7th January, 2013
By Senator Babafemi Ojudu
Let me thank leaders and members of AISEC3 Alumni Nigeria for the invitation to present this year’s Michael Omolayole Annual Management Lectures. It is, indeed, an honour to be associated with such a truly global enterprise which has members numbering over 86,000, with over 1 million alumni in 113 countries. As the world’s largest youth-run organisation focusing on providing a platform for leadership, development and opportunities for young people to get experience and the skills that matter, so as to be able to become global citizens and change the world, AIESEC has come a long way since it was formed 64 years ago.
From the modest ambitions but unparalleled vision that led to its formation as the International Economic and Commercial Sciences Students Association, (its acronym is derived from the French equivalent), AIESEC has grown into a phenomenon which is present in 2,400 universities across the globe, providing more than 24,000 leadership experiences to its members and sending students and graduates on 20,000 international exchanges yearly. It is also being supported by over 8,000 partner organisations around the world. Truly, AIESEC is a great example of the age of collaboration.
AIESEC Nigeria, which was started in 1961, has been devoted to creating opportunities for young people to become “globally-minded, emotionally-intelligent and socially-responsible” leaders who are active learners who possess an entrepreneurial spirit. AIESEC Alumni Nigeria carries on this tradition of enterprise and collaboration and the fulfillment of humankind’s potentials after the members of AIESEC have graduated from college. It is fitting that such an organisation as this has chosen this lecture series to honour one of the best examples of entrepreneurial excellence and good leadership, the urbane, socially-committed citizen of the world, Dr. Michael Omolayole. The first indigenous Chairman/Managing Director of Lever Brothers Nigeria plc. (now Unilever Nigeria plc.), whose decade-long leadership took the company to the apex of the business sector in Nigeria, is, himself, a perfect example of enterprise and collaboration.
The phenomenon that I have been asked to speak to – Enterprise In The Age of Collaboration – is basically a product of the neo-liberal age of globalisation. Globalisation does not only mean the possibilities of development, which carries the unlimited potential of international influence, it also opens up manifold vistas and brings forth new strategies for enterprises for corporate bodies, and even individuals and states, concerning how to organise, reproduce, reconstruct and restructure things, resources and people into a whole. This process of organising, reproducing, reconstructing and restructuring into a whole, involves interactions with the parts, from the most limited, atomistic context, a single unit, to a whole complex and limitless patterns of interactions across the globe. Therefore, enterprise in the age of collaborations speaks to the complex challenges that are produced and reproduced by globalisation.
Indeed, the argument that the modern world became global long before the current era that we tend to associate more with globalisation has been pushed stridently by some informed minds. Yet, while there is a lot of merit in this argument, what distinguish the current age of globalisation from the earlier era are the endless specificities in countless multi-dimensional ways which have made it impossible for any life, even in the remotest villages in Africa, Asia or South America, to remain unaffected by the progress of science, technology, communication, politics and economics. Inter-connectedness and inter-connectivity in the current age, in a myriad of ways, are unprecedented in human history.
The mobility of people, capital, and information in contemporary times could never have been imagined even a few decades ago. This is the signal difference between the current age of globalisation and the earlier eras of the global – which some scholars have pointed to. For instance, one of the specificities of this age is the way in which anyone and everyone is implicated in the challenges, dynamics and consequences of the age of globalisation. For instance, new technological, scientific and medical capacities developed elsewhere in the world can determine whether you are able to continue to live at all or whether you will live long in whatever part of the world you are.
To give another example, even if you live in a remote village, satellite technology has now developed the capacity to discover the natural resources hidden in the soil of your village, and international finance capital may soon follow this knowledge to your village to determine whether you will continue to live in your home or whether your home will be taken over with some compensation, so that the business of the extraction of resources can begin in effect. The environmental impact of such extraction would most likely determine your life and life-chances, positively or negatively. Ask the people in the supposedly remote villages in the Niger Delta how this works, or in the Kahuzi Biega National Park region of the Democratic Republic of Congo – where coltan (used in making cellular phones, computers, jet engines, missiles, ships, and weapons systems) is extracted, and they will tell you a story or two about the inter-connectedness of the global age. Why have I provided this larger context and pointed to the endless implications of the age of globalisation? I have done so as a pathway to emphasising the fundamental unavoidability of collaboration in the age of globalisation.
