While facilitating a financial management training session for entrepreneurs, I was struck by a comment made by one participant to the effect that he had initiated and closed 5 business ventures over a three-year period. While interrogating the comment further through an open forum, I realized how often people change from one business venture to another in pursuit of success. Though most participants were adamant that change is good using phrases such as “flogging a dead horse does not work” and “try many things and keep only what works” amongst others, I was impressed by the minority who asserted that patience in building a business is key.
The discussion reminded me of 2 entrepreneurs I interacted with during my banking career. One, who I will call James changed from construction, retail, agriculture and general supplies over a 5-year period. Within agriculture, he had changed between poultry, tomatoes and water melon and operated between Kiambu, Kajiado and Embu Counties. The second one, whom I will call Ken has had only two known ventures namely real estate and retail. To date, he has concentrated his real estate business around buying and selling of land, property management and development of rental properties. His retail business involves building materials and he is also an author writing mainly on investment and personal development.
Ken has gradually gained expertise and experience which has helped him to make better decisions and respond to challenges. He has also benefited from a growth in brand recognition to the extent that some people refer to him as “Ken wa Mashamba” (Ken the land seller). In addition, he has built a strong network and built relationships with clients, industry colleagues and other players in the real estate sector which has generated referral business. To the contrary, James’ habit of frequently changing businesses has led to a general lack of focus on specific projects and opportunities within each of the sectors he has ventured into. In addition, he has spent time, money, and energy in building ventures and then abandoning the same mid-stream thus failing to learn lesson that could improve his expertise. Worse still, due to lack of a clear brand identity, he does not have the benefit of strong networks and relationships in any of the sectors that would bring referral business.
Proponents of frequent change of business ventures during the discussion justified their stand with a quote “Try many things, keep what works and discard what does not” from the book “Good to Great: Why Some Companies Make the Leap and Others Don’t” by Jim Collins. They correctly stated that the author encourages organizations to try different approaches, strategies, and tactics in pursuit of their goals. He also encouraged them to be open to new ideas, and not be afraid to take risks. The author states that companies should also be rigorous in their evaluation of these experiments, and be willing to abandon any ideas that do not yield results. Read alone, this section of the book can support frequent change of ideas, approaches, strategies and ventures. However, the author, in a different chapter, states that successful companies stuck to a core ideology with all experiments, ideas and change programs being carried out within the confines of the core ideology. For example, a business in real estate should implement all ideas within this sector and should quickly reject any ideas that do not fit into a real estate business. In another chapter the author advocates for cumulative, progressive change.
The book by Jim Collins was written after extensive research in the 1990s involving Stock Exchange listed companies within the USA. It may therefore not hold water in different contexts. However, it is worth noting that most successful people are known for “one thing” they have done well. Examples include Bill Gates (Computer software), Zuckerberg (social media), James Mwangi (banking), Manu Chandaria (manufacturing). They however have investments in other sectors, most of which only a few of their close allies know. Using Kenyan slang, the other ventures constitute “side hassles.”
On the basis of the foregoing, I would advocate for consistency in one line of business or career. This viewpoint is supported by Napoleon Hill in “Think and Grow Rich” where he coined the term “Stickability” to describe the quality of persistence and determination in achieving a goal even in the face of obstacles and setbacks. He asserted, with examples that the most successful people in life are those who possess this quality, as they are able to persevere through difficult times and eventually achieve their objectives. However, I would also advocate for change of venture or career due to lack of success – read my article on the emaciated cow here – https://umslgroup.com/the-emaciated-cow/ – or where someone realizes that a career or business venture is misaligned to his or her personal interest. One can also change if their current venture is no longer viable due to market changes or new competition, where growth prospects are limited (read my article on career rigidity here https://umslgroup.com/career-rigidity/ – or when the risks inherent in a venture are higher than one’s risk appetite. The change however needs to be the exception and not the norm since “Too much of anything is poisonous,” including change
Dr. Weru Mwangi is the CEO & Lead Consultant at Ultimate Management Solutions, a firm specializing in training & consultancy in Finance, Governance, Strategy, Risk Management and Leadership Development. He can be contacted on weru@umslgroup.com
