, I'm going to read strategy books, I'm going to go to Harvard. So I went to Harvard many, many times, met all of the top people, including Michael Porter, and read strategy books. And every time I tried to distill what I had learned and applied it to the companies and it did not work very successfully. I couldn't work this out for a long time. I mean eventually I was just doing my own thing in strategy and applying, you know, Massaging the Unilever model to fit the circumstances that I'd found myself in. Uh, so it was, it was a trial and error approach. But I was, I must say I was a little bit disappointed in that. I expected much more. I found that strategy books are pretty boring. If you're going to read a strategy book, good luck to you. I found that they linear have uh, a beginning and an end. There are some models out there which have got tables and schedules and that type of thing. I'm not a great believer in that because I think it stifles creativity. I'm a believer having a methodology which you like, understanding it fully and then letting your creative juices take over. I don't want to be told I have to fill in schedules, I want to ask questions and I want to leave it to the CEO and management to have a stimulating discussion on it. That's much more productive. So um, that was the evolution over many, many years to developing the strategy. The strategy model. The strategy model has got significant elements of Unilever, some elements from Harvard, some elements from books I've read and a lot of my own um, personal experience and experimenting with strategy and in companies I've worked with, it's one work pretty well basically. So I can say that and I will never be critical of consultants. The principle I believe in strongest is that the CEO and uh, management of a company should, must own their own um, strategy. You can't put this in the hands of a McKinsey or some external company because they're not, not because they're bad companies, they're all great companies, but they're not involved in the company. They don't understand the context basically. So I think that when a management team and a CEO, uh, have got to that point where they choose a methodology like the all in strategy, for example, and they take the time and trouble to go through the principles and follow the strategies and that type of thing that is going to supercharge the intuition basically. And what does that mean for consultants? That means when they invite consultants in, they're operating at a much higher level. They're using them much better basically. So I'm certainly not anti consultants, but I am very pro CEO and management team owning their own strategy.

Speaker B: Fully agree with you, uh, the word strategy, uh, even when we first met, one thing I struggled with is everyone's got their own definition of what this even means, I guess in plain English. What is the definition of strategy to you?

