Crowd Funding: Implications for the South African Entrepreneur

Abstract:

Crowd funding is a new concept.  There are specific implications to be considered by entrepreneur and investor alike.  It is too early to tell how crowd funding will shape South Africa’s entrepreneurial landscape.  Time will eventually tell the story.  Until then, entrepreneurs should carefully consider this funding option.  And, when they do decide to use crowd sourcing, they should proceed with caution, courage and wisdom.

INTRODUCTION

Crowd funding seems to be the latest silver bullet for start-ups and small entrepreneurs that are looking for funding. 

A quick search on Google reveals that there are there are 7.1 million pages on the Web that refer to crowd funding.  Narrowing the search to pages from South Africa, yielded 15 thousand pages at the time of writing this paper (23 August 2012).  Many of these pages represent popular views about crowd funding.  Some are from news agencies (magazines, newspapers, etc.) that offer basic information about crowd funding.  Other pages are blogs where one can find many personal and anecdotal views about the subject.  A few pages contain academic articles about the subject, and a commensurate few refer to legal issues that could arise from crowd funding.

From a South African perspective, crowd funding has been on the scene for about four years.  Being a relatively new concept, little objective information exists about crowd funding in South Africa.

This paper is an attempt to present exploratory research about crowd funding.  Readers must take care that it is not an exhaustive elaboration about the subject.  Nor is it able to address all current and potential issues associated with crowd funding.

ORIGINS OF CROWD FUNDING

Wikipedia lists a number of groups or organizations that kicked off the concept of crowd funding:

·         In 1997 a British rock group, Marillion, raised $ 60 000 from fans through the use of an internet campaign

·         ArtistShare launched a crowd funding website in the USA around 2000/2001.  This was quickly followed by similar websites – each claiming huge successes

·         The Japanese rock band, Electric Eel Shock, raised 10 000 Pounds Sterling from fans in 2004

·         A certain Franny Armstrong funded a movie and is associated with the funding of a rock band named Morton Valence in 2007.

DEFINITION OF CROWD SOURCING

At present, there is no standard definition for the term crowd funding.  A number of definitions are listed hereunder:

·         The Online Oxford Dictionary defines crowd funding as a “practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet”

·         The website DailyCrowdSource.com states that crowd funding is “asking a crowd of people to donate a defined amount of money for a specific cause, project in exchange for rewards”.  The website also explains three categories of crowd funding:

o   Equity based funding, where the entrepreneur offers a percentage of equity in exchange of funds

o   Donation based funding where tangible tokens such as T-shirts, CD’s. etc. can be offered in exchange of funding

o   Debt-based funding where lenders or donators are promised financial returns or interest at some point in the future

·         The Financial Times Lexicon defines crowd funding as “A new and emerging way of funding new ideas or projects by borrowing funding from the crowds”

·         The MacMillan Online Dictionary defines crowd funding as “the activity of getting a large group of people to finance a particular project, especially by using a website where people can make contributions”

·         The website USLegal.com states: “Crowd funding refers to the collective cooperation, attention and trust by people who network and pool their money and other resources together, to support efforts initiated by other people or organizations. The purpose of crowd funding varies, from disaster relief to citizen journalism to artists seeking support from fans, to political campaigns. Crowd funding is also used for startup (sic) companies. It is sometimes called crowd financing or crowd sourced capital. An entrepreneur seeking to use crowd funding typically makes use of online communities to solicit pledges of small amounts of money from individuals who are typically not professional financiers”

·         Lastly, the South African website startme.co.za repeats the Online Oxford Dictionary’s definition of this term.

Other websites state the dominant role that social media plays in the solicitation of crowd funding.

Considering the definition of USLegal.com, a few essential characteristics of crowd funding can be listed:

·         There has to be some form of trust between entrepreneur and investor

·         Funding is obtained mainly in the form of pledges

·         There can be different forms of counter-performance from the entrepreneur in exchange for funding

·         Investors can demand equity, interest or some form of dividend in exchange for funding.

Another form of crowd funding is known as “Social Franchising”.  The purpose of social franchising is to provide funding for community upliftment.  Examples include but are not limited to:

·         Building of schools;

·         Donate food to communities;

·         Teaching language courses;

·         Teaching financial literacy (such as the micro bank, MyBnk, that was founded in the UK);

LEGAL OR REGULATORY FRAMEWORKS

In 2012 the United States President, Barack Obama signed the JOBS[1] Act in an attempt to boost small business development. At the same time the Crowdfund Act of 2012 was announced and the US Securities Exchange Commission was tasked with the creation of rules to control crowd funding in the US.

