SWOT - Strengths, Weaknesses, Opportunities and Threats

Meet Zenyatta by CLEN

Introduction: Meet Zenyatta

By pop culture’s standards, graphite is the modern day equivalent of The Black Panther’s vibranium: a little-known natural resource that, when added to another substance such as concrete or water, it instantly fortifies it. This might sound futuristic, but it is very much a present day reality. Graphite is a naturally-occurring, single layered, form of crystalline carbon in a hexagonal pattern. Graphene has the potential to open up new markets in medicine, energy, electronics, manufacturing, transport, defense, consumer products, and technological advancements due to its unprecedented properties that make it highly versatile (Barkan, 2018). Graphene is known for its strength, flexibility, lightweight, and conductivity (Barkan, 2018).

Zenyatta Ventures, a northern Ontario-based graphene solutions company, is situated in the driver’s seat amongst all the buzz.  The organization is focusing on “developing the Albany Graphite Deposit (“Albany”) – a rare, igneous related, hydrothermal graphite deposit with the potential to produce a natural, high-purity graphite that may compete in high-technology markets traditionally reserved for synthetic graphite.” (Zenyatta, 2018, para. 1). More specifically, Zenyatta aims at developing new nano-material technologies and composites by using the world’s largest Albany Graphite deposit (Zenyatta, 2018). Evidently, this is a fairly new industry, but the boundaries for the application of graphene are limitless.

As with any trailblazing company, there exists great opportunity, great challenges, and even greater risks: Zenyatta is no exception. This is why Colin Van der Kuur agreed to sit down with the CLEN team to conduct a strategic analysis of Zenyatta.

Meet the Team: CLEN  

CLEN is a management and leadership team focused on strategic leadership and professional development in the context of the Strategic Leadership course at Trinity Western University. The use of the word CLEN as the team’s name is symbolic for two reasons. First, CLEN is an acronym using the first initials of all the team member’s names: Christina, Lisa, Emmanuel and Nadia. Second, CLEN means “member” in Slovak (Clen – English translation – Linguee, 2018). As a team, each member is valuable, just like each member of an organization is valuable: their input, development, and success is integral to the overall success of the company. Through our analysis, we hope to offer strategic insights for the benefit of the company and the members who work at Zenyatta.

Understanding Zenyatta : Pre-SWOT Analysis Brain-Swarming Questions Session

Our focus in this consultation is to conduct a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis for Zenyatta, as they prepare to expand into new markets. SWOT analysis or “environment scanning” (Hughes, Beatty, and Dinwoodie, 2015, p. 73) is a “common method of assessing” (p. 73) the state of an organization.

Our approach first involved a Brain Swarming technique where the team developed tailored questions for each category of the SWOT analysis (Figure 1.1) to help us better understand Zenyatta. Brainswarming “is a problem solving technique which questions why we really need to talk in the first place” (Adam, 2018, para. 5). Furthermore, Adam (2018)  argues Brainswarming provides each member of the team an opportunity to make a significant contribution to the process.

Figure 1.1. Questions Developed through CLEN Brain-Swarming process.

STRENGTHS

(Internal positive effects)

Vision, Mission, Values, Culture

  • Origins/history of organization.
  • Composition/dynamics of people/working relationships

Strategic Advantages

  • Leadership strategies
  • Best practices

Human Resources

  • Staff/volunteers
  • Recruitment/retention

Operations

  • Start up, developmental stage, ongoing processes
  • Goals/outcomes to achieve vision/mission
WEAKNESSES

(Internal negative effects)

Challenges

  • Obstacles, areas for improvement
  • Impact of change management

NP vs. Business

  • Balance competing interests
OPPORTUNITIES

(external positive effects)

Risk taking

  • Boldest move to transform organization
  • External factors that leverage opportunities

Scanning

  • Future consumers
  • Innovation, next best idea, evaluation

Global impact/trends/environment

  • Global benefit from product/services
  • Global integration
THREATS

(external negative effect)

Innovation

  • Resources, financial & otherwise
  • Competition

Anticipation

  • Trends/issues
  • Evaluation: accountability, measurement, reporting

A Look Inside Zenyatta

Having developed our questions, CLEN held a video conference with Colin Van der Kuur to gain more insight in the company. Colin is a research catalyst for Zenyatta, meaning he makes the decisions for what research the company should focus on. Therefore, he also makes critical decisions pertaining to allocation of limited resources in terms of their relevance to Zenyatta’s strategic short and long term goals. Colin must use critical thinking and careful analysis before making a decision, considering various conflicting perspectives before choosing a specific area of research for Zenyatta to focus on. Colin indicated having clear and concise strategic priorities helps him make decisions aligning with the long term vision of the company. He must take many things into consideration such as obtaining results quickly for shareholders, building collaborative partnerships and relationships with industries to help pay for further research. His job encompasses many different strengths including creativity, analytical ability, decisiveness, open-mindedness, self confidence, and self-efficacy.