As individuals, as corporations or as states, we may have different capacities to determine the logic, affect the practices or organise for or against the consequences of this age of globalisation differently, but we cannot avoid collaboration in the age of globalisation. In what some others have called the age of networks, collaboration at different levels, from the single units to the complex and transnational contexts, is simply a fact of life. Globalisation, which includes constantly expanding opportunities and unending challenges, continues to propel us towards collaboration and impel us towards synergy. In the age in which many boundaries – including state boundaries, disciplinary boundaries, specialisation boundaries, economic boundaries, social boundaries, scientific boundaries, even medical boundaries – continue to collapse, the push towards greater collaboration is an unavoidable one.
Against this backdrop, I will suggest that there are two critical words in the topic that I have been asked to speak about. These are “enterprise” and “collaboration”. Enterprise is a project or undertaking, one that is typically difficult or requires a great effort. Some use the word basically as a synonym for business. Enterprise is also an initiative, particularly one that requires risk, investment and resourcefulness. These three factors are critical to enterprise, that is, risk, investment, and resourcefulness. On the other hand, collaboration simply means to work jointly with others, or work together, particularly in an endeavour. It involves joint work towards the achievement of a common goal. The root of this word in English is from a Latin word “collaboratus”, which is the past participle of “collaborare,” which means to “labour together.” Collaboration is, therefore, labouring together.
As evident from my preceding argument, and the brief definition of these two terms, in a sense, we can say that both words have a relationship. If enterprise is basically a project or an undertaking requiring risk, investment and resourcefulness, while collaboration is working together in an endeavour, then both are linked. This is because there can be no enterprise without collaboration, and there is no collaboration that does not constitute an enterprise, in one sense or the other. Yet, since the age of globalisation is the age of unprecedented and greatly unavoidable collaboration, indeed, it is very crucial that we continue to examine the structures and challenges of enterprise in such an age. This is even more so when we have to speculate, based on current realities, on the future of enterprise.
While my lecture will concentrate on enterprise in a business sense, that is, as an entrepreneurial economic activity, in some ways, I will also point, to the social whole or governance as an enterprise in itself. As they say, the biggest business is the business of government.
There is a couple of critical questions to answer before proceeding to examine the age of collaboration. The first is, why is this an age of collaboration? The second is, what defines this age? Collaboration has been the operative logic of human life from the start of human history. However, as I have stated earlier, in no preceding age has collaboration been more imperative than in the age of globalisation. Therefore, the age of globalisation is the age of collaboration. It is the age of unprecedented collaboration because of the challenges and opportunities present in this age which did not exist in the past. Therefore, any enterprise in the global age requires collaboration more than ever before. Because of the limitless opportunities as well as unlimited dangers that are offered or presented by this age, we need to collaborate more and more.
In the current era, we need to collaborate more, and also in more complex ways. Let me describe some of the elements of collaboration in this age. If collaboration is working jointly or together with others to achieve a goal, then collaboration involves work, togetherness or collectiveness, jointness, recursion, determination, creativity, sharing (of knowledge), learning, building consensus, some degree of trust or dependability, leadership, resources,recognition, reward, solution and problem-solving. Many of these elements of collaboration seem evident, but let me quickly describe them so that we can see their relationship with enterprise, as well as entrepreneurship. There is no collaboration that does not involve work. In fact, collaboration itself is a lot of work. However, the work involved in collaboration simply means an activity, mental, social or physical.