The JOBS Act allows accredited investors to provide equity funding to entrepreneurs who want to make use of crowd funding. 

The Crowdfund Act, on the other hand, puts limitations on the maximum amounts that could be sourced through the use of crowd funding.  In addition, it puts a duty upon brokers, issuers and funding portals to safeguard investors against fraud.  The Act also allows for the creation of self-regulatory institutions that can safeguard entrepreneurs and investors alike.  There is also a duty of full disclosure that must be made to investors.

In the South African context, crowd funding is still in an infant stage.  At the time of writing this paper, no draft legislation has yet been proposed about crowd funding in Parliament.  In 2011, D. J. Hislop argued that crowd funding is view with a great degree of scepticism.  The resemblance to a pyramid scheme has been mentioned, which is understandable.  Since the famous Kubus[2] debacle of the late 1970’s, South Africans cannot be blamed for being sceptical about crowd funding.  Though there is not yet any direct evidence to associate crowd funding with a pyramid scheme, investors and entrepreneurs may want to err on the side of caution – especially in cases where funds are offered from off-shore sources.

A quick visit to crowd funding websites in South Africa and elsewhere shows that some investors are found outside one’s own national borders.  Dealing with contracts or legal actions in one’s own jurisdiction is already difficult, time consuming and expensive. To transact with investors, lenders or donators in other jurisdictions (such as India, Germany, Lebanon, Russia, Bulgaria, etc.) can make this type of funding very expensive – especially if entrepreneurs prefer to have written agreements in place.  The cost to make use of off shore funds through crowd funding can thus outweigh any potential benefit that was contemplated through such funding.

Even when dealing with crowd funding sources within South Africa’s national borders, great circumspection would be advisable.  In many cases, investor/lender and entrepreneur are introduced to one another through some sort of mediator.  Typically, parties are introduced to one another through a website or social medial site.  This implies that there are three parties in any crowd funding transaction, namely:

·         Investor;

·         Entrepreneur;

·         Intermediary;

It is thus not uncommon (like in other situations where investors and entrepreneurs are introduced to one another) that a commission is payable to the intermediary by either the investor or the entrepreneur.  Great care must also be taken to guard all parties against misrepresentation by anyone in this tri-partition.

Next, there is no guarantee that intellectual property rights are protected in this type of finance.  Many institutions that offer crowd funding, advise that entrepreneurs should protect their intellectual property before making use of this type of funding.  The intermediaries in crowd funding transactions sometimes take a position that investor and entrepreneur must reach agreement on the protection of intellectual property.  Until some definitive case law[3] is published in South Africa about the protection of intellectual property rights in a crowd funding situation, entrepreneurs must be aware of a vast minefield that awaits them.

In 2011 a patent dispute arose between Kickstarter and ArtistShare.  Both organizations claimed that they have legal right to operate as crowd funding service providers.  In addition, ArtistShare insisted that it is not infringing on the patent rights of Kickstarter to offer crowd funding services. This type of dispute can create complications for investor and entrepreneur if it is found that ArtistShare indeed infringed on the other party’s patent rights.  Thus the one party, who loses such court case, could be in a position where the relationship between entrepreneur and investor is being threatened.

It is not yet clear what view South African legislation will take in terms of interpreting crowd funding as a form of dealing in securities.  In Canada and the United States, security and exchange rules are being reviewed.  In the United States, the so-called Howey Test is used to discover whether a transaction is an investment contract or not.  Investment contracts in the United States are directly associated with securities.  In terms of the Howey Test, a transaction would be an investment contract (security) if:

·         There was an exchange of money

·         There was an expectation of profit arising from the exchange of money

·         The exchange of money was about a common enterprise

·         There is a sole dependence on the efforts of a promoter or third party to obtain finance.

Nor is it clear what position the SA Reserve Bank will take when overseas crowd funding sources are being used.  International banking transactions and exchange control rules could be very difficult to understand.  Entrepreneurs would therefore have to make use of respectable international bankers to assist with such transactions.

PRACTICAL CONSIDERATIONS

This paper referred in a previous section to an opinion that crowd funding could be a type of a pyramid scheme.  If one considers some of the definitions of crowd funding, it is understandable why crowd funding could be seen as a pyramid scheme.  Firstly, there are multiple people who are approached to invest.  Secondly, unless the money received is a donation (which has to be recorded in anyway on one’s accounting system), meticulous records need to be considered regarding each investment.  The entrepreneur must be able to know:

·         Who donated/invested

·         What was the quantum of donation/investment

·         What is the return (interest, equity or dividend) expected by the investor

·         What are the main conditions and performance clauses that control the investment

·         What are the maturity date(s) by which investments must be paid back, interest must be paid, or dividends must be paid.

