RabkinIT NEVER ceases to amaze me that two reasonable people can look at the same piece of data and view it in two entirely different ways.
A large beachfront hotelier sees tourist arrivals rising and is delighted, while a small eco-tourism lodge takes that same fact as a sign of impending disaster.
Consciously or not, we all attach our own agendas and interpretations to every new fact we encounter.
As complex as the phenomenon of differing interpretations can be, it pales next to the confusion created by data-free conversations.
Through my work on the Jamaica Cluster Competitiveness Project (JCCP), I have occasion to meet firms from many industries, in many parts of the island. Most of the managers are committed and passionate about their work. Few, however, have taken the trouble to survey their customers or study their
competitors.
Not a week goes by without an entrepreneur passionately describing Jamaica's pre-eminence in the world in one or more new industries.
I have been told that Jamaica's peppers, ginger, ackee, sea island cotton, tomatoes, goats, paprika, and oranges are well known as the finest on earth.
I have heard that Jamaica has the richest soil, the greenest hills, the most extensive biodiversity, and the best habitat for birdwatching.
It has even been noted that Jamaica is responsible for virtually every musical art form invented in the 20th century (with the notable exception of country and western).
I love this island and I am an eternal optimist. But I am also a social scientist and I want the facts.
My colleagues and I have worked in many places and we almost always observe over-confidence.
Companies in the Dominican Republic shove fresh mangoes in my hands, while Palestinians give me bottles of olive oil.
I once had a full shelf of coffee from Ivory Coast, right above another filled with videos made in Egypt. They all claim their products are the best in the world, but since I am given the same products in different countries they can't all be right.
The first two things I do when I begin work with a new firm or cluster of firms is help them survey their customers and benchmark their performance against international standards. Invariably, the majority of firms have a poor understanding of what their customers want and an even poorer understanding of how they stack up against international competition. Ironically, few firms begin by asking for help in understanding their customers or their competitors. Instead, most look for financing or Government assistance.
Since their starting position is that their products are high quality, they falsely believe that success is just a favour or lucky break away.
Unfortunately, financing such companies is throwing good money after bad and subsidising them with tax benefits or other special treatment degrades the competitive environment for everyone.
SO WHAT TO DO?
A trait common to entrepreneurs is their solid instinct. While they may not have the latest market research techniques, they have a flair for innovation. This "gut feel" carries some firms quite far. The market, however, is far more complex than any one human being's intellect. As companies grow if they wish to continue to grow they become fanatical about understanding and serving their customers' needs. Those that do not, begin to complain. They complain that, despite their fine products and excellent service, the customers are no longer coming, or are coming but demanding a lower price.
Unchecked globalisation, onerous tax schemes, poor incentive structures, and high interest rates are hurting them. In fact, these companies are often right.
Once we've met their customers and competitors, though, something much more troubling becomes clear their products and services are not worth a premium in the international market. Even if we were to fix all of the environmental factors, most of these firms would not be able to compete.
I am open to the interpretation that Jamaica is the best in the world at any number of things, and I have certainly sampled some wonderful local products and services. But until I see survey results, I will not believe in the authenticity of customer demand. Until I see competitor profiles, I will not believe that Jamaica has competitive advantage; and until I see cost-benefit analyses, I will not believe that the profit potential is real.
The essence of business strategy is informed choice and timely action. In workshops, meetings and hallway conversations, I can practically taste the enthusiasm for the latter. The former, in my opinion, is lacking. The JCCP has begun to work closely with clusters of agribusiness firms.
While we have many initiatives on the table, two of the first things we are doing are a detailed survey of customers around the world, and a hard analysis of Jamaica's global competition. The days of data free action must end. As a resident of this island and an admirer of things Jamaican, I want to believe in the transcendence of the local offering. As a businessman, I want the numbers. As investors in the country's future, so should you.
David Rabkin is project director of the Jamaica Cluster Competitiveness Project, sponsored by the Jamaica Exporters Association. He is a Vice-President in the Boston-based advisory firm, ontheFRONTIER. He can be reached at: drabkin@onthefrontier.com
