In ‘Overlanding Through the Boardroom’, Johan de Villiers turns bush lessons into business ones. In this edited excerpt from the book’s eighth chapter, he drives a Land Rover into a flooding Okavango marsh on the strength of a map that was telling him the truth, reverses 1,500m out of it using his side mirrors, and argues that most companies are reading their turnover the same way he was reading that map.
The shortcut
Third Bridge, Moremi Game Reserve, March 2018. Kim and I were partway through three weeks across Namibia, Botswana, Zambia and Zimbabwe, and we had spent the previous day doing nothing whatsoever, which is a thing you have to plan for or it never happens.
The next morning we were heading for the floodplains of the Khwai River, several hours away and worth every one of them. Kim took the wheel.
We switched on the GPS, opened Tracks4Africa and looked at two options: the long way round, or a jeep track cut through a stretch of pampas grass that would save us most of the afternoon. We took the short one.
The Landy had the clearance, the paper map showed the track, and we were going to be at Khwai before nightfall.
You need to understand where the water in that place comes from, because we did not. The Okavango is a delta that never reaches the sea.
It sits inside the Kalahari and stays green all year on rain that falls somewhere else entirely, 1,100km away in Angola’s Planalto highlands. That water runs down through the Caprivi Strip, crosses the desert and arrives around April or May, then sustains the delta for three or four months, which is precisely when Botswana is at its driest.
A flood delivered on schedule by a sky two countries away.
In 2018 it came early.
The rains had just ended and the road was muddy, then muddier. Then the road stopped being a road and became marsh.
We checked. The signs still pointed the way we were going. Tracks4Africa still had us on the line.
So we carried on, the way you do when the evidence is on your side.
The bow wave
The water came up to the tyres, and then to the doors, and then it started coming in under them. When we entered the marsh it had been 10cm deep. Twenty minutes later it was 1.5m.
We had no idea it had happened. That is the part worth sitting with. A vehicle moving through shallow water pushes a wave out in front of it, and that wave is all you can see. It is big, it is loud, it is right in front of the bonnet, and it tells you absolutely nothing about what is underneath you.
By then the Landy had views of her own. “I am a boat now,” she said. “You should know I am a very poor boat.”
The arithmetic was not encouraging. We did not know how high the water would go.
This was not a tide that would drop that afternoon, or that month; it takes at least three months to go out. There was no signal, and nobody else was coming down that track before the season turned.
Swimming was out, because of the crocodiles. And the roof, our only dry ground if she went under, was a place we would starve on long before the water fell.
Turning around was not an option either. The pampas grass on both sides stood 2m high and was waterlogged, with no tree anywhere for a winch. The only way out was back down the submerged track we had come in on, in reverse, and we had one attempt at it.
We swapped seats without opening a door. Kim is smaller, so she went over the fridge and the camping gear into the passenger seat while I took the wheel.
The loaded rear made the rear-view mirror useless, so I reversed on the side mirrors alone, holding a steady 25km/h, keeping the buried track under the tyres because it was the only firm thing left.
About 1,500m later we found ground that held. We looked at each other, turned the Landy around, and took the long way to Khwai.
Here is the part I have to own. I did not ignore a warning. There wasn’t one.
The signs were right, the map was right, and the app was right, because the track was exactly where it had always been. Everything I looked at agreed with me and I treated that agreement as proof. It wasn’t.
Three sources were describing a dry season that had not arrived yet.
Four boxes and a line
Everything a business sells sorts into four boxes, and the business portfolio matrix is where you put them.
Core is what you are known for. It pays the bills and rarely makes anybody rich.
Commoditised is the mass-market stuff that half the market also sells, where the only lever anyone has is price.
Specialised is the narrow, high-margin work that not everybody can do.
Augmented is what you wrap around the rest: the support contract, the training, the maintenance, the upgrade path.
Draw profitability up the side and effort along the bottom. Effort is not only money. It is time, people, skill, stock, everything it costs you to get the thing in front of a customer.
Now draw a line from the bottom left corner to the top right. Above that line you are selling value. Below it you are selling volume.
The two quadrants worth defending are the two most businesses underfund. Take an accounting firm.
Bookkeeping is a service a hundred other people in the same city can supply, so the firm competes on rate and lives below the line. Put the same number of desks into tax specialists, offshore structures and trusts, and the work is not readily substituted, so the firm charges what the expertise is worth.
Same building, same headcount, an entirely different number at the bottom.
Almost every business owner I have met believes the company operates above the line. Most of them are below it, and their turnover is the reason they cannot see it.
The commoditised quadrant is marshland. It looks like road.
It carries traffic, it appears on the map, other people are driving on it, and the numbers coming out of it are big, which is exactly what makes it convincing.
Revenue is not the measurement. Revenue is the bow wave.
You cannot sprinkle gold dust on a gold bar
The purest commodity I know is table salt. Same product, same shelf, four brands, and the only question anyone asks is which is cheapest. There is nothing you can do to a bar of gold to make it worth more than a bar of gold. That is the definition: an offering nobody can add value to.
Now watch what that does to somebody real. Picture a citrus grower in the Western Cape who has signed to supply A1 boxes of oranges to an overseas supermarket at £5 a box.
Then labour and fuel climb between 20% and 40%. Chemical costs jump because the supply came out of Ukraine. Drought arrives.