The consequences of ill-kept records could be disastrous and could lead to great losses for the entrepreneur and investor alike.

In practice, Skopus Business Consultants have encountered many entrepreneurs who believe that angel investors (a synonym for crowd funding in some circles) are great humanitarians that do not expect anything back in return for funding that is given to the entrepreneur.  Though there are such humanitarians around, the majority of organizations or individuals that offer crowd funding expect definitive quid pro quo[4].  There is thus no free lunch in the world of crowd funding.  Angel investors, however, differ from crowd funders in the sense that the angel investor is a single person taking a risk, whereas the risk is spread out when crowd funding is used.

Any form of funding – even a donation – should be viewed in a very serious light.  It would be expected that the entrepreneur managers his/her business frugally and that there will be sufficient cash flow at the end of a given time to:

·         Pay back the investor; or

·         Pay the dividend expected by the investor; or

·         Pay back the interest demanded by the investor;

FEASIBILITY

Crowd funding is associated with innovation.  Thus, a new idea is in need of funding so that it can be developed or commercialised.  Given this association with innovation, it stands to reason that ideas have to be well thought out.  The slightest scepticism from an investor/donator about an idea could mean that the entrepreneur cannot meet his/her funding targets. 

Some products may evoke more scepticism than others.  As an example, a device that claims to work with resonance frequency and that can relieve or cure all sorts of illnesses (including cancer or HIV/AIDS) would have to have thorough research and test results – including clinical tests – to back up claims.  Without such rigorous evidence, the investor/donator could just as well consider to fund a cough mixture made out of “Indonesian snake sweat”[5].

There may be requirements that certain certifications (such as the CE-certification or an SABS mark) must already be assigned to the product before an investment/donation could take place.  Other standards such as ISO standards may also be required to convince funders.  Working prototypes may be required to secure funding.  There are many funders that will not consider any pitch or application unless a working prototype can be demonstrated.  For the entrepreneur, this can be a Catch-22 situation because all available funding may be exhausted, thus not leaving any room for certifications or working prototypes.  The entrepreneur would have to spend significant time to convince funders about the validity of the idea[6], whilst the funder would have to take a giant leap of faith.

Fortunately, this Catch-22 is slowly but surely changing in South Africa.  As more innovation hubs are created, and as more universities start to focus their third stream activities on innovation, innovators will have a sporting chance in the future to go to funders with working prototypes that are well designed and that have all certifications either in progress or in place.

GOING FORWARD

This paper is by no means comprehensive.  More research is required to understand how crowd funding will shape the South African innovation or entrepreneurial landscape.  Important lessons will be learned on this journey.  Entrepreneur and investor alike are going to make mistakes and pay an expensive price in the process.  But, like the pioneers before them, someone has to break the way open so that future generations can benefit.

No one can say how crowd funding is going to benefit or harm the South African entrepreneur.  That will be determined by the jury of time and the facts uncovered by future research.

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[1] Jumpstart Our Business Startups.

[2] The Namakwaland farmer, Adriaan Nieuwoudt started a scheme with milk cultures that was called “Kubus” cultures.  It was one of the most widely published pyramid schemes in South Africa at the time.

[3] Neither Skopus Business Consultants nor the author of this paper is law practitioners.  The view expressed in this sentence should not be construed as legal advice.  It merely represents reasonable business circumspection.

[4] Exchange for value.

[5] In the 1800’s, many salesmen travelled around with cures that apparently contained snake oils and that were purported to have had magical curative powers.

[6] The old-fashioned Harm vs. Utility argument thus needs to be dusted off, dressed in a new coat, and used with vigour.

Dimensions of Service Excellence – Part 1

Service Excellence is a term that generates many debates because there is not a single company on this planet that does not believe its service levels are the best in the world.  Interestingly, though, companies find it very hard to clearly express their understanding of service excellence.