Speaker A: So strategy is the range of choices that you make when you want to Change a current situation into something else in the future. But you've got to have a methodology to be able to do that. So strategy takes place at different levels in a company. If you start at the top, you've got corporate strategy, then you've got business unit strategy, then you've got function strategy, marketing, sales, that type of thing. So the most important important strategy, all of the strategies are important, but the most important one is the business unit strategy. Now uh, how do you do a strategy for a business unit? Basically there are four themes that you have to pay attention to. Where are you going to compete? What is the market segment? How are you going to compete? What are the benefits that you want to give your customers? What are the experiences you want to give your customers the customer experience and what is your growth strategy? These are the four themes which I would say is the apex strategy of the company. Now if you have three business units, you've got to have three different strategies. Common mistake. Some CEOs very successful in business unit number one. They kind of roll over into two and three. They don't do their homework. Just like Woolworths in Australia. Basically you have to. I'm busy doing that with a company at the moment where they've got a brilliant unit number one, but they've not paid attention to the other business units and they could find themselves in a situation at some point where that's going to cost them the entire business. So they're retracking and they're now doing proper strategies for all the business units. Why is that important? Because when you cascade that to the corporate level, one of the important roles of a CEO is which businesses should we be in, which one should we exit. So the CEO and uh, the management team have to have a methodology also to assess the quality of the business units. There are plenty of these around. There's the bcg, uh, matrix and soft matrix. There's no shortage of tools out there basically. So you've got to be able to look at each business unit differently. And then at the top, at the business, at the company, uh, level it's what should we be in, what should we be out of? What are the key positions? Who is going to run this business unit? Who's going to run that business business? These choices are very material and they uh, and they uh, are going to have a very big impact on the future of a business. Basically. Then you have to cascade the business unit Strategies, Business Unit 1, down to Product level. Marketing, research and development people. You've got to cascade it into all of the functions and into the operations as well. So a, uh, strategy in my book is not a strategy unless you've gone through that whole process. You've got to be aligned top to bottom. It's a very simple process. And strategy itself is simple basically, but involves a hell of a lot of work if you can imagine a line. So at the top you've got the company strategy, then you've got the business unit strategy, function strategy, etc. I mean most companies are not aligned. I find that absolutely amazing. So now the corporate level, these are the directions we want to go. But some of these units are doing different things. That's just counterproductive. You have to be aligned, but in a very creative way, which means that as many people as possible in the company must be involved in designing the strategies and implementing the strategies simultaneously. We're talking about the four themes. You've got to be able to talk about the aspirational vision of the company. What are we actually trying to do? Generally the vision, which is the case with Bezos and uh, Bill Gates, their visions were in place before their strategy, but sometimes it's the other way around. But it doesn't matter. Vision and goals have to be integrated into that process. So you want to find out your current strategy for the short and medium term, your long term vision for where the business is going. The goals. Why do we need the goals? That's where the cascading process comes in. Let's talk for a minute about revenue, which is the easiest of the goals. But it's exactly the same process with people. So with revenue, let's assume a company, a, ah, large, large, ish company, medium sized company has got the CEO and the top management team have set a revenue target of a billion dollars for next year. And let's assume there are five business units. The business leaders of those business units have to do their homework on what their revenues are going to be. And then either that's going to add up to a billion or it's not going to add up to a billion. If it doesn't add up to a billion, you've either got to modify the billion or you've got to modify what these guys do. Not uh, complicated stuff basically. And then once you've got it at the business unit level, what do you do? And anchor do this better than anybody I've come across. You've got to cascade that down to the individual level, to the salespeople. So you've got to have a method of monitoring and holding them accountable for Specific performance criteria. So the revenues of the individuals who make up the business units must total the business units. You go through the same process on the way. Now, if you do that for your people as well, and you have to do it for at least four or five different dimensions, just mentioned revenue as one of those, then you're going to have an aligned strategy. So there is no shortcut to it. It's very simple. If somebody bear in mind every company has a strategy. Now, I've tested this. Several companies have come to me and they've said, we don't have a strategy. So I said, okay, let me prove to you in five, ten minutes that you have a strategy. And I'll ask you four questions. Who are your customers? Which market segments see you in? Have they got an answer for that? You bet they know. They tell you, how do you make yourself different? Uh, why do they buy from you and not anybody else? They've got the answer to that. What customer experience do you want them to have? You've got to define that. They all know that growth strategy, they all know might not be a perfect growth strategy, but they know they're either growing organically or they've done geographic expansion or the various types of. Various types of growth strategies. So at the end of that five to ten minute process, I say, okay, can you now repeat your answers to me in a story? Just make up a nice little story. Five minutes. So tuck, tuck, tuck, tuck, tuck on those things. That's your strategy. They say, well, is it as simple as that? I say, it's as simple as that. But then you've got to cascade it upwards into the vision. Is your vision still relevant? Because in the case of Blockbuster, for example, they should have changed their vision to go into streaming. They didn't, basically. And you've got to set your goals. So we are talking about the key elements of the all in strategy process. The total all in strategy process. What I've mentioned to you, the four questions, the four themes, plus vision and goals, or what I term, um, crafting strategy. There are only three stages to strategy. Some people, like McKinsey, have seven. But my three contain all of the elements that all of the others have. It's just three. Crafting strategy, which we've just dealt, uh, with, is one of them calibrating your resources. In other words, ask yourself a very simple question. We've now set a strategy or refined a strategy or whatever it is. What are the best resources that you can lay your hands on internally and externally, which you can calibrate together to give you the best chance of success. So, for example, how much finance are you going to need? There's no point in having a strategy if you can't finance it geographically. Are we going into Australia? Are we going to stay here? Are we going to go into Cape Town or wherever it is? You've got to determine all of those things. Then you've got to, then you've got to calibrate, which, as I've said, means how am I going to do something much, much better than my competitors? I'll give you an example of it. Anchor, uh, have by far the best culture in financial services. They're a wealth management company. Now, uh, how do you compete with that? You see what they've done. They've made culture into a valuable part of their calibration process and it's given them an additional capability which other banks can't champion. Everybody wants to work for Anchor because it's not just because they pay well, but because they've got so many a players. They perform. I mean, they've gone from zero in 12 years to about 500 billion rand in assets under management. They've gone from four people to 500 people, basically. And it's a tribute to their CEO, uh, Peter Armitage, and their management team that they've been able to do that. So with strategy, you've got to be able to calibrate. And I've just given you the example of one, one resource which, which Anchor used. And they've got many others as well. I mean, ideally you want to have lots of, of reasons why, uh, people buy things from you. And then the third element is executing strategy that starts with the business plan. So now you take input from 1 and 2. From crafting resources, calibrating resources, you go into the business plan. Business plan is very simple. Four parts. How do I create value for my customers? You've done most of that exercise. How do I create value for the company? You've done very little of that exercise. That's where the hard work is. How am I going to monetize all of this? Basically, what resources do I need and what systems do I need? And that's the business plan. The business plan is the document which should drive the budget. A majority of companies don't do that. They simply do a budget. As an extrapolation of last year, there's a fundamental flaw in that. The flaw is this. If you're doing that, you're assuming next year is going to be the same as last year. It never has been so you've got it, you've got a deal, you've got to deal in future. So you'll budget is a, uh, response to the business plan is a response to crafting strategy, calibrating and the first step in executing strategy. So now you've got a plan, you've got a business plan, you've got a budget that you finalized, then you've got to do an execution plan and then you've got a review basically. So it's those three steps. So it sounds overly simple, but if you compare it to other methodologies on the market, it's got the best of what everybody is saying. And it's got over 50 years of my experience practical as an operating CEO, uh, having dealt with many companies here and in the States on the methodologies and helped many people basically.