Togetherness or collectiveness means networking, coming together or acting in relation to one another. Jointness, slightly differently from togetherness, involves the point of convergence, the meeting point. For instance, an enterprise that involves transportation has a point of convergence with an enterprise that sells fuel. Recursion is about the element of recursiveness. It means the process of repeating items in self-similar way. Lasting collaboration involves some repetitive practices that must be done in a particular way all the time. For instance, the relationship between shareholders and a public liability company involves annual reports of profit and loss and the sharing of both in an annually repetitive way. If this does not recur, then the company will not survive. Determination cannot but be present in any collaboration, because it implies firmness of purpose. If the purposes of partners in a collaborative enterprise are not firm and if the partners are not resolute about what they want to share, then the collaboration cannot succeed.
Creativity involves the use of the imagination and the production of original ideas. Sharing involves division in common with others of an asset such as knowledge or technology. Learning involves the continuous acquisition of knowledge and skills through experience and practice. In every collaboration consensus involves ensuring a general agreement on purpose, process and goals. To build consensus, to share and to be together, there is the need for trust, which involves a firm belief in the reliability, ability and strengths of partners in a collaborative enterprise. While the meaning and tasks of leadership is evident, every collaboration need resources and rewards. The first involves assets that can be used to support any collaboration, and the other involves a fair return on the investments in a collaboration, which is not limited to financial returns.
Finally, collaboration involves providing or devising a process of problem-solving or dealing with difficulties. As earlier stated, while all of these elements of collaboration have always existed in one form or the other. However, globalisation and its attendant challenges and opportunities have greatly transformed these elements of collaboration. For instance, what sharing and recursiveness meant before the current age of collaboration are different from what they mean today. A decade or two ago, you cannot save your money in a bank in Lagos and slip a card into a machine in New York to draw the same money saved in Lagos. An unprecedented level of knowledge sharing in the area of technology, financial and management services in the areas of international finance and banking made this possible. Also, the form of international collaboration that makes it possible for you to save money in Lagos and receive it in a machine in New York is also based on a recursive process without which it cannot function well.
Therefore, if you save your money in Lagos and you are able to draw it in an ATM in New York in February, but not from March through November, it would mean that the process does not work, which translates to the possible collapse of the collaboration. The ATM process must repeat itself in the self-same way and almost all the time for it to constitute a good form of collaboration. Let me illustrate my point further about some of the elements of the age of collaboration that I have just illustrated – sharing and recursiveness – so as to show the challenges of enterprise in Nigeria in the age of collaboration. In this age in Nigeria, we have been able to cut many of the unnecessary red tapes, inefficiency and ineffectiveness that existed in businesses. Therefore, in many ways, the customer has also become used to certain practices of the modern economy. Before now, when you send your cashier to the bank to collect cash advances, you know that she may not return until the close of work. But for the most account, these days, you can even use corporate ATM cards to transact your business within minutes.
Therefore, imagine if there is a bank that does not share skills and technology with other banks or is not technologically-compliant enough or reliable enough in a recursive way for its customers. What is means is that the customers of the bank may be able to draw money today, but tomorrow and on many other days, they might be told that “the network is down!” I am sure some of you in the audience have heard this before in one bank or the other. What I am pointing to is that, in the age of collaboration, every part of the whole must not just work together, they must also all work efficiently and effectively for collaboration to work well. The future of the enterprise is bleak in Nigeria, to give an instance, if bank tellers are efficient while the system maintenance department regularly fail to ensure that the operating system work well to support the work of the tellers. Otherwise, you will often hear the tellers telling their customers “Oga, e be like say you go wait o. Dis thin’ no dey work. Abi you go come back?” In the age of collaboration, we all are susceptible to failure when some part of the whole does not function well.
The Future of Enterprise against the backdrop of my analysis of what constitutes collaboration in a global age, the question then arises: What are the challenges of enterprise in this age? And what is the future of enterprise? In the age of collaboration, we have witnessed a complex debate over what constitutes enterprise. The exponential increase in technological advancement, the rapid changes in consumer needs and tastes, the unprecedented expansion in travels and migration, the immediacy and magnitude of new forms of communication, the interconnectedness of lives and businesses, and the global village which have resulted from all these, have turned enterprise from its traditional definitions into what some people now see as basically the “capacity to turn an idea into a successful business”. This is as true of private business as it is of government business.