One can speak many words about “delighters”, “detractors”, “satisfiers”, “hygienic factors”, or other terms that are so richly bandied about.  In our experience over the last 28 years, we are often surprised by the reaction we get when we tell our clients that service excellence could be measured against:

v  Eight service excellence indicators; and

v  Seven service efficiency indicators;

When clients are told about these indicators, the majority response from clients is that the indicators are “too simple to use”.  Others view these indicators as gimmicks thought our by some guru whose book is the hot flavour of the day.  Clearly, people who take such a view cannot be blamed because there are many books and speakers that promise a magic recipe without saying that it takes an awful lot of work to turn the magic promised by the gurus into reality.

Service Excellence simply means that the customer will be left with an impression that everything possible has been done to meet the customer’s demands.  There are some who believe that this simple definition means that best prices and a big smile from sales staff translate into service excellence.  Unfortunately, the true test of service excellence happen before the sale and in the months or years after the sale has been concluded.

Let’s consider the eight service excellence dimensions with actual examples:

1         Time

How long must a customer wait before actually being attended to?

v  Recently, the author and a client had to go to a financial institution to finalise paperwork for a client.  Upon arrival at this institution, the reception desk was unmanned.  For the next fifteen minutes, staff of this financial institution walked past the people in the reception area and pretended that they did not see anyone.  “Ask Once”?

v  At a retail store with a red square in its logo, staff working the cosmetics department seems to take a view that customers are invisible.  A wait time of thirty five minutes was recorded during an experiment done at six different locations;

2         Timeliness

Timeliness refers to services being performed when promised.  Timeliness affects big Corporates and small entrepreneurs alike.  Examples include but are not limited to:

v  A financial institution that has taken six years to respond to a need expressed by a potential large corporate client;

v  A plumber promises to be on site on “Wednesday, ten o’ clock” but shows up six hours later with no explanation or forewarning about being late;

v  A company receptionist/switchboard operator promises that Mr. X will call back by “the end of business today”, and four weeks later, there is still no word from Mr. X.

3         Completeness

Completeness refers to the delivery of all aspects of service that were promised to the client.  As an example, were all the parts that the client ordered actually delivered?  In our practice, we often encounter examples such as:

v  Financial institutions that are very keen to help with financing clients’ businesses, and assuring clients “that we have all that we need”.  Two or three weeks later, clients are informed that more paperwork must be completed “to satisfy credit”.

v  A cell phone company recently promised to help with the set up of the synchronization between a desk top and the smart phone because the client had no idea how to do it.  After three hours, the client was informed that “it is not possible to do this set up here.  You have to go to Midrand for that”;

v  A caterer discovered that some ingredients that was needed on the day of a function were missing.  The client was very surprised to find that a four-course meal suddenly turned into a three-course meal at the function;

v  A painter was asked to waterproof a roof, and used half of the quantity that the client actually paid for.

4         Courtesy

Typically, courtesy refers to frontline employees who greet customers cheerfully.  But courtesy can also refer to something as simple as being spoken to in the language one uses.

v  A large South African university’s call routing system provides clients with two options: “Press 1 for Afrikaans”; “Press 2 for English”.  Afrikaans clients, who dutifully press 1, find that they are answered in English;

v  A very large telecommunications company’s staff does not make eye contact when dealing with clients.  The same company’s staff are not seen as friendly;

v  A small hardware store owner in a modest neighbourhood greets every customer as he or she enters the store;

5         Consistency

Consistent service means that service delivery is always the same for every customer, and every time the same for the same customer.  In one of our service excellence interventions an executive jokingly stated that her company’s service levels are consistently bad all the time.  This executive was responsible for service excellence in that company.  Consider examples such as:

v  “Sorry, our policies and procedure have changed since you were here last week”;

v  A licensing department who issues a license against incomplete documents to one client, and refuses to do the same for another client “because that case was different”;

v  A financial institution that provides sterling service today but is not able to handle the same request the next day;

v  A restaurant that serves a hot meal to one guest and a bland, cold version of the same dish to another guest at the same table;

6         Accessibility and Convenience

Many companies use call centres for the sake of handling as many cases in a day as possible.  Unfortunately, there are times where customers want to communicate by email, letter, or a personal visit to a business enterprise.  How easy is it for a customer to communicate with a company without having to dial a call centre?  How easy is it to have a face to face meeting with a service provider to discuss a particularly thorny issue?

7         Accuracy

Is the service performed right the first time, or must the customer:

v  Repeat the same request multiple time (hopefully to the same person):

v  Keep on asking what would be done about the rest of a query or request?

v  Keep on asking a bank to fix an error that was corrected by passing a correction that was also the wrong type of entry or the wrong amount?

