TFHZPC meets the Dragon

In his 3^rd installment of his famous trilogy, Michael Porter gave the world “The Competitive Advantage of Nations”. As I sat down in a hotel in Yantai China, I could not help but reflect on how a communist nation had been able to manage its billion plus population by steer it into a value creating machine. Strategy is not exclusively synonymous with democracy. Far from it. Any firm or country needs strategy in ensuring effective management of the entity. It enhances the quality of the decisions its leaders make by facilitating coordination in their actions and places focus on long term goals.

In Zambia, we have noted that the tri-elements of strategy are never quite known by entrepreneurs. The force is strong in these three elements therefore the must be balance in the force. Failure to have equilibrium leads to certain peril. Strategy is not the margins you make nor is it the number of customers you have in a moment. We have seen through the numerous blogs we have posted here that failure to identify the internal and external forces on a business can lead to the evaporation of customers and margins.

We are not advocating for a fixed framework when it comes to strategy. The academics merely provide us to anecdotes that can allows us to create a sustainable value creating story for the firms we create. Strategy therefore must be viewed as a means of provide a decision support system for your firm. It must be the sole tool of coordination of your firm as you navigate the muddy waters. Strategy is what provides you with a clear target for that bow and arrow you wield when you set aim and fire.

Oblivious to many Zambian business owners is where to find this strategic intent. You have been carrying it with you if you are an entrepreneur. Neglected by many is the values of the founders of the business. You may be a sole trader or corporation of mates, you have to have some sort of values that defines your drive to be in business. Once you have identified these values, you echo or exhale them into your followers (the ones you chose to be responsible over, the ones you pay a ZMW to on a monthly).  Many have told us that it sometimes feels like the dream of the owner only permeates in their minds and the people they employ don’t “share the dream”.

Failure to share the dream is what often leads to doom. This is what we have observed from our time in the Shangdon province. You see the dragon has been able to effectively communicate its vision of how China is supposed to be. They did not find themselves as a superpower by accident. Far from it, in addition to investing in resources and capabilities, they were able share the dream with a billion plus (we pass no judgment on method). We have observed through factory visits at how effective the Ford inspired assembly line has been modernized to become their most ruthless competitive weapon. 

This has yielded mass production in proportions that emerging countries can only admire. The pessimists will argue that they have the numbers. TFHZPC has a different argument. Numbers mean nothing if you do not have a strategy.