The example of the Asean Tigers illustrate the truth of this in both private and government business. Enterprise, some people now argue, is no longer about setting up a business, it is about having and mobilising the capacity, skills, competence and vision to ensure success in a highly-competitive and often challenging environment, as Inspire Enterprising, an outfit in the United Kingdom, puts it.
This is even truer in Nigeria with all the grave challenges of our society. The truth however is that the limitations of the environment ultimately constitute a test for the imaginative entrepreneur to overcome the limitations and transform him or herself and her environment through the mobilisation of capacity, skills and competence.
Inspire Enterprising, UK advocates that in the age of collaboration, enterprise should focus on developing skills, attitudes and knowledge in three key areas. These include (i) enterprise capacity, (ii) financial literacy, (iii) and business and economic understanding. All of these would require many of the elements of collaboration which I articulated earlier. () Enterprise capability involves innovation, creativity, risk management, risk taking, a “can-do” spirit and drive to make things happen. Without all these, you cannot hope to run a successful enterprise, private or public, in the age of collaboration. () Financial literacy involves the skill, proficiency or talent to manage both personal and corporate finances and not only to become an informed service provider, but also an informed consumer of financial services. Remember that even where you provide good or services as an entrepreneur, you also consume goods and services.
Therefore, you must not only master your own private and corporate finances, you must develop the skills and the proficiency to understand the intricacies of the financial services offered by your collaborators and competitors. Even the smartest and the most talented entrepreneur who lacks financial literacy will ultimately fail. He or she will be forced into collaboration with individuals and other corporate bodies who will take maximum advantage of his or her financial illiteracy. I know of some gifted people who started businesses that ordinarily would have survived because they had resources and technological talents, but didn’t be because they lacked financial literacy. The ability to understand the business and economic environment is critical anywhere in the world, but especially so in Nigeria. If you want to start a business, there are so many contexts that you have to examine and understand from the political, to the economic and the social. No enterprise can be perfect, but you need maximum knowledge of the environment to be able to stand any chance of succeeding.
For instance, the fact that a certain kind of service does not exist in a particular environment does not mean that such a service is needed in such an environment. Let me be concrete here. The fact that there is no travel agency specifically devoted to booking flights and hotels for Hajj in Nnewi does not mean that an opportunity exists for such a company there. Anyone who lacks such a basic understanding of such a context is ready for a failed enterprise. Any innovative potential entrepreneur in Nigeria must also realise that we live in a “copy-cat” business environment. Therefore, if you want to start a new line of business, you should remember that once your fellow Nigerians see that you are succeeding, in a few months, you will have several competitors. In that sense, if you want to start a new line of business, you must never assume that you will enjoy a monopoly for long. Consequently, part of your planning must involve introducing new competitive edge every time other people copy what you are doing.
You can study other models to arrive at what you need to do.
The answers you get can become your starting point. However, you have to consider whether such an example makes a comparative sense, and how so, in your own situation. Beyond these, however, given that what enterprise means has been greatly transformed in the age of collaboration, starting or transforming an enterprise of the future has changed in significant ways. As Mark P. McDonald, the group vice president and head of research in Gartner Executive Programmes and co-author of The Social Organisation, stated, your business is an enterprise in this age if majority of the following conditions apply: .
The business strategy is based on the results of the different parts of the business working together. If you have separate strategies for different parts of the business, then the company is more of a holding company, and it is less likely that you are an enterprise. . The people in the business think of themselves as belonging to a company that is bigger than their individual team or operating unit. If people identify with their organisational unit more than they do the entire company, then it is less likely that you are an enterprise. The business operates out of a common set of financial resources – meaning underperformance in one part of the business adversely effects the other parts of the business. The business serves different customers and success does not require the customer to buy products and services from different parts of the business. If you separate customers, either by geographic lines or by product or business lines and you do not expect them to cross those lines, then it is less likely that you are an enterprise.
