Creating your own reality


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Editor Kurt Illetschko writes: I have followed developments in South Africa over the past few months with a mix of incredulity and dismay. As time went on, my feelings shifted increasingly towards dismay, but not for the reasons some of you might expect. To deny that times are tough would be foolish but I refuse to believe that the degree of despair that appears to permeate our society at present is justified.

South Africans have always been a nation of survivors but lately, this seems to have changed, and not for the better! Chances are that if we collectively allow ourselves to continue on the current path it will sap all strength out of us.
I am concerned that the degree of negativity South Africans allow to enter their minds, pre-occupy their thinking and permeate their conversations may pose a greater threat to our economic survival than the worst commercial meltdown could. This has to stop!

“It is never too late to give up your prejudices”
 

Henry David Thoreau, American author
Just the other day, I came across a story that was doing the rounds among MBA students way back during the mid-1980s. In my view, it demonstrates how easy it is for people to create perceptions based on rumour and hearsay rather than on reality. Although this story is more than 20 years old, it has regained relevance because it mirrors our current situation. Click here to access it, read it and tell us what you think.

It truly ain’t that bad!

People tend to overlook the fact that many of our current worries are not so much the result of problems caused by Eskom, the crime situation or even alleged inefficiencies in government departments but are caused by global events. Most notably, the phenomenal increases in the oil price, which has quadrupled over the past few years, coupled with inflation and unemployment figures that are on the up worldwide are at the root of many of our problems.
For example, rising unemployment figures experienced throughout the EU and the USA for the first time in several decades are a clear indication that many of our problems the result of global events and beyond our control. Our top business leaders know this.

In a snap survey conducted by Business Day the other day, top CEOs Steve Booysen (Absa), Michael Jordaan (FNB), Grant Pattison (Massmart), Nick Badminton (Pick n Pay), Martin Lots (Jusco), Mike Upton (Group Five), Gary Bell (Bell Equipment), Clive Thompson (Barloworld), Mark Cutifani (Anglo Gold Ashanti) and David Brown (Impala Platinum), were reasonably upbeat about the future.

The questions put before them and a summary of the responses they provided follows:

Although it appears that this poll was carried out in a rough and ready fashion, it nevertheless shows that the vast majority of our top CEOs remain convinced that South Africa’s future economic outlook remains positive. Even economists, generally not given to waxing lyrical, agree. In fact, they are even moderately bullish in their outlook. The Reuters Econometer, a confidence measure of six weighted indicators calculated from responses of a panel of leading economists, rose from 184.54 in May to 197.77 in June.

Nicky Oppenheimer, chairman of DeBeers and a non-executive director of Anglo American, agrees. In an interview with the Sunday Times Business Times, he said: When you look at South Africa from a macroeconomic point of view, the government has done extraordinarily well. I believe they will go on doing so.

Act rationally

In my view, the above findings contain an important lesson: many of the threats to our economic well-being we are facing are the results of events beyond our control. We cannot really influence them, so what good will it do to worry about them? We should rather focus on finding ways around them. I suggest, for example, that instead of being paralysed by the possibility of power failures, it would be more useful to install a generator ahead of need.

There is a lighter side!

Now that I have said what I had to say, let me close with a lighter side. It may surprise you to learn that according to the Sunday Times, there actually is one! One of their writers asked: Do ladies skirts get shorter when the economy gets tighter? Then he offers an answer  with mixed results.

The hacks point of departure was the apparently well-entrenched theory that the length of skirts goes up when the economy goes down. It has been said for ages that flirty fashions brighten a dismal economic landscape and help clothing manufacturers to save on fabric costs.

The results of a survey conducted by Taubman Centres, an investment trust that builds shopping centres, supports the theory of the shortening hemline. It produced the finding that… the hemline indicator is a quirky yet historically accurate economic forecasting tool.

Others are not so sure. Fashion gurus point out that there is a significant time lag between the point in time when future fashion trends are conceptualised and the release of the resulting range. Especially during this most recent downturn, the economy has moved much quicker than the fashion gurus would be able to respond.

I don’t know who is right but at the risk of being branded a MCP, I can only say that from a male perspective, shorter skirts tend to make any period of near-recession infinitely more bearable.

Fact: the cake hasn’t disappeared!

I am a firm believer in the well-worn phrase ‘When the going gets tough the tough get going’. For example, pessimists will have us believe that during times of economic slow-down, business is grinding to a halt but this is a fallacy. What really happens is that the cake becomes smaller. To stay afloat, you simply have to grab a larger slice.

While entrepreneurship is not right for everyone, those who have what it takes to succeed should make their move now. At a time when others batten down the hatches, you should find it easier to secure suitable business premises and hire the kind of people you need on your team to build your business. You should even find it easier to secure new customers because they will be more receptive to imaginative proposals.

For all these reasons, I’d advise you to move cautiously but with determination. We all know by now that the idea of employment for life has become a myth and this is not going to change. No chance! Not ever! This realisation leaves you with two options: You can make your move now and enter the world of entrepreneurship from a position of strength, or you sit back and wait for the axe to fall. Which will it be?

A franchise eases the transition

Should you decide to take charge of your destiny by becoming an entrepreneur, franchising may be the best route to go. The combination of brand recognition, extensive initial and ongoing support and access to bulk deals will certainly help you to make a smooth transition.

Even if you go the franchise route, however, a cautious approach remains advisable. A franchise is a blueprint for success but offers no guarantees. To make it in these somewhat tougher times, you need to do your homework with extra care, select an opportunity you can be passionate about and, above all, avoid over-extending yourself financially. It is better to start out with a more modest business and keep a financial nest egg in reserve. You can always expand or upgrade later.

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