Risk Manager (March 2010)

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Developing Your Business for the Future

The world has changed a lot over the past ten years, and so has the way that we approach and do business. And the transformation isn’t over; we are just now at the precipice where those businesses and business leaders who are not acknowledging and embracing these changes, will find themselves freefalling into a business “black hole.” And as savvy competitors; who are also caring world citizens, comprehend, understand and adapt to the positive reshaping, they will be able to step in and produce the product and services once created by the lost businesses. Change is no longer important in our business world, it is imperative.

During the last decade, the “what’s in it for me” approach came collapsing down around the feet of business leaders all over the world with the Enron collapse, the meltdown of the banking industry and Dubai’s quasi-default. Wizened consumers are now seeking companies that value ethics above financial gains at any price, and exploitation is not only looked down upon, consumers will no longer tolerate it. Businesses that expect to sustain and embrace growth are now recognising the importance of a collaborative approach of doing business for the better of all concerned.

The global recession that we are currently experiencing was widely created and hugely impacted by the choices that businesses made as they developed unsustainable growth and exploited millions of people and untold resources in the process. The experience, while it has been painful for people in communities all over the world, has brought back a sense of groundedness about what’s important in a world that is now filled with the technology to keep consumers informed.

At one time, many facets of doing business were not “in the public eye,” but with the advent of the Internet, blogging, and cameras on cell phones, the public eye is everywhere. And consumers are now quicker than ever to voice their approval or disapproval by either an increase or decrease in sales. A negative YouTube Video or Internet blog that can spread to literally thousands of people in a matter of minutes can create a large financial “hit” on the offending business. This is a good thing; because in contrast, consumers are also noticing and supporting companies with strong ethics and customer focus.

Technology not only has the power to “keep businesses on their toes,” it has also had a huge effect on how we do business. At one time a business was limited to the expertise of the employees they could hire within their communities. Now, companies can have virtual employees who live thousands of miles away—on different continents, in different countries—which is giving businesses the power to hire the exact expertise they need for the exact length of time they need it. And the plus side for these virtual employees is that their expertise can be recognised and utilised by a wide range of employers in a myriad of industries. And through the magic of email and video conferencing, communication between employers and virtual employees is easy and cost effective.

However, in order for business leaders who utilise the skills and talents of people from all over the world to effectively manage these employees, they must first appreciate cultural diversity and secondly understand the social and behavioural differences of people in other lands. The strategies used for motivation in one country or culture could have adverse affects in another. And successfully doing business now requires an emphasis on acknowledging and appreciating the people who help us move our businesses forward because while technology helps companies find the best employees, skilled employees no longer have to work for the company down the street, they can now choose their employers from a global market as well.

Communication between all levels of business ownership, management and staff has gone from being important to being absolutely crucial. Yet technology has provided us the means to make this communication extremely easy and cost effective. Email puts international communication at almost everyone’s fingertips and products such as Skype allow long-distance communication around the globe to take place without the worry for small or mid-sized companies of gigantic phone bills.

This global approach also mandates a higher level of cooperation and collaboration on all levels. At one time, the economic, social or geographical challenges of another country did not affect businesses around the world. Now, because of globalisation of commerce as well as social communities, the conditions in a country thousands of miles away can now impact our businesses. And because of this impact, the intense media coverage and the international social connections that are now open for people of all socioeconomic levels via the Internet, our global culture is concerned about people all over the world.

With our global awareness of the effects that business choices have on resources and energy in a variety of environments and for a wide culture of people, an appreciation for and a respect of Mother Nature and our earth is being mandated by the consumer in what they buy and how they buy it. While at the same time, technological advances put organic and non-chemical processes at the hands of almost every business of any size in any industry.

Innovation in the products and services we offer, as well as a creation of new arenas for business, is now an absolute must for business success. Compare Apple with their iPhone—which is a new technology yet consistently changing, updating and innovating—to the car manufacturers where the product—other than changes to style or fuel mileage—has remained basically the same for several decades. The results speak for themselves—Apple is booming while the car manufacturers are struggling and/or collapsing.

As new entrepreneurs enter the business circle, along with building a financially successful enterprise, they must also be concerned with an awareness of the global community along with sustainability, accountability with resources (both natural and human), and ethical behaviour. The Harvard Business Review writer, Gill Corkindale succinctly defined what it will take to be a leader in this decade when she said, “Simplicity is the key: be real, be aware, be fair, be human, be balanced, be mature, be ethical, be inclusive, be truthful, be responsible.”

Gone are the days of telling people what to do and how to do it. Communication of ideas, concepts and overall input will be the basis of how companies operate, innovate and succeed. Layers of management will fade into the team approach as leaders recognise the long-term benefits of embracing the concept of recognising that everyone within an organisation impacts its environment and its overall success. Businesses of this decade and the future will need to be able to put their confidence, trust and focus on their employees and as a team, put that focus on their customer.

Because they now have the ability to purchase products, and even services, from all over the globe, consumers are more value focused than ever. And value doesn’t always mean price. While customers are more price savvy because of the easy access of information for cost comparison, they are also looking for the product or service that will give them the most value for their money. For instance, in the food industry, consumers want good prices, but they also want nutritional value along with freshness, taste, convenience and variety. If a grocer whose prices may be less, does not provide all of these value-added features, a customer may be willing to pay more to get what they consider to be a better value.

The phrase “value-added” includes features such as the way a product looks, its packaging, its reliability and durability, the service or guarantee that backs the product, and in some cases, the environment in which the product or service is delivered. And often the way a company does business as a whole will influence consumers. For instance, the way Toyota has recently voluntarily recalled millions of cars and has totally stopped selling those models when the problem with the sticking accelerator was discovered. Instead of waiting for a mandated government recall, Toyota stepped up to the plate showing their concern for the people who buy their products. Consumers want to feel safe with the products they purchase and Toyota has demonstrated that customer safety is of utmost concern to them as well.

This past decade has seen drastic changes to the way we do business and to what consumers in general expect from a business—and the alterations have been good. The challenges in these changes is that businesses have to first recognise them, understand their impact and then be ready to incorporate the new approaches and mindset that are now necessary.

Paul Davis FCMA CMC
Davis Business Consultants
Business Growth Specialist

Tel: (01) 288 5563
Email: paul@davisbusinessconsultants.com
www.davisbusinessconsultants.com

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