Advisory Column: What small businesses can learn from GraceKennedy
I am constantly reminded of the power and value of brand equity each time I conduct an entrepreneurship training workshop and ask the question: When I say successful brands, which companies readily come to mind?
GraceKennedy (GK) is almost always among the companies mentioned.
Brand equity refers to a brand's power that is derived from the goodwill and name recognition it has earned over time, which translates into higher sales volume and higher profit margins against competing brands, according to businessdictionary.com.
Brand equity aside, there are many lessons small businesses may want to learn from this 93-year-old company that remains very profitable, thrives in tough times, has capitalised on brand Jamaica, and is making major advances in lucrative export markets.
When he was contacted, GraceKennedy's Group CEO, Don Wehby, was very willing to share the keys to GraceKennedy's success and offer advice to small businesses and entrepreneurs. Below are some of the key lessons:
1. Start with a clear vision and values
and faithfully reinvest
in the community.
Small businesses are often too focused on day-to-day survival and not enough on a long-term vision and strategy. Wehby believes that GraceKennedy's success is a result of three main factors:
i. Having a clear vision and mission for the Group, using them as a clear guide and communicating them to all stakeholders.
ii. Having honesty, integrity and trust as its core values and establishing them as a culture in doing business and the standard to which they hold themselves accountable.
iii. Playing an active role in the communities they operate and supporting education and sports in a significant way.
2. Be prepared to evolve and even change your core
Just because you started in one type of business doesn't mean you have to stay that way forever. Dr John J. Grace and Fred William Kennedy started the company in February 1922 as small traders and wharf operators. Over the years, the company expanded into many areas - from car dealerships to hardware stores, supermarkets, manufacturing, insurance and more.
"Our founders and the management teams over the years have adopted the philosophy that 'what is good for Jamaica is good for GraceKennedy' and, as such, we have adapted our products and services to serve the ever-changing needs of our consumers and customers over the years," said Wehby.
"We have also sought to be a much more focused group, and while in the past, GraceKennedy played in many industries such as catering, car dealerships and even the airline industry, we have made the decision that our core competencies are in food manufacturing and distribution internationally, and financial services regionally."
as a strategy.
Wehby emphasised that diversification is a critical component of GraceKennedy's growth strategy. The company has made it a goal not to rely solely on Jamaica, or any single economy for that matter, but instead seeks to earn at least 50 per cent of profits from outside Jamaica.
"The local or regional business atmosphere has been a challenging one for GraceKennedy over the past decade. A devaluing Jamaican dollar, low to no growth and a fiscal deficit have caused us to find creative ways of remaining viable as a nation. In terms of the positives, the Jamaican society continues to show resilience and the economic environment continues to foster the entrepreneurial spirit of Jamaicans as we seek to find new ways of sustaining ourselves despite the social and economic issues facing us," said the GK CEO.
"As we strive to become a global consumer group, with 15 per cent of revenue from each of three different continents and 50 per cent of profits outside of Jamaica, we have sought to diversify our revenue streams and have found this and other methods to mitigate against some of the risks facing Jamaica, and to reduce reliance on any one economy," he noted.
4. Never stop
building your brand.
Small businesses need to consistently evaluate the strength and relevance of their brand. A strong and well-respected brand opens many doors and opportunities for a business. Wehby revealed that not only does GraceKennedy spend heavily, but is also relentless in its effort to remain relevant in the eyes of its customers, stakeholders and the public at large.
"We have sought to remain relevant over the years by investing in products and services to support our consumers and customers at their point of need," he said.
hard times and
practice risk management.
Every successful business will face risks and challenges. It is unavoidable. GraceKennedy's strategy is planning ahead, being proactive and remaining open to ideas rather than becoming complacent.
"On more than one occasion, we have faced hard times at our individual companies, but we have found that at those times, we reap the benefit of diversification of revenue streams and have found ways of pulling together as a group to overcome these challenges. In hard times, we have found it extremely useful to be as transparent as possible, communicating with our shareholders, our consumers and our staff. The strategies that we have used have, more often than not, come directly from those very stakeholders, who have supported us despite the challenges," said Wehby.
"In 2009, GraceKennedy faced one of its largest challenges as a group. However, as a group, we returned to the basics and analysed our business from the bottom up. As a group, we pulled through and what we now have is a company with much more robust risk-management skills."
n Yaneek Page is an entrepreneur and trainer in entrepreneurship and workforce innovation.