Strengths

What makes your organization stand out?

  • Zenyatta provides a unique “fine crystalline properties of the source material for graphene production” derived from their Albany Graphite deposit in northern Ontario. The graphene materials produced from Zenyatta’s Albany deposit are attractive to investors and other companies because of its unique thickness and high dispersion qualities – “making them ideal for composites like concrete, rubber, and plastic” (Zenyatta, 2018). In addition, the quality of the graphite has been confirmed through independent testing conducted by five universities. According to Colin, Zenyatta’s northern Ontario deposit produces the best quality of graphene in comparison to any other natural resource in the world. Unlike any other mine and the quantity of graphene it can produce, the wealth of graphene available to Zenyatta by way of their northern Ontario deposit means Zenyatta is well-positioned to supply large industrial quantities to appease forecasted market demand.

What advantage might you have in terms of staff (volunteer) recruitment & retention?

  • Colin is confident in the staff at Zenyatta because they are all shareholders and committed to ensuring the company’s success. However, it was not always like this as a shift in management took place over the past year and a half. Shareholders had concerns with regards to previous management decisions, specifically rooted in an absence of strategic decision-making at the time. Decisions were too linear, and as such, opportunities were missed. Attempts to speak to management were rebuffed, prompting a surge of legal letters/opinions, which ultimately led to a proxy vote to replace management. Concerned about the future of the company, Colin wrote a blog post formatted as a white paper for his vision of Zenyatta. Within a couple hours of him posting, the leader of the take-over party invited him to join a group of private shareholders. Ultimately, management underestimated the power of the shareholders because as of May 11th, 2018 this new group won the vote.  Of the group, six staff members were identified and assumed leadership roles within Zenyatta as it begins to rebuild.

Can you share your best practices in the start-up stage of your organization?

  • Deep sense of collaboration
  • Engagement
  • Respect
  • Teamwork
  • Shared vision

In addition, shareholders are also heavily invested: not only are they financially entrenched but also emotionally invested as they believe in the vision and mission of Zenyatta and the impact that it can have in the world.

What was your best leadership strategy in the developmental stage of your organization?

  • Having a strategic plan and working hard, which was contrary to the ideology of previous management.
  • Trying to look for opportunities to collaborate with the most innovative companies in the world (i.e. the DLR, which is Germany’s NASA, for example).
  • Appealing to shared values which, in this case, is the opportunity to give back. Graphene’s qualities make it an ideal candidate for more advanced water-purification. A breakthrough in this area could benefit not only remote northern Ontario reserves but also water purification problems that exist around the globe.

Weaknesses

What are your greatest areas for improvement?

  1. Brand recognition. No one knows who Zenyatta is, what they stand for, and what they’re capable of. This problem originated under the previous management’s poor decisions. Most notable at national and international conferences: no one has heard of the company.
  2. Capital Crunch. Building capital is always a challenge for start-ups, a problem multiplied for Zenyatta as a lesser-known company marketing an emerging product.
  3. Staff Compensation. The absence of capital and current renewal phase of the company means they do not have a lot to offer by way of compensation (beyond shares). This means staff are compelled to take action through motivation and passion alone.
  4. Website/Online presence. Zenyatta’s current site does not effectively encapsulate the company’s mission, vision, nor values. Unfortunately,  anyone seeking detailed information about Zenyatta must open up an investor presentation, which is not very user-friendly.
  5. Product awareness. They currently spend a lot of time and resources describing and educating people what graphene is as very few are aware of its potential.

Is there anything your organization doesn’t do well?

  • Branding: Zenyatta currently relies on collaboration. The company works with university and industrial partners which strategy requires human capital to advance the company development process. The situation forces Zenyatta to exercise patience because the company operates at the pace of university researchers. Colin’s portfolio includes vetting researchers, assessing their suitability with the organization’s culture.

Opportunities

What external factors leverage opportunities for growth/enhancement/betterment in your organization?

