Pointers for Successful and Sustainable e-Business models

While there has been so many e-business ventures, very few actually even live to see the light of profit. A major reason for this is that business never think properly in depth before going online. There are so many aspects that the CEO needs to give time to think before going online, and not do it just because its the way others are going. Few such questions are as follows:

  • First and foremost, the top management needs to deliberate on the nature of the business and the industry. What are the core competencies of the business. Will that be enhanced by going online?
  • What about the navigational structure and the way the organization functions? Will the culture embrace such a change effectively? What are the chances of talent loss to competing firms due to the cultural changes and process changes?
  • How would the existing customers react to the change? Is there a customer retention plan in place? Will the move help to reach out to new potential customers?
  • Is the business geared with the proper technological architecture? Have the processes been remodeled to fulfill service demand?

Do keep in mind that the technological architecture has to be designed keeping the service planned, in mind. The architecture preferably needs to be custom fit with your business process. If you are doing the reverse, i.e. fitting your processes to the architecture, do try to weigh out the pros and cons of the switch of the business model to the new business model. Then the above questions become relevant even more to ensure that the company stays healthy and safe.

Top 15 Quotes from the Management Guru Jack Welch

John Francis “Jack” Welch,  is an American chemical engineer, businessman and author. He was Chairman and CEO of General Electric between 1981 and 2001. Welch’s net worth is estimated at $720 million. Jack Welch is such an authority on the subject that many master of organizational leadership programs put a focus on his principles of management. Following are few of his top rated quotes on management.

  1. Face reality as it is, not as it was or as you wish it to be.
  2. If you pick the right people, and give them the opportunity to spread their wings and put compensation as a carrier behind it you almost don’t have to manage them.
  3. Give me a highly successful unionized industry.
  4. If change is happening on the outside faster than on the inside the end is in sight.
  5. Giving people self-confidence is by far the most important thing that I can do. Because then they will act.
  6. If you don’t have a competitive advantage, don’t compete.
  7. Control your own destiny or someone else will.
  8. Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion.
  9. An organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.
  10. Number one, cash is king… number two, communicate… number three, buy or bury the competition.
  11. The essence of competitiveness is liberated when we make people believe that what they think and do is important – and then get out of their way while they do it.
  12. The Internet is the Viagra of big business.
  13. If GE’s strategy of investment in China is wrong, it represents a loss of a billion dollars, perhaps a couple of billion dollars. If it is right, it is the future of this company for the next century.
  14. My main job was developing talent. I was a gardener providing water and other nourishment to our top 750 people. Of course, I had to pull out some weeds, too.
  15. Willingness to change is a strength, even if it means plunging part of the company into total confusion for a while.

Do share if you liked these quotes from the Management Guru Jack Welch.

Simple things we forget

1. We earn to live but we don’t live to earn
2. Office is a place where nobody is concerned about anything other than self interest. I f somebody is friendly then that person obviously wants something out of you. Be cordial, friendly, but never sacrifice your own interest. Learn to say no with a smile at times. People in office love you only as long as you listen to everything they say like an idiot
3. Health is wealth, once lost it never comes back
4. If you work less one day, then you can obviously make up in the future. But if you loose your health, no office is going to compensate you for that
5. Our health is dependent on food, sleep and happiness. It is very essential to relax so that the body can sustain in the long run
6. Nobody in this world can love you or care for you more than your mother and your life partner
7. We always think that we are achieving a lot, but years later when we look back we see that we have missed out on a lot of things in life

Generic Strategies for the Ultimate Competitive Advantage

“An organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage” ~ Jack Welch

Today, the firms operate in an even more competitive industry dictated by an ever unparalleled dynamism. Jack Welch never said anything more meaningful. In current times, when change is the only thing that is constant, a firm’s ability to learn, and more importantly “unlearn and then relearn” creates the most important distinguishing factor for sustainable competitive advantage.

Michael Porter’s framework for competitive advantage probably explains few of the focus issues firms may keep in mind while formulating strategies at the top level.

However, this is the way to achieve sustainable competitive advantage and a firm’s top executive needs to understand the core to his firm, based on which he can take this call. However, due to the dynamism of the industry structure, he needs to continually analyze and re-evaluate his strategies, based on the core.

A firm probably has multiple dimensions of personality traits, talents, resources and skills, and hundreds of other characteristics, but what is it that when all the others are surgically removed distinguishes the character of the firm at the very core? This is essentially the key which needs to be leveraged successfully and innovated upon continually to attain that otherwise illusive competitive advantage.

So how does one recognize one’s core?

One may argue that achieving “customer loyalty” may be a step towards achieving a sustainable competitive advantage. It’s not a secret that loyal customers are good for an organization or brand. You don’t see too many executives saying they don’t want more of them. But in spite of that what intrigues me is how few companies truly acknowledge, take care of and leverage those loyal customers in a way that measurably accelerates market share and recurring revenue while mitigating competitive risk and reducing sales & marketing costs. But in spite of  “customers” being a crucial focal point for business, it is required to recognize that in current times, the very nature of business is evolving. With the very definition of a firm’s role in an industry or even the definition of the industry under such a strict evolution, it is crucial to note that the very target customers are deemed to change in this dynamic market structure. So identifying and acquiring new customers, in spite of the spiraling costs of new customer acquisitions, may play a key role for sustenance.

Thus a firm’s source of resources for the “Ultimate Competitive Advantage” is much more than the sources of revenue. Smaller firms whose ability to learn and “unlearn and then relearn”have reaped the benefits in the past. The problem started after they grew to a certain size where they couldn’t stay so nimble on their feet, and faced competition from other firms, who were more adaptive to the dynamic industry structure.

Sometimes, one tends to think that probably a firm’s organization structure and the culture is the inherent and most important source of competitive advantage. But how can a firm leverage that to quantifiable profits since at the end of the day, business decisions are based on ROI figures and financial achievements. This is probably where a firm needs to rediscover itself.

Live to earn and die saving

People spend a third of their lives learning to earn money, a third to earn money and another third of their lives to save their money. It is a matter of debate which third of their lives is more important than the others. No risk no return is the fundamental law of money, if you have less qualifications to earn good money, chances of good income are still there but people will agree that probability is low and risks are high.

What we consider here is the government’s role in defining someone’s savings pattern? The government allows a person to hoard only a certain amount of cash or assets, the rest has to be either paid in taxes or locked into the free market or with the government. While this is a fundamental reason that keeps the economy running from an individual’s point of view, it is highly perplexing what to do with his money.

On one hand the government gives you the option of depositing your money with it and losing your money like slow poisoning thanks to higher inflation rate than deposit interest rate, or losing it altogether if you belong to one of those countries whose government is more unstable than a twig in a storm. On the other hand, the government encourages you to invest in the stock market and also incentivizes you by offering tax savings on long term capital gains, the catch being you can’t get out of the market without losing if you are caught in a downturn and anyways in the long term a balanced portfolio will give you an inflation-adjusted return of only around 10% on an annual basis. A lower than 10% return with the half dozen hedges so that you don’t get a heart attack when you are being hit left, right and centre makes a common man a most unlikely candidate to succeed in saving his money too much.

While GDP defines the spending power of a country’s population is it really good to have a population which spends all of its money for goods and services, or a population which saves and increases its asset base? The answer to the question is same as whether it is better to have a perfect process line producing output from input with zero inventory, or to have some inventory in place. A perfect system is only good as long as it lasts, in an imperfect world concessions have to be made, only time will tell if the concessions provided by the government to save our income can really boost the country to the status of most desirable place to live in or just a huge economy.

With Regards,

Arindam Acharyya

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