I so enjoyed keynoting the Capital City African American Chamber of Commerce (CCAACC) 30th Anniversary Gala in Austin, TX.
I was pleased to join 250 of Austin’s finest entreprenuers in celebrating 30 yeas of excellence, and honoring the evening’s award winners. I am sharing the full text of my remarks here:
COMMENTS BY BRIAN TIPPENS – delivered February 9, 2012 at the Capital City African American Chamber of Commerce (CCAACC) 30th Anniversary Gala.
It is truly an honor to be here to celebrate alongside our distinguished guests: Pastor Clarke and Representative Dukes, the Chamber’s original founders, our award honorees, and everyone in attendance tonight.
I consider it a privilege to be able to join you all in celebrating 30 years of supporting and empowering African American owned businesses here in the Capital of Texas.
Can you remember what you were doing thirty years ago ? What was happening 30 years ago ?
In the year 1982
• The Commodore 64 home computer was introduced
• The movie “Chariots of Fire” won the Best Picture Awards at the 54th Academy Awards Ceremony
• War broke out as Argentina invaded and Occupied the Falkland Islands
• Author Alice Walker’s groundbreaking book “The Color Purple” was released to critical acclaim
• Congress extended the 1965 voting rights Act for another 25 years
• Bryant Gumble became the first African American anchor on a major Network
• The movie E.T. the Extra Terrestrial was to the top grossing film of the year.
• Comedian Eddie Murphy makes his film debut in the movie 48 hours alongside Nick Nolte
• And one that I will TRULY never forget – Michael Jackson releases Thriller, the biggest selling album of all time.
Tonight we look back on 1982 for an entirely different and very important reason. This was the year that the Capital City African American Chamber of Commerce was incorporated.
This was the year that a set of founders came together with an initial goal of bringing awareness of the enormous amount of dollars that were being generated from black consumers in the form of travel & tourism and transfer those benefits to the black community as a whole.
Their goal was to leverage this information and encourage Black travelers to spend those dollars in Austin and be recognized as an important factor to the Travel Trade Industry. The dollars generated by Black travelers would provide economic prosperity for black businesses and the communities of Austin.
Over the years, that mission has grown and broadened as the organization has expanded and flourished.
For thirty years the Chamber has focused on building bridges to promote the economic development for its members and supporters in the city of Austin.
As the Chamber has adapted and changed over the past thirty years, so has the state of African American business – in Austin, in the region, throughout Texas and throughout the nation.
Through periods of economic prosperity and economic crisis, we have all worked to grow our own businesses while at the same time looking forward to increases in the total numbers of successful African American-owned businesses.
The latest data available from the Census Bureau tells us that Black-owned firms grew faster — both in number and sales — than U.S. firms did as a whole over a five-year period. Nationally The number of black-owned businesses increased 60% between 2002 and 2007, more than three times the growth seen among all firms.
Despite that growth, black-owned businesses in 2007 make up just 7% of U.S. businesses. this despite the fact that African-Americans comprise about 13% of the population.
Here at home – I am told that the City of Austin reports that there are just under 1000 businesses certified in the city. Of those, only 90 are African American-owned businesses.
Despite these challenges I believe most would agree that the African American business community has advanced significantly over the past thirty years and – as evidenced by all of you here this evening – the community continues to grow even stonger.
Now, tonight’s celebration of 30 year gives us pause to consider : “What will it take for us to grow our business over the next 30 years and to grow the number of African American businesses ?”
How will we as MBEs, Minority Business Enterprises, adapt to face the challenges of the current global economic environment and ensure our businesses will be successful ?
My initial thought : as my boss, Nick Gunn at HP likes to say “What got us to here, won’t get us to there…”. The skills and areas of focus that helped to bring us to this point are not necessarily the skills and areas of focus that will drive future growth.
I will offer that, while there is no blueprint for business success for MBEs – or for any business enterprise, for that matter – there are certainly a few rules that we should all be keeping in mind as we plan for the future of our businesses.
Would you like to hear those rules ?
Three rules – three principles that I hope you will all embrace:
Number one : FOCUS on the business fundamentals
Whether we have been in business 30 days or 30 months or 30 years, we must never loose focus on the fundamentals of our business.
Though a skyscraper may reach high up into the clouds and present magnificent views from its top floors – it must still be built on a solid foundation. The FOUNDATION CANNOT be disregarded – it requires constant care and maintenance. So too must we be focused on the fundamentals and foundations of our businesses.