Speaker B: So to your point, it does sound very simple and simple enough to understand and grasp. But I imagine someone listening to this in the audience like I know my context, I know my customers, I know my products, I know my direction. Why do I still struggle with this?

Speaker A: You struggle with it for any one of a number of reasons. First reason could be golden rule. In a contest, the short term always wins over the long term. Most CEOs and their management team are involved 95% in operations. So a lot of them will say, I haven't got time for strategy. A lot of them will get involved in strategy, but they'll get detracted by problem areas that have occurred. So that's one reason. The second is, is an unrealistic belief by, uh, the CEO and the management team that their intuition is going to be able to resolve everything in the future. But the bad news for them, good news for the people who are interested in doing it, is that everything complexifies. So as you scale up, the business becomes much more complex. What does that mean? You need more intuition. Not the same intuition, you need different intuition. So you've got to supercharge your intuition. You've got to put yourself. Do you think it's a. It happened accidentally that Elon Musk became such a brilliant entrepreneur? This is probably the hardest working guy who ever lived. He did complicated degrees, he does his reading, he does his homework. So SpaceX didn't just happen, Tesla didn't just happen, basically. And it's exactly the same with Bezos. I mean they are very, very hard workers and they work through all of the, all of the issues. So yes, strategy is simple. When you break it down into the small points like we have in the all in strategy and Then knit them all together basically, because that leads to the next issue. Where do you start with strategy? I recommend that all companies should do something that I call an annual health check, which means that about a month before year end you get together and you go through the AI, the all in strategy process, total strategy process, crafting strategy, calibrate execution, down to budget, you go through all of that. So uh, that's the starting point. And if you want to bring in consultants, you can bring in consultants at that stage. But make sure that you're managing the consultants, that the consultants are not managing you. Basically that's very, very important. So it is relatively easy, it's hard work, it takes quite a lot of study. We have made a decision some time ago that ultimately strategy is going to be all be online, website, AI driven. Uh, our strategy process is already online and already you can, you can look at, look it up on your cell phone. It's already digital. Basically we've still got to do the AI, uh part. We've been messing around with it, we've thrown some money away, but we're still learning. But there's a huge role for AI to play in the field of strategy and that's where the market is going to go.

Speaker B: One thing that caught my ear uh, whilst you were talking is that uh, especially, especially entrepreneurs, owner operators, they love being involved, right? And it's where the risk is of control, but it's also what they enjoy, right? It's like they love being at the coal face. And I think the point of this is not a question of whether or not that should still happen. One thing I've also learned from you is I've always believed structure follows strategy, even your methodology. It is. But there's also the question here is like, are you structured for strategy?