  • The Government of Canada could potentially play a large role, but it all comes down to “who you know” paradigm with regards to government contacts. Zenyatta recently attended a conference focused on defense and they had a premium spot on the conference floor, gaining incredible visibility and exposure.
  • One of the newest members of the Zenyatta team is a government liaison who lives in Ottawa and who is actively pursuing all leads.
  • Graphene could be for the 2000’s as silicon/plastic was for 1900s. It has enormous potential for disrupting industries.

What do you see as your next best idea?

  • Possibilities are unlimited.  Among the applications Zenyatta is currently working on:
    • Improvements to concrete (potentially a multi billion dollar industry) making it stronger and more durable. This also has environmental implications as concrete would require less material and lasts longer.
    • Water filters – The filters will take out 99.9% of all bacteria.
    • Heat sinks (i.e. removing the heat so electronic performance doesn’t decay.)
    • Batteries – graphene could potentially make them 50x better and the potential to charge 5x faster.
    • Advanced cancer treatment
    • Spinal cord repair

Threats

What do you anticipate might cause you problems/issues in the future?

  • Access to land. The deposit is on land with First Nations Treaty Rights. There is currently a memorandum of understanding (MOU) with Constance Lake First Nation in Ontario.
  • Finances. The company is in need of steady, stable funding and resources to get research and production moving.
  • New technology & Competition. Zenyatta is not the only company out there looking to break the mould using graphene. There is lots of competition, especially competition without years of difficulties with  poor management. The greatest threat is competition from outside Canada, including China, Europe, North America, and Australia.
  • Global trade. Canada-global relations are, for the most part, positive. However, it is a factor beyond the company’s control so it still poses a threat. There are many graphene companies in the United States competing for first-mover advantages; therefore, the U.S. could potentially implement high tariffs on Canadian graphene products to protect local companies, posing a threat to Zenyatta’s future revenue.
  • Economy. Markets are not doing great. Therefore, if the economy took a turn for the worst, it could practically halt production and operations.

What factors negatively impact your organization from achieving its vision?

  • Finances.
  • Resources. Zenyatta does not have its own lab to test various composites.
  • Over promising and under delivery from government officials: pledges by the government which seldom find fulfillment.
  • Not great market for raising capital projects.
  • Newness. Graphene is still in its infancy: the majority of people and investors never heard of the composite and its potential for revolutionizing industries.
  • Investor fatigue. There are not a lot of shareholders since the takeover. The current crop is satisfied with the status quo and the company is in a holding pattern. However, a downward trending stock impacts morale.

ZENYATTA: Obstacles, Opportunities and Options

This section will discuss Zenyatta’s latitude for risk, an assessment of the company’s external risk factors, and the way forward.

Assessing Zenyatta’s Latitude for Risk

In the aftermath of a critical leadership takeover within Zenyatta, the robust energy and expanding innovation within the company is clearly evident. In regards to the company’s approach, there exist several external factors within our SWOT assessment which may impact future growth of the company. As a team we completed the following risk assessment of four of the THREATS identified by Zenyatta Research Catalyst Colin Van der Kuur (see image 1).

Rating is based a on scale of 1-10 with 1 being the lowest level of risk and 10 being the highest, CLEN rated Zenyatta’s level of EXTERNAL risk based on the following FACTORS:

  1.   Competition – locally and globally
  2.   Global market influence and future market share
  3.   Current technological capacity and advancement .                                                                  Image.1 provides an insight into the CLEN’s individuals rating scores.

Assessment of External Risk

While not currently rated amongst the top competitors in the market locally or globally, Zenyatta’s bold move to unseat former directors earlier this year changed the outlook for this innovative company. Following promising negotiations with Constance Lake First Nations, they are on the verge of a competitive advantage in drawing upon a mineral source independently rated as the one of the best deposits in the world.

In our opinion, before any attempts to emerge into global market share, Zenyatta should focus strategies on national market exposure, rebuilding shareholders’ trust, and increased fiscal responsibility after the company’s historical share decline under former leadership.

Technological risk is high. While great opportunity for technological capacity exists, it is highly dependent on resources. For example, reliance on university experts for technology development is problematic because they lose a substantial amount of control over processes. In addition, the lack of e-market presence places Zenyatta at a higher level of risk since the company lacks publicity and mass market adoption.

