In the realm of business, there exists a simple but profound equation: People + Product + Process = System. In Swahili, the term for "system" is "mfumo." However, to truly understand the significance of this equation and its implications for businesses, we must delve deeper into the core elements of People, Product, Process, and introduce Distribution as a critical component. This equation, which we'll refer to as PPPD, serves as the cornerstone for building long-lasting and sustainable businesses.
In the world of commerce, a business is akin to a living entity. It requires a robust circulatory system, a system of financial flow, to thrive and prosper. To illustrate the power of PPPD, let us examine some renowned companies that have not only survived but thrived for generations. Names like IBM, Coca-Cola, Ford, Nestlé, Pepsi, General Electric, Procter & Gamble, and Bacardi have endured the test of time, with histories spanning well over a century. Remarkably, many of the visionary founders of these companies have long since passed away, yet their creations continue to thrive, grow, and expand with each passing year.
In contrast, consider the entrepreneurial landscape in Africa and other part of the developing countries, where startups often face grim prospects. Many businesses in the region seem to wither away within their first year of existence, while others barely scrape by for a mere three years before succumbing to adversity. This begs the question: Why is it so challenging for African companies to establish a legacy of longevity? What is the underlying issue?
The rarity of large, multi-generational companies in Africa is a stark reality. In the event that the founder retires or passes away, such companies tend to gradually decline until they vanish altogether. So, why is it that we seldom encounter African companies that have endured for generations like their global counterparts?
The answer lies in the fundamental equation of PPPD: People + Product + Process + Distribution = System. To truly comprehend how to construct a robust system, we must delve into the story of two friends, Joshua and Jacob, who embarked on a journey to solve a critical problem in their village. This story will serve as a vivid illustration of the importance of each component of PPPD and the role of Distribution in shaping the destiny of a business.
To comprehend how to build a successful SYSTEM = PEOPLE + PRODUCT + PROCESS + DISTRIBUTION, let's delve into a story that illustrates these principles.
The Tale of Joshua and Jacob
In a certain village, two friends named Joshua and Jacob lived. They were both without work, but their village faced a significant water challenge. The only water source was located in the distant hills, far from the village. Recognizing a substantial business opportunity, Joshua and Jacob decided to take matters into their own hands. They began fetching water from the hills and selling it in their village. This venture became their source of income, their means of livelihood.
Each of them could only carry five buckets of water per day due to the distance. They managed to earn enough to cover their daily expenses. One day, Joshua posed a question to Jacob, "I understand that this business is profitable for us, but for how long can we continue fetching water ourselves? What if we fall ill and can't fetch water one day? How will we survive?"
Jacob replied, "I'll hire workers to help us. I'll provide them with buckets, and I'll pay them a daily wage for fetching water."
Joshua raised another concern, "But how will you ensure that your workers are fetching the right amount of water and collecting the correct payment?"
Jacob confidently responded, "I'll keep a close eye on them. I'll be there with them every step of the way. No one will deceive me."
Joshua had a different vision. He said, "I want to create a water distribution system. I'll dig a canal from the hills and lay pipes all the way to the village. This might take me five years, but it will be worth it."
Jacob chuckled and said, "That's unrealistic. I have no interest in such an endeavor."
After this conversation, Joshua and Jacob went their separate ways. Jacob hired five workers, while Joshua, in addition to fetching three buckets of water daily, began digging the canal. A year passed, and Joshua was still living modestly, struggling to make ends meet. Jacob, on the other hand, had a small fleet of trucks for transporting water from the hills and his workers. Joshua's life was a stark contrast.
Three years later, Joshua had completed the canal and started laying pipes to supply water throughout the village. When he opened the village's water tap, he called all the villagers and demonstrated how to access the water and pay for it. The price of water was significantly lower than what Jacob and his competitors were charging. Within a week, Joshua earned more income than Jacob and his competitors had in an entire year.
Within two years, Joshua had become the wealthiest person in the village. He employed others to manage the collection of payments and the distribution of water. Jacob couldn't compete with Joshua anymore. His health deteriorated, and he had to sell all his trucks. He accumulated substantial debts and, ultimately, his business collapsed.
Jacob died in poverty, while Joshua left a lasting legacy by not only transforming his village but also neighboring ones. His business continued to thrive, thanks to the well-thought-out system he had built.
The Moral of the Story
This tale of Joshua and Jacob highlights a critical lesson for entrepreneurs and business owners. While many of us are creative and innovative in our ventures, we often place greater emphasis on our products and services than on the system that drives our businesses. We may excel at sales, generate revenue, and pay our bills, but we rarely take the time to establish a robust business system.
The key question to ponder is this: Are you running your business, or is your business running you? The story of Joshua and Jacob serves as a stark reminder of the importance of developing a well-structured business system.
From the story of Joshua and Jacob, we can draw several valuable lessons:
The Importance of PPPD in Building Sustainable Businesses
Joshua's story serves as a powerful example of the significance of PPPD – People, Product, Process, and Distribution – in building sustainable businesses. Let's break down these components and explore how they contribute to long-term success.
Building Your Business System
Now that we understand the importance of PPPD in building sustainable businesses, how can you apply these principles to your own endeavors in Tanzania or anywhere else in the world? Here are some key steps to consider:
If you're ready to take your business to the next level and learn more about creating effective systems, consider joining EMASUITE BUSINESS SYSTEMS. Together with like-minded entrepreneurs and experts, you can explore innovative solutions and technologies to elevate your business. Visit www.app.ema.co.tz to get started on your journey to building a sustainable legacy.