Breaking the Rules

Once again after the elections there has been wide reporting that job creation is a huge priority in South Africa, but there is also the reluctant admission that assisting small businesses and entrepreneurs may be the route to success. I love entrepreneurs in all forms, and I’d like to share with you some of my favourite stories that may give you the courage to try something different.

Izzy Etkin is one of my all-time favourite business leaders, and I would put him up there on my list with Richard Branson. You may not have heard of him, but for a big part of his life before he retired he was the GM of Sabena Airlines in SA. Izzy describes himself as a “simple businessman”, but in the snobby world of airline companies, he was truly an innovative entrepreneur.

They knew that when they employed him at Sabena, because his first instruction from his seniors in Europe was “Don’t fire anyone!” Nevertheless, as the company grew under his leadership, some of the older employees who were so deeply entrenched in traditional airline thinking found it appropriate to resign anyway.

He introduced many world firsts in the global airline industry right here in SA. For example, for the first time ever in the world, Sabena created a “Code-Share” agreement between them and Nationwide Airlines. Of course, SAA hated him for this and immediately introduced strategies to terminate this arrangement. (They eventually succeeded, but only decades later. )

In another stroke of genius, Izzy the entrepreneur wanted people to pay full fares for flights, and to upgrade to business- and first-class. For him this was easy: give all of these passengers the choice of a number of TVs or kitchen appliances for free. Some of the regular travellers eventually complained that they now had five TVs and three fridges at home, and were running out of space!

Another pioneering project now widely imitated by just about all airlines all over the world was to auction off tickets to travel agents. This may sound like a sure way to bankruptcy, but in reality the thinking was quite simple. Sabena had two flights a day to and from SA, and there were certain unpopular travelling times in the year, flying only 60% full. Izzy got travel agents on his side by offering up these empty seats to the agents to sell – and make some extra money in the process. In less than 100 minutes, they sold tickets in excess of R10m in value.

But it is Izzy’s relentless focus on customers that made him a legend. He was never in the office, but was always at the airport with his passengers and front-line staff, greeting, comforting, and making sure they were happy. This is where he made some legendary decisions.

On one occasion, a rather large Belgian passenger with lots of extra baggage was asked to pay extra for the 15kg excess. But, she argued, when she flew to SA she was 15kg heavier, but had gone to a spa and had lost all that weight. Now they were asking here to pay for exactly the same weight in excess baggage? Izzy waived the fee.

On another occasion, a young South African student who had completed his studies overseas had to pay extra fees for 50kg of his books. Everyone boarded the flight, but just before take-off the traveller sitting right next to him – a prisoner in transit – swallowed poison and died right there in the seat. There was a big delay until they managed to take the dead guy off, (not to mention the psychological trauma to the young graduate.) So when his mom wrote to them and asked for a refund – since the heavier-than-50 kg prisoner was taken off – Izzy gave it to her.

In all humility, Izzy also tells people that he has made his fair share of mistakes. He relishes a particular story. Sabena decided to book a prominent billboard on a main road in Johannesburg for an advert. The wording said “Sabena will get you there faster.” So what’s the problem with that, you may ask. Unfortunately, the billboard was located outside a graveyard. The media – and his competitors – had a field day with that.

John Hunt and Reg Lascaris have been prominent in the advertising industry for decades now, running Hunt Lascaris TBWA. But when the company was really small and unknown, they hit on a wonderful way to get free extra publicity. Since they travelled a lot by air to visit clients, they would check into their flight, but not board until their names were announced a few times. Thus there were hundreds of passengers who would hear, “Will Mr. Hunt and Mr. Lascaris please board at get 6 immediately.” Talk about brand name recognition!

Dragon’s Den billionaire and entrepreneur James Caan was also in South Africa recently, and told many stories about his success. In 1987 he founded Alexander Mann, a recruiting firm,(although there is neither an “Alexander” nor a “Mann.”) He chose that name because, as he put it, it would have been stupid to telephone a CEO of a large firm and say, “Hi, I’m James Caan CEO of James Caan and Associates.” They would immediately know he was a small player. Image and confidence was everything.

But in this company he recognised a gap in the market for a head-hunting firm that didn’t focus on senior positions. Instead, he asked his clients to give him openings in their firms at a middle management level, and he would then go out and recruit middle managers from other companies who felt incredibly honoured to be “head-hunted” even though they were relatively junior. His first office was in prestigious area Pall Mall, but, he says, his office was so small that they couldn’t actually open the door because his desk was in the way. He would often ask people to meet him for coffee at London’s top hotels, like The Claridges, or arrive at their offices in an old gold Rolls Royce that he had picked up at bargain prices.

Entrepreneurs know they have to break the rules – but they also know that it’s essential for their success as well as for their customers.

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