In the next 10 years, any company in existence today that has not expanded their customer base past the borders of its present country will go out of business or become a fraction of its current size.
Last year I told my teenage daughter about a Penpal I had when I was a teen who was in Australia and how we used to write to each other and I eagerly looked forward to receiving his letters every two months, because it took about 3 weeks for my letters to get to him and three weeks for his letters to get back to me. She gave me a blank stare and asked “Dad, why didn’t you just send an email?”
Three decades ago, a single 10-minute call from Kampala to Freetown cost $20.00. Last month I chaired a Zoom call for 35 minutes from Freetown with someone from Lagos, Cape Town, Kampala, and Kigali. Total cost: $0.
A hundred years ago, 90% of the market, services, employees, contractors and costs of the world’s largest companies were incurred within a 100 mile radius of the company’s headquarters. Today, there was no radius; people live in Calcutta and work for Tescos, a UK company. People live in Accra and provide back office functions for American companies which have no apparent business in Ghana.
The world has become borderless.
Products and services that were previously restricted by geography have now become available everywhere. Cost differentials are reducing around the world due to reduced logistics and communications costs that come as a result of advances in technology. Technologies like high speed rail, smartphones, 5G, VOIP, RFID, cloud computing, the Internet of things, are all reducing the barriers to entry, reducing the cost of logistics and communications, and forcing a change in the way we go about our business. Some have described these as “disruptive technologies”, because they disrupt our way of life, either positively or negatively. They are bringing competition to our doorstep. What does this mean for business in Africa?
It means that the bubble has burst. We will not be able to continue running businesses that do not provide world class services or products or provide them at more than world class prices. Companies are invading your market, and some of them aren’t even registered in your market. Quality Supermarket is not just competing with Checkers Supermarket; it is competing with Amazon. Makerere University is not just competing with Aga Khan University; it is competing with African Leadership University. These companies are taking Uganda market share away from you. Disruptive technologies are threatening the survival of your business.
Yet, even as they threaten your business, they also bring opportunities. Globalization and disruptive technologies mean that companies that have a product or service that is globally competitive have the opportunity to provide them to a market larger than Uganda or East Africa. The reduced cost of logistics and communications works both ways. You have an opportunity to take market share in other countries at a lower cost and risk than ever before. Your company can sell globally, establish relationships and customers, deliver products and services outside the borders of Uganda with greater ease than ever before. Not only is the risk of growing past the borders of Uganda less, the risk of not growing has increased.
Thriving in this brave new borderless world requires leaders who recognize that they must find innovative solutions to problems, upgrade their own capacity and performance, and find new markets outside of their company’s national borders. It requires employees that are constantly being trained and retrained to ensure that they acquire and demonstrate the skills that will produce products and services that are world class. It requires leaders that recognize that technology must be more than just access to email, or Facebook or WhatsApp. Technology must be used to create or market a competitive advantage. It is not just a cost center, it should be a competitive advantage provider.
I have a few suggestions for you on how to position your company for success in a borderless world:
- Use your investment in technology to help you train your people. The only sustainable competitive advantage in the new borderless world is going to be the quality of your people.
- Use technology to expand your market; find customers outside of Uganda.
- Use your technology to lower your other costs and improve quality in your company.
All of the activities or recommendations require initiating from you. The borderless world is filled with opportunities and threats. The greatest determinant of your company’s fate and the prosperity of your employees is the quality of your leadership. Enhance it, and you will secure the future of your business.
ABOUT THE AUTHOR
Modupe Taylor – Pearce PhD, is a scholar and practitioner of leadership, organization, and management. He is also a leadership trainer, coach, and facilitator who has successfully trained and facilitated workshops for over 10,000 people in various corporations in North America, Europe, and Africa.
Former and current clients include World Bank Group, United Nations Population Fund, Sara Lee, PPG Industries, Ecobank, Fleming Foods, Remington, Kuehne & Nagel, and Potash Corporation.