8         Responsiveness

Can service personnel react quickly and resolve unexpected problems?  Moreover, can your service personnel:

v  Respond to a customer request in the time that the customer asked?  For example, if the customer asks for a call back at 09h00, will the call back indeed happen at 09h00?

v  If a customer sends an email and asks for a written response by end of business, will such response actually be received?

v  If a customer enters as store and asks to speak to X, how quickly will someone find X, and how quickly will X be available to help the customer?

Skopus Business Consultants specialises in helping organizations achieve service excellence.  Contact us on info@skopus.co.za for a consultation.

This is the official blog of Skopus Business Consultants.  Visit us at www.skopus.co.za

The Skopus Prize is a trademark and intellectual property of Skopus Business Consultants.

More details about the Skopus Entrepreneurship Prise can be found at www.skopus.co.za

An Appetite for Service

What was meant to be a romantic Valentine’s evening quickly transformed in a service nightmare of note.  For Skopus Business Consultants, service excellence is a non-negotiable issue, and because we are attuned to service excellence it is easier to notice areas of improvement all the time.  A restaurant on Main Road, Randburg proved to be a case study of how service excellence can be improved by leaps and bounds.

The initial contact with the restaurant was quite pleasant.  The phone was answered within the proverbial three rings and the reservation was quickly noted down.  The person taking the reservation put down the telephone before it could be clarified that a non-smoking area would be preferred at this establishment

Remembering the excellence one always got at the old Munchiner Haus in Braamfontein, the short journey to the venue was filled with excited expectations which quickly were invalidated by a series of incidents that could be viewed as tragic-comic to say the least.

The entrance to the restaurant seemed to be more complicated than any maze that ever confronted mankind.  No fewer than four possible dining areas were observed and no one was able to locate the booking made earlier in the day.  Perhaps a little booth right at the main entrance to the restaurant’s courtyard could have solved the feeling of utter confusion when arriving.  Having been sent upstairs, downstairs, cross-stairs and upstairs again, the booking was eventually found on a dirty scrap of paper and two hungry (slightly irritated diners) were escorted to a very dinghy-looking booth in the smoking area.  Requesting a seat in a non-smoking area created the finest “cat in the pigeon coup” reaction one could imagine.

Eventually, the guests were escorted to a table downstairs.  One of the guests made a remark that she works for a reputable hotel school and that service should received attention at this establishment.  Under normal circumstances, however, one would expect such a remark to raise awareness about service excellence but in the case of our host, the remark could just as well have been made to the main course.

There is an old saying stating that the blandest food could be served to a king if it is done with a flourish.  Not being a food critic but rather interested in service levels, the author will reserve his opinion about the quality of the food.  Two remarks may be appropriate at this time, namely that the huge portions justify the slightly inflated prices.  Last, the author never before tasted such buttery, melt-in-the-mouth herring as that served at this place.

Though the rest of the evening went reasonably well for the author and his wife, the group next to us were less fortunate.  No fewer than twenty “sorry about that” utterances could be heard from the wait staff in about an hour and a half.  One guest’s main course was not served with the rest, and when the course arrived, it turned out to be the wrong order.

“Sorry about that”, and back to the kitchen.  After the third attempt and as many “sorry about that” mumblings, the correct main course arrived but it was colder than a well-digger’s feet.  Another “sorry about that” accompanied the cold food to the kitchen, after which it returned a few minutes later; thanks to modern microwave technology, we presume.

More irritating and horrifying than the stream of “sorry about that” we overheard, was the way that the wait staff navigated the dining area.  One does not pass between a wall and a diner’s seat to move to and from the kitchen when there is a large passageway on the opposite side.  It is not pleasant to see how diners are being bumped while attempting to have a bland meal, or how the nervously reach to the dinks glasses before it might tumble over when a clueless waitron insists to navigate the narrow gap between the diners’ chair and the wall that separates the dining room from a rather smelly kitchen.

The coup-de-grace of the romantically intentioned evening came when a waitron served wine to the guests behind the author’s wife.  A photo had to be taken to memorialise this horror of horror forever and a reminder to never, never, never see wine served like Valentine’s Day 2012.  Carrying the wine on a tray is perfectly acceptable.  But, putting the tray between one’s knees so that the bottle of wine could be opened is simply not done.  Having realised that a photo was taken, the tray was promptly put on the floor after which the titanic struggle to open the bottle of wine, continued.

The came the moment when all appetite disappeared and was overwhelmed by an uncontrollable urge to leave immediately.

