Executing with operational excellence: an African founder motto

Published 21 September 2022
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  • Bringing operational efficiency means being able to deliver delta 4 experiences i.e. supremely efficient solutions.
  • Common inefficiencies in Africa are around price, availability, information and time.
  • We define operational excellence as the ability to be rigorous, data-driven, biased to action, focus on delivering the best experience, clearly articulating expectations of what is a considered a ‘good standard’ and having clear information flow.

A lot of founders and eco-system thought leaders have gone before us and laid the foundations of start-up success principles. We have the lean methodologyagile product developmentdoing things that don’t scalecustomer obsession and making something what people want, among many others. These core principles have been spreading across the globe and for the most part, they work really well! Good ideas spread.

There are however other nuanced principles that are market/regional specific. Those context-specific realities that sometimes compete or sometimes even complement the current widely accepted start-up truths.

The African Tech ecosystem is currently uncovering a lot of truths and learnings about the principles that hold true in this market.

A key principle that we have seen being shared and applied by founders has been: operational excellence. To specific- the fact that operational excellence is a core driver of success for startups in the African market. And we dare say- not technological innovation. At least not in isolation.

African founders who focus on bringing operational efficiency in their market win.

How do we define efficiency?

We think it’s the ability to give a delta 4 experience.

What’s a delta 4 experience?

It’s a concept that Kunal Shah (an Indian entrepreneur and venture capitalist) uses to describe an experience where people interact with such great efficiency that they go screaming to other people that there is a better way to do things.

It’s the extreme version of building something people want (in a really good way). With the delta 4 experience, the customer gets such a huge ‘aha’ moment that they can’t believe they used to do things any other way. More than that, the customer gets irritated when other people do things the inefficient way i.e. before using your product. Thus they SCREAM at others.

A good example is how people in Kenya can scream at you for not using mobile money. You realise that very quickly when you arrive as visitor in Kenya and the first thing you sought to get is a sim card and mobile money registration. Mobile money is a delta 4 experience.

You can watch him explain the concept in a very clear and funny way here:

There are many delta 4 experiences for African startups to create because there are many point of inefficiencies to cover.

Some of examples of common inefficiencies we face include:

  • Price inefficiency- products and services are unaffordable
  • Availability inefficiency- specific products and services (or specific combinations of products and services) are not available
  • Information inefficiency- there is no documented and aggregated information that can be searched and/or consumed
  • Time inefficiency- it’s take too long to get the thing!

Often, these inefficiencies can be solved by innovating with operational excellence. This would entail creating and mapping processes that are needed to deliver a good and service. After having a clear view of the existing processes, the startup’s early activities then become focused on discovering pain points and then ensuring those pain points are completely solved for in a timely manner.

This what we call operational excellence.

It is:

  • Rigorous – assumptions are constantly tested.
  • Data-driven – decisions are made based on evidence collected or market insights that come from deep practical experience. Decisions aren’t based on arbitrary judgement.
  • Bias to action – there is a tendency to do something in order to learn as opposed to “waiting and seeing” or “waiting and analysing”.
  • Focused on delivering the best experience – you actively listen to your customer, with the wisdom to deeply understand their problem while also taking in their suggestions with a pinch of salt. (okay…maybe sometimes a spoon even)
  • Timing and speed- faster is not always better but it often helps to get something sooner than later.
  • Clearly articulated expectations of what is a considered a ‘good standard’- this can be written or informally agreed expectations. A bad standard can easily be identified and corrected by anyone in the team.
  • Clear information flow- transparency to customers and employees is encouraged. Everyone understands why it’s important to do things in the way that they are done.

African startups that focus on operational excellence are in a better position to provide delta 4 experiences.

Technology’s role then becomes to support, instil and drive operational excellence.

For instance, one of our founders, Adewale Opaleye from Alerzo, noticed that informal retailers experienced a time, price and information inefficiency. He realised that shop owners would spend a lot of time sourcing for stock and this search process also meant that it was difficult to compare and secure the best prices.

Alerzo’s focus was then to deliver affordable products at the retailers doorstep. Operationally, this meant mapping out the existing sourcing process and then ensuring that by being an intermediary, Alerzo would save their customer some time and money while empowering them with information. In practice, this meant focusing on fixing logistics issues and negotiating good prices with suppliers.

Technology played a crucial role in bringing efficiency to existing logistics issues that Alerzo faced. The customer-facing tech then primarily become a tool where customers could get aggregated information on the options available to them. By interacting with the app, customers would also become aware of the cost savings that they were making.

Note that the technology Alerzo built was focused on supporting operations that would deliver value to the customer. The technology wasn’t the full product.

In the African market, you can’t get away with providing technology for technology’s sake. Digital adoption is still in early stages so people are still quite hesitant to download any app. You can’t get away with just providing customers a technology product that they want. The transaction costs are high.

To acquire and fully retain the customer, you have to justify the data bundles/airtime that your solution will cost, the time taken to learn using the tech and the memory space that the app will consume.