Creating a world-class business in Papua New Guinea requires tenacity and creativity to overcome obstacles, according to Brian Kelly, founder and former CEO of security company Black Swan International. He describes how he refined his strategies as the business grew.

Identifying a market for which there is strong demand is key to set up business in PNG. ‘When it rains, you sell umbrellas,’ explains Kelly. ‘For many years, every survey has ranked security as one of the top concerns in PNG.’

Although there were many competitors in the security business and Kelly was concerned about market saturation, he persisted. He was also warned about aggressive tactics being used against new entrants. ‘You must be careful who you get advice from and who you associate with,’ he says. ‘Do your due diligence thoroughly … Assume nothing, believe nobody, check everything yourself.’

‘In any business, you have good and bad days. What I’ve experienced in PNG is that when you have a bad day, it’s just a little worse than a normal day – you learn to appreciate that.’

He insisted on being self-reliant during this stage but eventually he sought out an informed local. ‘I quickly realised I needed a Sherpa, somebody who’d walked the path before. Once I hired one, I had to work out how to compete.’

Intellectual property

Kelly, who sold Black Swan International to the Paladin Group in late 2018, says his strategy was initially to leverage his intellectual property in order to develop a unique offering for clients. He also set out to lower risk, reduce cost and increase productivity.

Then he realised that to achieve credibility, he needed to expand the size and scale of the business.

‘I started to grow the manpower size of the business. But with that positive growth came other problems, mainly cash flow ones.’

Getting clients to pay on time became a continual challenge, as was managing staff reliability. To solve the latter, he provided food for his employees, established a 24/7 vehicle workshop and an IT department.

‘Assume nothing, believe nobody, check everything yourself.’

That expansion of operations into other areas turned out to have a positive effect on the core business. The clients started using those other services, which positively affected cash flow.

‘[I said] if you use two or three of my offerings, I’ll give you a discount if you pay me on time. Suddenly, they started paying on time. This was a master stroke for the business.’

Brand development

Brian Kelly at the 2019 Business Advantage PNG Investment Conference. Credit: BAI

Kelly observes that it is hard to keep mistakes quiet in Port Moresby and, as the business grew, it was necessary to shift the emphasis to protecting the brand.

‘In any business, you have good and bad days. What I’ve experienced in PNG is that when you have a bad day, it’s just a little worse than a normal day – you learn to appreciate that.’

Kelly says he was eventually able to establish credibility – three quarters of clients use two or more of the company’s services – a sizeable market share and an extensive geographic footprint.

He also developed social inclusion packages and, at one point, about 45 per cent of Black Swan’s employees were women.

Kelly believes managing the social dimension is imperative in PNG. ‘It’s the right thing to do.’

Three myths

Kelly identifies three myths about doing business in PNG.

Myth one: it is too dangerous. He acknowledges that the risk in the country is ‘fluid’ but believes that, as long as sound guidelines are followed, it can be managed.

Myth two: businesses in PNG require a lot of expats. Companies need experts but they do not have to be expats, he says. ‘At one stage, we had over a thousand employees and I could count the expats on one hand.’

Myth three: business is best managed remotely. ‘Some business models work that way, but I believe that what works is to commit to the country. Embrace the culture, assist local communities, pay taxes and embrace the wantok system.’