The wine bottle was snugly fitted under the left armpit.  After a quick wipe over the face, the cork screw was manoeuvred until the cork came out with a loud pop.  Just one though flashed through the author’s mind at that moment.  Would it not have been better to place the wine bottle on the table and then attempt to open it?  Actually, more thoughts came up like lawn mushrooms after summer rains. 

v  How do smelly armpits and a bottle of expensive plonk in a restaurant that serves bland food actually complement one another?

v  How many “sorry about that” could a single diner endure before jumping off a cliff in despair?

v  How many times can wait staff afford to get it wrong before disgruntled diners decide to leave a one-penny tip?

In the hour and a half that the author and his wife tolerated questionable service, three other couples who waited for a table in the adjoining bar decided to leave.  It was not as if the downstairs restaurant areas we filled to the brim.  At least four empty tables could be spotted – and those tables remained empty form the time the author and his wife arrived, until they left.

A restaurant with empty tables on Valentine’s Day?

One wonders why.

This is the official blog of Skopus Business Consultants.  Visit us at www.skopus.co.za

The Skopus Prize is a trademark and intellectual property of Skopus Business Consultants.

More details about the Skopus Entrepreneurship Prise can be found at http://www.skopus.co.za/

DECIDING SO THAT WE CAN DECIDE TO DECIDE

With the latest banning of young Julius, many radio commentators (especially those on my favourite station) preach that the country is in need for more debate.  Have we not had enough of debates over the years?

1)    We debate bad service delivery;

2)    We debate bad policing and lack of training;

3)    We debate the worst education system in the world;

4)    We debate the fact that we are leading the world in TB and HIV;

5)    We debate the fact that politicians enrich themselves by asking for “development incentives” and not for bribes;

6)    We debate racism that stubbornly stays when it suits whichever party needs to play that card;

7)    We debate the E-Tolling system and the clumsy way that is handled;

8)    We debate the fact that prisoners can walk out of prison because some official signed the wrong papers at the right time for the prisoner;

9)    We debate children that are out of control;

10) We debate to debate, because debating is on of our new national past times;

Three important indices back up the fact that all our debates simply wears out our vocal cords.

1)    The Global Competitiveness Index shows how this country is deteriorating when it comes to health, primary education, tertiary education, service orientation, and work force quality.

2)    The Global Entrepreneurship Index shows that we lack far behind African countries that went through Arab Springs last year.

3)    The Global Innovation Index shows that even Swaziland outpaces us in some aspects of innovation.

We grumble about the inefficiencies of Government, and the fact that bribery and corruption is now the major constraint in doing business in this country.  In 2008, crime was still the reason for difficult business conditions in this country.

Now that Mangaung 2012 looms ahead of us, it is interesting to see politicians jockey for positions while denying that they do not have any ambition to become the next president of the country.  Also interesting to see how radio presenters and people calling into talk shows bemoan the low quality of political leadership in this country.  Even those who sternly voted for their party a few years ago, now threaten to vote along other lines.  It reminds one of the old regime where those who complained about the Nats voted for them election after election.

It seems that we vote so that we have reasons to debate between elections.

This phenomenon is not unique to the political landscape in our country.  It is also part of our business landscape for the last 28 years. 

1)    Some business people (from supervisory level to those in the C-suites) spend more than half of a work day sitting in meetings debating points that have been on agendas for months.  At one company, a record has been set with a point in the minutes of a meeting that was flagged as “in progress” for six years.  Each week, the point is simply moved on to be discussed next week.

2)    At some company a decision to replace double-ply toilet paper with single ply needed to be debated and took six months to implement.

3)    A complaint about bad service that is received from an important customer needs to be debated;

4)    Competitors that launch a new product that the others do not have needs to be debated.

Important decisions requires debating – and rightly so.  The question, however, is when does all the debate stop and when does the action and willingness to do something actually starts?  Limiting the time we debate things does not mean that leaders become Draconian.  One cannot make a decision without having all the facts.  But to hear the same arguments stated in different words by different people does not add any value to a debate.

Facts often lack when such debates take place, or the facts are economical and tailored to suit a specific position.  Too many examples exist where “facts” are thrown about in boardrooms without any real decision or action being taken.

The political debate and the business debate could sometimes be described as a schoolyard spitting contest.  While Rome is burning we decide whether we should decide to debate the heat of the fire.

This is the official blog of Skopus Business Consultants.  Visit us at www.skopus.co.za

The Skopus Prize is a trademark and intellectual property of Skopus Business Consultants.

More details about the Skopus Entrepreneurship Prise can be found at www.skopus.co.za