I speak from the perspective of someone who helps to look after tens of billions of dollars in corporate supply chain spend, and When I say focus I mean “FOCUS” F – O – C – U – S.
I mean paying attention to the “F” – our Financials
We simply must have our financial houses in order. Corporations are VERY risk averse and look to transfer risk wherever possible. Many corporations practice periodic supply base risk reviews and eliminate from their rolls of suppliers those which represent an inordinate amount of risk. For a small business this can mean that even if you’ve got your foot in the door with a company and you’re years into an engagement, you still stand to lose that business if a periodic review of your credit/risk profile shows that you’re in a yellow or red zone.
“O” – our Organizational structure:
This is about selecting the entity form – be it Sole proprietorship; partnership; corporation; etc., which allows you to properly allocate risks and rewards, while at the same time keeping in mind the risk balancing requirements of our customers.
“C” – our Certifications :
We know that corporations routinely set subcontracting goals around spend with businesses certified by any of a number of certifying organizations, for Example: National Minority Supplier Development Council. As an aside let me note that I am incredibly pleased to see that Karen Box, the President of the Southwest Minority Supplier Development Council (SMSDC) is being honored here tonight. The SMSDC does great work to empower minority business and they are a great partner to the Chamber.
African American owned businesses should have a strategy around the certifications for which they may qualify, and an understanding of which certifications are valued by their target customers.
“U” – our Unique Selling Proposition :
We must continue to hone and be able to articulate, in a very crisp and clear way, what differentiates us from our competitors. Our USP should be focused around innovation, partnership and agility.
Finally our “S” – Our Strategy, our Strategic Plan:
The message is, quite simply, “have a plan”. Many corporations are actively transitioning from spot in time commodity type supplier relationships, to true strategic partnerships that span several years. Beyond grading on “traditional” sourcing grading criteria such as price, quality, and assurance of supply – a corporate buyer will want to know where are you are going, that you have a vision and plan, and that you can add long term strategic value.
Surviving and indeed thriving in the next thirty years will require F.O.C.U.S.
My second piece of advice to all of you, as you consider to how to grow your business and overcome the challenges of today’s business environment:
Adopt in your business an unwavering commitment to creating a unforgettable customer experience.
Today, we truly live and operate in an experience economy. In the coming years one factor that will separate the business “winners” from the business “non-winners” is the ability to create an experience that draws customers, again and again, to our products and services.
We used to associate commoditization only with products, but now, services too are being commoditized; dry cleaners, oil change shops, fast food restaurants compete primarily on price. To escape commoditization, industries today are elevating their offerings to a new level and that new, differentiated level has an economic value associated with it.
To demonstrate that, I’d ask you “what is a cup of coffee worth?”
Companies harvest or trade coffee = $1 or so per pound…a few cents per cup. These coffee beans are a commodity.
The manufacturer grinds, packages and sells the beans for $.05 to $.25 per cup. Now these beans are a good
Brew the beans and sell them at a family diner or coffee shop for $.50 to $$1.00 a cup. Now these beans are a service
BUT – if you brew and serve the beans at an espresso bar where the ordering, creation and consumption of this cup of coffee embodies a heightened ambiance or sense of theater. Where you can sit on a comfortable couch, work on your laptop and listen to latest tunes playing softly in the background…can you see where I am going with this ?
Now this cup of coffee is worth $2.00 – $5.00, or more per cup !
These beans have now become an experience with many, many customers more than willing to pay for that experience.
Of course, you can all recognize that I am referring to Starbucks. The Starbucks example is very extreme example – but it is an indication that we must spend time with our customers and actively listen to them. What is it that they “really” need ?
In the past 30 years we were, all of us, driven by the desire to create consistent CUSTOMER SATISFACTION. But this is no longer good enough – we want more than customer satisfaction – we want to move from satisfaction – to :
CUSTOMER LOYALTY – which delivers on a customer’s emotional and social needs
Then, from customer loyalty on to CUSTOMER ADVOCACY – the point where our loyal customers become vocal champions and promote our product or service to others.
My third and final piece of advice : Build an environment in your businesses that embraces and encourages innovation.
Now – what exactly is it that we mean when we say innovation ? What exactly does that mean to us as African American business owners.
There are MANY different types of innovation. Consult your reference tool of choice and I guarantee you that it will provide you with multiple flavors of innovation definitions, and many different methodologies for innovating.