Speaker A: Correct.

Speaker B: And what I mean by this is that uh, if only 95% of your time is being spent problem solving in the weeds on the short term, you haven't structured your business enough for strategy. You haven't structured your time enough for strategy. And so what, uh, what I'm interpreting from what you're saying is one of the biggest changes a lot of CEOs, a lot of entrepreneurs need to make is that they need to reprioritize their time and they need to recalibrate their resource and their structure in order to free themselves up, uh, to do the work and effort to craft strategy properly. Because there's no silver bullet, there's no way to cut through this. There's no quick fix, there's no Shortcut. Right. Um, and yes, obviously intuition is there, but are you going to supercharge this? And specifically, if you're going to be going through change and complex change, you want to make sure that you've got the time available to think this stuff through. And the only way through that is it's going to require effort. And yeah, that's, that's what stood out for me, is that you need to rethink your resources and your time to make sure you can do so.

Speaker A: Warren Buffett has said often that if your strategy is flawed, the clock is ticking, you might spend 95% on operations. That little 5% is what will kill you. You have to get your strategy right. And when I talk strategy, I'm talking about all three. I'm talking about crafting strategy, calibrating and executing, basically. And we have, uh, a basis, it's one of our diagrams, that you can test your own organization, how strong you are in the three. And if there are weaknesses, you need to attend to them because otherwise the short term is really going to win over the long term and you're going to develop problems. So, uh, as I say, it's not that they're not doing strategy and it's not that CEOs are not spending time on. They're just doing it all by intuition, which could be right. Maybe it's not. Basically, especially as you complexify, it's more and more difficult to do. And that's the reason why we've met so many entrepreneurs. Hugely successful, sell hugely successful sellers, hugely successful, fail hugely successful. It's because they don't know how to grow a business. They know how to launch a startup, but they have very little idea on how to grow it.

Speaker B: And so, uh, is that what you're suggesting is the right timing for an entrepreneur to start thinking about taking strategy quite seriously is when you kind of get to this point where intuition, self awareness, call it what you like, but you're in a moment where there's a level of complexity here where I need to level up if I'm going to manage this. And I think a lot of people can sit there because now I don't know what I don't know. And as what you're saying, the first place to start is now, you need to learn about total strategy to begin with.

Speaker A: I think it's a marriage of a lot of things. I think, for example, CEOs, as a former CEO myself, CEOs have to be involved in operations, operations where I've seen CEOs distant from the Operations. I, uh, dealt with Anglo American. I'm not going to mention his name, particular individual who was appointed CEO of Anglo American, absolute disaster. Wasn't involved at all. It became a bureaucracy almost overnight, basically. And you mentioned the relationship between structure and strategy. And sometimes companies are not structured to do the strategy. I'll give you an example. It's an extreme example, but it'll help the thinking. So if you've got a company which is a command and control company, I was asked to assist one of those and I turned it down because the CEO is a command and control person. It's extremely difficult to implement an agile, uh, workable strategy if you've got a command and control, because you've got to involve everybody for all of the reasons that we've mentioned. So in that case you definitely need to restructure. And in the, in the company that I was talking about, it was sold, it was bought by a private equity company and they've changed the strategy and they brought in a players. So it just really emphasized what I've been saying. So CEOs cannot afford to not think about strategy.

Speaker B: Couldn't agree more. Uh, for all the CEOs that are watching and listening to this right now, uh, you mentioned the annual health check, right? Can you give me a bit of a simplified version of this and some key steps in the process, key questions that they can ask themselves as their team.

Speaker A: You know where your year end is? Let's say your year end is 31st of December. My suggestion is you pick. It's actually you've got the Christmas period. You'd have to go to halfway through November basically for the first step. And what you do with the annual health check is you do a SWOT analysis. Step number one, to look at strengths and weaknesses of a company, you examine the strategy, basically you lead that into your business plan, into the budget and you get all of these approved, preferably by the CEO and where necessary by the board of directors. So you do that over a month. Some companies might want to take more, some take less.

Speaker B: Most people do it over a day, maybe two.

Speaker A: But those are the essential steps.