Load-shedding puts the packhouse on generators and diesel usage goes up 200%. The rand does what the rand does.
And the £5 does not move, because a commodity price is a number somebody else sets and you agreed to. At some point the cost of getting the fruit as far as port control is more than the contract will ever pay, so the fruit gets dumped.
Nothing in that story is a mistake. The grower did the work, produced the crop, honoured the contract. That is the whole problem with the quadrant. It punishes competence.
Nobody walks into it, either. You get moved. Something you sold on expertise 10 years ago is sitting on a price comparison site this morning, and on the day it arrived there, nobody sent a memo.
The notebook that paid for nothing
We nearly did the same thing to ourselves at First Technology, and it took me too long to see it.
We supply notebooks. So does every retailer in the country, out of the same box, from the same brand, and if we want to stay anywhere near their shelf price the very best we make is a 5% gross margin. That is before the storage, the invoicing, the packaging and the delivery, all of which we were paying for. Every notebook lifted our turnover and left nothing behind it.
There were three obvious answers and all three were wrong. Push the margin to 15%, and the client buys elsewhere, because nobody pays a premium for an identical sealed box. Add value, which you cannot do to an identical sealed box. Or stop selling notebooks, at which point one of your largest clients says exactly what you would say.
“I spend millions on Microsoft Enterprise with you. I buy all my data centres from you. You handle all my cybersecurity. But you won’t supply me with notebooks?”
He would have been right, too. You do not get to sell yourself as a turnkey IT solutions provider and then pick the fun parts.
So we left the price alone and went after the only number nobody had questioned, which was what it cost us to handle the thing at all.
Dell, Lenovo or HP distributors now deliver straight to the client. The invoice comes to us electronically and goes out the same way. All we ever touch is a proof of delivery.
That 5% covers the admin and leaves a profit behind it, and we move thousands of notebooks that never enter our building.
I have used that as a rule ever since. When you cannot raise the price and you cannot walk away, the only number left to move is what it costs you to touch it. So stop touching it.
Where my own grid lets me down
Three things here deserve more scepticism than I gave them in the book.
The first is that the grid is a photograph. It tells you where an offering sits today and says nothing about where it is heading, which is the only question that matters.
Notebooks were a decent business before they were a bad one. That £5 contract was a good contract on the day it was signed.
Commoditisation is not a category you sit in, it is a tide that comes to you, and I have drawn a very tidy grid of a floodplain.
The second costs me more, and it is the part of the notebook story I left out. That fix worked because those distributors were willing to ship on our behalf, and they were willing because we buy enough from them to be worth accommodating.
A two-person reseller in Bellville asks a distributor the same question and gets a different answer. So I have just told the smallest business reading this to take the cost out of a supply chain it does not control.
That is not a principle. That is me describing my own position and calling it one.
The third is the client letters, and I would write that section differently now. I sorted clients into A, B and C: married to the As, dating the Bs, and the Cs handled by phone and e-mail with no lunches, because they take your week and leave you nothing.
I called them the crabs in the pot, the ones who pull you back down when you climb for the edge.
The time arithmetic still holds. The metaphor does not, quite.
A letter is a decision, not an observation. Grade a client C, withdraw the visits, hand the account to your most junior person, and you will be proved right inside a year. That is not analysis, it is a prophecy with a spreadsheet attached. Some of those crabs are two years away from being an A, and the only thing stopping them is that you stopped going.
My own line gives the game away: even crabs can fill a pot if there are enough of them. In a thin year that pot is what pays the salaries. Every firm that has cleared out its small accounts to concentrate on the big ones finds out what concentration means the first time a big one leaves.
Who should draw the grid, and who shouldn’t bother
Draw it if turnover is up and profit is flat, because that gap is the whole of this article. Draw it if you cannot say what any single offering earns after everything it costs to deliver. Draw it if your most expensive people spend most of their week on the work that pays least, which is more common than anyone admits. And draw it, urgently, if you are the one who signed a fixed price against costs you do not control.
Do not bother if what you want is a document that justifies sacking customers. The answer to our notebook problem was never to stop selling notebooks; it was to stop carrying them. Most commoditised lines have a version of that fix hiding somewhere in the logistics, and firing the client is the laziest one on the shelf.
Do not bother if you are going to draw it once and hang it up. Ours gets redrawn because the ground keeps moving underneath it, and a map of a floodplain is only true for the season it was drawn in.
I still think about that marsh outside Third Bridge. The signs were right. The map was right. The app was right.
And we were sitting in 1.5m of water, going backwards at 25km/h on two side mirrors, watching a wave we were making ourselves.
Turnover is that wave. It is the biggest, loudest thing in front of you and it will not tell you how deep you are. Somewhere on your books is a line of business you have not measured since the day you won it. Go and put a stick in the water, while you can still reverse.
Johan de Villiers is the leader of First Technology Western Cape, an award-winning IT provider in South Africa. His book ‘Overlanding Through the Boardroom: Using Adventure Principles for Success in Business’, is published by Rockhopper Books.
ALSO READ:
- Chapter 7: Why the cheap answer keeps winning
- Chapter 6: Importance vs urgency
- Chapter 5: Why team selection matters
- Chapter 4: Lessons from black swans
- Chapter 3: The Dunning-Kruger effect
- Chapter 2: The Swiss cheese effect
- Chapter 1: The mindset factor