I personally believe that all entrepreneurs should be aware of, and employ three types of innovation:
Incremental Innovation: Incremental innovation seeks to improve the systems that already exist, making them better, faster cheaper. We do this in our business today, correct ?
Most innovation is incremental. This is the form of innovation with which we are all most familiar.
An example : the Apple iPhone 4 contained incremental innovations over the iPhone 3. Slight improvements such as a front facing camera and longer battery life were incremental improvements over the previously existing technology. That iPhone 3 had incremental improvement over the previous models.
Any of you who are parents understand incremental innovation – it is the reason why we had to buy our teen the Play Station 3 in what felt like just a few months after buying the Playstation two
Next is Disruptive Innovation : innovations that improve a product or service in ways that the market does not expect, typically first by designing for a different set of consumers in the new market and later by lowering prices in the existing market.
An example of disruptive innovation is digital media like mp3 music and digital video files. The year 1982 – in addition to being the year that CCAACC was founded, was also the year that Sony developed the world’s first Compact Disc or CD.
For over two decades, CD and DVD sales fueled an expansion of brick and mortar outlets like Blockbuster, Hollywood Video, Tower Records, and a long list of other outlets.
Today, however, very few people ever purchase or use CD’s and Apple is now the world’s largest music distributor through their itunes online music store. Digital Media has been so truly disruptive that it has displaced existing markets and created a new paradigm.
BUTlet’s focus on the third type of innovation.
I propose to you this evening that we as entrepreneurs, to best position ourselves for the next thirty years, must embrace a spirit of Heretical Innovation – a term coined by author Andrew Winston.
Beyond incremental or disruptive innovation – Heretical Innovation involves asking the really difficult questions, challenging the status quo, questioning business models and coming up with new models that may seem counter-intuitive. It means not being afraid to be a business heretic.
An example : XEROX. This company built its image on being The Document Company, and encouraging its customers to spend money on copiers, printers, paper, and ink. Indeed, for most of the history of XEROX, the company’s success was reliant on their customers’ need to print more.
Today XEROX is helping companies to use fewer printers, less paper and less ink. to move away from printing to digital document imaging.
This is seemingly heretical but it is the way companies need to innovate; they need to innovate their service model, innovate the kind of products they sell
Another example is Waste Management – a company with a business model that previously relied on hauling an ever-increasing amount of customer generated waste into landfills. The company has evolved its business model – beyond disruptive innovation – to the point where they are working to help customers generate less waste.
That is true heresy ! Now instead of paying to dump garbage, customers may get paid for valuable material, while the other stream of waste will create a potentially significant source of clean energy.
We must all adopt a drive towards heretical innovation in our own business strategies. We must be unafraid to ask the really difficult questions, to think FAR outside the box and adopt strategies that may at first seem counter-intuitive.
This is the type of mindset that we must adopt. What got us to here, won’t get us to there.
While there are no short-cuts, secrets, or failure proof plans, I hope that you will consider these tips:
- Adopt a laser FOCUS on the fundamentals of your business
- Commit to an unforgettable customer experience while moving from customer satisfaction, to customer loyalty, to customer advocacy; and
- Incorporate a spirit of Heretical innovation in your businesses where you and your employees are free to ask the tough questions and adopt new innovative business strategies.
And so again I say thank you.
Thank you to Natalie Madeira Cofield and her team at the Capital City African American Chamber of Commerce. The work they do to provide capacity building, support and advocacy to Austin’s African American Business Community is outstanding and will be key to our collective future success.
I am humbled by the CCAACC founders in attendance tonight. Your great vision has clearly manifested itself in a way that I doubt that even you imagined when you embarked on this journey thirty years ago. You are truly to be commended.
I applaud tonight’s award recipients. Your achievements are notable ones, and the work that you do is worthy of great recognition. Spotlighting achievements such as yours helps to provide motivation to us all and prompts us to continue raise the bar on our own performance.
Finally I thank each and every one of you in attendance. Your commitment to your own personal business success, to the success of the CCAACC and your unwavering commitment to the success of African American entrepreneurship, not only here in Austin but across the nation – will help to ensure that we will be here again – perhaps in this SAME hotel ball room in the Austin Omni hotel– celebrating our success and impact 10 years , 20 years , 30 years into the future and beyond.
So I say to all of you. Remember that what got us to here won’t get us to there. Continue to grow, to adapt, to persevere and innovate…and if you do, I am certain that I will see you all here for the chamber’s 60 year celebration in the year 2042.