CLEN’s research indicates, with an incredible and innovative vision for this nanotechnology, graphene appears to be the way of the future and likely the reason for the present threats encountered by Zenyatta. This theory supportive of their recent press release (CISION, November 2018):

“Zenyatta has completed a Preliminary Economic Assessment regarding the Albany Project (the “PEA”) in support of its development work (see Zenyatta press release of 1 June 2015). The PEA is preliminary in nature, it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Without a formal independent feasibility study, there is no assurance that operations will be economically viable.” (para. 13)

The company was in a state of steady decline for past the five years, with share prices plummeting from a high of $4.87 in 2013 to current share price of $0.42 cents (The Globe and Mail). This decline and lack of confidence in leadership resulted in a rare and bold move by dissident shareholders to unite and takeover the company, ousting four out of six directors in May 2018. Current leadership is in a state of recovery through the development of renewed strategies, collaborations, and shareholder confidence. According to a recent public announcement provided by Zenyatta Ventures Limited (CISION), Zenyatta “wishes to update shareholders regarding its finance position and communication strategy” (November 2018) as they look forward to the future of the company.

Zenyatta: The Way Forward

Zenyatta has a lot to offer, but nobody knows about it. We believe the company would benefit greatly from having a marketing consultant develop a 1-5 year marketing strategy. While a costly endeavour considering existing financial challenges, we think it would generate significant national and global connections for present and future collaborations. Regarding negotiations with Constance Lake First Nations, it will be imperative to focus on Indigenous Relations through the recruitment of a culturally knowledgeable partner to assist in meeting economic development opportunities within the Constance Lake First Nations community and traditional territory. Demonstration of cultural sensitivity is key to enhancing negotiations. Right now, all Zenyatta needs is one breakthrough connection and an effective marketing strategy to put them on the path to sealing that deal.

Zenyatta stands in the cross road of an industrial revolution. The graphene market holds vast promises (Remy, Thomas, Guetaz, Fouda Onana, Jacques, & Heitzmann, 2018) which could position Zenyatta as one of the major players. The company is committed to offering a healthier source of energy, has a good organizational structure, and appears to understand its strategic drivers (Zenyatta, 2015). At the same time, the lack of productivity, finances, existing market problems, and the reliance on outside expertise for research development account for the significant threats the company faces. If threats are unresolved Zenyatta might never move past the ‘ideas’ stage, with ideas holding great potential never realized.

We invite Zenyatta to partner with a well-established company in the energy field struggling to transition toward environmentally-friendly energy resources. This collaboration extends beyond government partnerships and, we believe, is a worthwhile investment as suggested by Galbraith (2014): “Companies face an enormous amount of opportunity but limited resources. Therefore, each one must decide what is it going to do, and do well, and what it is not going to do” (p. 20).

References

Adam, C. (2018). What is Brainswarming and how does it compare to Brainstorming. Retrieved from https://www.modernanalyst.com/Careers/InterviewQuestions/tabid/128/ID/3483/What-is-Brainswarming-and-how-does-it-compare-to-Brainstorming.aspx

Barkan, T. (2018). Graphene & The Graphene Council – The Graphene Council. Retrieved from https://thegraphenecouncil.site-ym.com/page/About

Cision (November 16, 2018). Zenyatta announces liquidity update and social media platform.   Retrievedfrom https://www.newswire.ca/news-releases/zenyatta-announces-liquidity-update-and-social-media-platform-700723921.html

Clen – English translation – Linguee. (2018). Retrieved from https://www.linguee.com/english-slovak/search?source=slovak&query=CLEN+

Galbraith, J. (2014). Designing Organizations (3rd ed.). San Francisco: Jossey-Bass.

Hughes, R., Beatty, K., & Dinwoodie, D. (2015). Becoming a Strategic Leader (2nd ed.). San Francisco: Jossey-Bass.

Lepsinger, R. (2010). Closing the execution gap: How great leaders and their companies get results. San Francisco: Jossey-Bass.

The Globe and Mail (2018). Zenyatta Ventures Ltd (TSX Venture ZEN-X). Retrieved from https://www.theglobeandmail.com/investing/markets/stocks/ZEN-X/

Remy, E., Thomas, Y. R. J., Guetaz, L., Fouda-Onana, F., Jacques, P.-A., & Heitzmann, M.  (2018). Optimization and Tunability of 2D Graphene and 1D Carbon Nanotube Electrocatalysts Structure for PEM Fuel Cells. Catalysts (2073-4344), 8(9), 1–11.  https://ezproxy.student.twu.ca:2420/10.3390/catal8090377

Zenyatta – Our Company. (2018). Retrieved from http://zen.zenyatta.ca/article/our-company-1389.asp

Zenyatta reports positive about Albany Graphite mine. (2015). Metal Powder Report, 70(4), 194.  https://ezproxy.student.twu.ca:2420/10.1016/j.mprp.2015.06.028