Do you have the X-factors?

New research from the UCT Graduate School of Business (GSB) in South Africa has revealed seven X-factors that have helped South Africa's top financial services sector entrepreneurs achieve success.

The study, carried out by MBA student Brendan Poots in 2006 under the supervision of Senior Lecturer Jonathan Foster-Pedley of the UCT GSB, is the first to look at these tacit or hidden strategies used by successful South African financial services entrepreneurs.

Using a qualitative methodology, the research drew on information from these leading entrepreneurs, and several interrelated factors for success emerged:

Be flexible

The first was that these leaders allow for “Flexibility in Strategy” in building an entrepreneurial business and were adaptable to change. The research points out that the greater the degree of flexibility in strategy, the greater the level of creativity and innovation that can be promulgated.

Be self aware

The second was a high degree of “Self Awareness” and an attention to intuition. The thread that emerged from respondents showed a high level of self-awareness, acknowledging their own strengths and weaknesses. Subsequently, they have all been strategic in partnering with others who complement their own skills, offering the opportunity for creative synergy.

Think and reflect

Linked to this, the research also showed that these leaders placed an emphasis on “Reflection”, taking time out for thinking, assessing, and planning. This led to a better understanding of themselves, as well as the situations in which they found themselves. It also helped them to be more flexible and deal with competing demands.

Manage the paradoxes

The fourth factor was a high level of “Polarity Management”. This is being able to manage the paradoxes that surface in modern business. The study highlights that not everything can be resolved with “either/or thinking”… To compete successfully and secure competitive advantage a leader needs to be able to find a balance between competing, yet interrelated demands. The successful use of polarity management was a common theme and allowed these leaders to be flexible and to embrace opportunities that ‘either/or' thinking would not allow.

Nurture diversity

The fifth element is that these leaders “Embrace and Encourage Diversity”. The study indicates that different thoughts, cultures, attitudes, opinions, and voices increase the number of ideas and solutions. It, in turn, is a key driver of innovation and creativity.

Network

The value of “Linkages or Networks” is the sixth factor. The more people extend their networks, the more they are exposed to a greater number of ideas and solutions. The leaders researched all emphasised that linkages are vital – the more people they know, the greater the number of potential opportunities that can be accessed and harnessed. The leaders have all benefited from mentoring links as well, which has provided them with guidance and experience, and a sounding board for them in their turn, thus elevating their decision-making, prudence and performance.

Talk, listen, learn

The final quality for success is “Clarity of Connectivity and Rate of Information Flow”. The research shows that talking, listening, and learning is instrumental to building a team ethos where ideas continue to flow. Furthermore, that the greater the clarity of communication and rate of information flow within a business, the more likely the diversity within the business will be harnessed.

According to Foster-Pedley, who teaches strategy on the MBA program and short courses at the UCT GSB, the strategies revealed by the research will be of great value to leaders as new tools for entrepreneurial success.

“The requirements of an entrepreneurial leader in the 21st century are markedly different than their 20th century predecessors – traditional approaches to organising business have been made redundant owing to the dramatic increases in global competitiveness,” he said.

“Given the growing importance of entrepreneurship, not just to the development of emerging economies like South Africa, but on the global stage, there is therefore great practical value in being able to identify the traits required to be a successful entrepreneur and entrepreneurial leader. These X-Factors are essentially the catalysts for success.”

Foster-Pedley added that entrepreneurship and strong and trusted financial markets are integral to any country's economic growth. This is especially the case for developing nations such as South Africa, where stable financial markets are essential to attracting foreign direct investment.

“Studies such as the Global Entrepreneurship Monitor, conducted in South Africa by the UCT GSB, have shown that South Africa is lagging behind many other developing countries in levels of entrepreneurship. New research studies that reveal strategies for success will hopefully play a role in strengthening South Africa's young firms,” he said.