Speaker B: So, okay, that was the essential steps I'm looking for maybe like version two out of three in there. What are some of the, the questions one should ask themselves, uh, in the process? So we mentioned there like, uh, doing a SWOT and then evaluating the strategy. Talk to me about the evaluating the strategy piece.

Speaker A: How would we think about this evaluating the strategy? If you're working with the all in strategy with our approach and you want to establish whether you've got a strong strategy or not. We've got a table there which you would discuss with your management team. The questions are very, very simple, dealing with strategy calibration and execution basically. And you want to work out how strong are you? 0 to 10 in those three areas. Then you want to take your strategy and you want to put it under the microscope and satisfy yourself particularly that there are no substitute products out there which are going to obsolete. You like the Apple, Nokia story, uh, what are the. And that comes through in the SWOT analysis anyway. But you want to do your strengths and weaknesses. But as far as your own strategy is concerned, it's very important for you to take a reading on how, how good you and your management team feel your strategy is. And if you want to make changes, bank them at that stage.

Speaker B: Okay. I like the simplicity of that because before we're going into the detail, it's like, let's actually take a proper review how good our strategy is as a team.

Speaker A: Now, where we differentiate cam ourselves from other companies, that's going to be my next question.

Speaker B: Like why, why should we use.

Speaker A: We don't legislate, uh, how much time they've got to spend. Is it a month, six weeks, or whatever it is. We don't legislate who has to be involved, who are the managers who have to be involved. We don't legislate that basically, or how much time they're going to spend or in what order. As long as they do it, they've got to do what's comfortable for them.

Speaker B: Okay, so that's the differentiation of the fact that we're not legislative, we're not bureaucratic. Right. We don't talk about this, um, is what you should do, this is how it is that you should do it. Um, why should someone consider checking out AIs all in strategy instead of any of the other methodologies out there that are particularly popular?

Speaker A: I think they should, they should check them all. They should check them all. We believe AIs is the best out there and our customers, uh, say the same thing as well. But uh, I'm very happy for it to be put to the test. Whoever your favorite strategy is or if you want to look it up on online or anything like it, compare AIs to what you've got. I think that's the answer that I would give to that. I believe that we have something which is simple but it takes time. You've got to get into it and then apply it. It's not difficult.

Speaker B: Um, so for the audience quickly. If you want to find out about AIs, there's a banner below that's going to show you the URL that you can go to. They're also going to provide a link in the description below. You can see more about this for yourself. I'm just reeling and slightly speechless now, which I'm not used to doing at the end of a podcast. But I think it's just because we've been through so much, we've been through such a story and it's a perfect way to end off by asking, what are the next steps? Where is AIs going? Actually a better one. Where do you see the market go?

Speaker A: Yeah. Uh, our goal for the all in strategy is a continuously adjusted and amended model, which is why we're going on the web while we've done website as opposed to a book, because we're already into our uh, first major revision. So we're in August 2025, I would say by mid September we'll have the second version on the website basically, and that will be followed in due course with others. We're talking about a moving target here. Our goal is to give customers the best experience on strategy, the simplest and best and most practical and especially cost effective. Now, if we take costs for a moment, if you went to a top management consulting company and you asked them to come and do six hours of work for you, how much would you pay them per hour? Uh, it's probably going to be somewhere between 5 and 10,000. And there are many management consultants that will charge you 50,000 or $100,000 for a day. Basically. We are nowhere near that. Um, and I'm not saying it's a good or a bad thing, but I'm saying for small and medium sized companies it's critical. Basically costs are very. So they're getting the best for less.

Speaker B: 100%. Uh, Nick, what is the one question that I haven't asked you that I should have asked you, that you'd like to answer now?

Speaker A: How am I feeling today?

Speaker B: Yeah.

Speaker A: Ah.

Speaker B: How are you feeling today?

Speaker A: Good. Every day is a good day.

Speaker B: Nick, thank you for being on the finder files. Uh, it's been an absolute joy and privilege to spend more time with you. Go in depth. Thank you for sharing this with our audience. I'm sure they're going to love this, this, um, excited to keep working the journey with you.

Speaker A: Great, thank you, Ken.