The business uses a common set of information, metrics and measures to run the company. You do not have to have all of the same rules, but there is a core of rules that apply equally across your operations. If the different parts of the business play by different rules and are graded differently, then it is less likely that you are an enterprise. The business shares common systems for similar functions. If you have different systems for the same functions across parts of the business it is less likely that you are an enterprise. McDonald however argues that even though there are successful companies which are not enterprises, such companies “will find it difficult to implement and get benefits out of enterprise based strategies, solutions and approaches because they do not operate as an enterprise”.
To succeed, an enterprise, McDonald argues, needs consolidated leadership, management and governance approaches which all make it possible to make decisions that will benefit the entire enterprise. Let me briefly turn to the government level and ask if this element does not illustrate governance failure in Nigeria. I mentioned earlier that we can approach the state or government as an enterprise – as the Asean Tigers have successfully demonstrated. Indeed, it is the absence of consolidated leadership, management and governance approaches which has made it impossible for decision-making at most levels of our government structures in Nigeria to benefit everybody. An enterprise must also put the customer at the centre of the company, because it is the one thing that all the aspects of the business share. This is also true of the state and government. In an ideal situation, government-as-enterprise should also put the citizen at the centre of governance.
McDonald advises every enterprise “to reduce barriers or impediments to internal operations that reduce customer service or make it harder for the customer to engage all parts of the company”.
An enterprise must also concentrate on enterprise level solutions so as “to gain scale cost and service efficiencies”. According to McDonald, studies have shown that companies that have high level of digitized platform enjoy 20% higher margins than their competitors. As an enterprise you should also take “advantage of your enterprise status by managing the entire company from the perspective of bringing more resources to bear on high potential and growth opportunities”. Sometimes, some businesses create separate business units, often without the capacity and advantage to dominate an early forming market. This often leads to terrible losses. In the age of collaboration, the future of enterprise also depends on having an enterprise strategy, apart from corporate strategy.
In Nigeria, many businesses have corporate strategy without enterprise strategy. Enterprise strategy is described as “the broadest level of strategy, formulated at the strategic level of an organisation by the Chief Executive, other members of top management and the Board.” Enterprise strategy joins “ethical and strategic thinking about the organisation and aligns organisational behaviour and strategies to standards, norms and expectations in the broader environment. It involves addressing the social and political legitimacy of an organisation, so that such an enterprise is regarded as a good corporate citizen, acting socially and environmentally responsible, and taking all stakeholders, not only shareholders, into consideration.” While corporate strategy “ focuses on achieving the organisation’s financial goals, enterprise strategy focuses on an organisation’s non-financial approach towards stakeholders, the natural environment and its role in society.”
Some entrepreneurs in Nigeria think this is not important because they forget that it is because we all do not put back into the system that leads to the kind of consequences that we all suffer in our political, economic and social circumstances. The age of collaboration is the age in which the state and government cooperate with businesses, the civil society and citizens to ensure that a better society is created and that future generation will find a better world when they arrive here.
Distinguished guests, ladies and gentlemen, it has been argued that the 21st century, as the age of collaboration, is a direct consequence of the knowledge economy, one in which knowledge is considered as the most important asset. James Brian Quinn, author of The Intelligent Enterprise: A New Paradigm, argues that in this new age, “the organisation of enterprises and effective strategies will depend more on the development and deployment of intellectual resources than on the management of physical assets.” This is due to the immense challenges and opportunities presented in this age. These challenges and opportunities have made collaboration an imperative “because many of today’s problems are complex, often demanding cross-disciplinary expertise”. In the age of collaborative technology, enterprise has been and will continue to be transformed. As Neil Howe and William Strauss observed in their study of the effects of generational differences on this age, those who were born between 1982 and 2005, that is, the first generation to grow up with mobile digital technology, expect nonstop interaction and cooperation and “They will tend to treat co-workers as partners rather than rivals … and use information to empower groups rather than individuals.” In the future therefore, those who learn how to collaborate will be the winners because collaboration itself is the best and biggest enterprise there is in this age.
•Senator Babafemi Ojudu delivered this paper at the Michael Omolayole Annual Management Lectures at the Nigerian Institute of International Affairs, Victoria Island, Lagos, on 6 December 2012