TODAY'S GLOBAL BUSINESS TRENDS
Trends are powerful. They are just like sea waves. If you swim in the same direction as the waves, you will get ashore quickly and with minimal damage. If you swim against the waves…. I will leave that to your imagination
In the 1980s and 1990s when the information age started, those that saw the trend early and rode their businesses on the trends prospered a great deal and those that sat down and said to themselves, we'll change later….. well, most of them have either collapsed or become “beggar-companies”.
My hope with that in this article, is to introduce you to some ideas that have become strong business trends. Some you may already have heard but didn't really understand, others may be new to you. In all, I'll be talking very briefly on 6 of them. This is NOT a detailed university lecture, it is simply an introduction to these business concepts. My greatest hope is that you will be able to take one or more of these trends away, investigate it further and begin to ask yourself, how it may help improve your business and add a few more zeros to your profit line.
Thirty or so years ago, businesses that succeeded were those that had secret information that nobody else had and also the resources to do something with such information. In other words, thirty years ago, information was the competitive advantage for the companies that succeeded. When the internet became a communication Revolution, one of the things it did was to make information readily available. Eventually, there was so much information available that it became very cheap and no more a competitive advantage to have just information. The next step was to do something with that information, which is what we call Knowledge. Little by little organisations who were able to use such information to their advantage became more successful. This is how we moved from the information age, to the knowledge age. Then eventually the internet made knowledge readily available. In order words apart from making information available, it also made available knowledge on how to use that information. As a result neither Information nor Knowledge was a competitive asset anymore. They both became very cheap and very available. The next step in this evolution of the world economy was “Innovation”. In Order words, businesses who can now turn the available information, and knowledge into “new ideas” had a greater opportunity to become more successful. I have a construction engineer friend who was sharing with me a month ago how their company was now able to produce concrete that was less heavy, stronger and less expensive. Now that is innovation and we can all see how good it sounds to their profit margin. The information they needed was not new, the technical knowhow was not new either. All they really did was to think about how to do things in a different and new way.
Innovation is really not the same as invention. An invention is coming up with something that has never been done before – that's invention – it involves new information and new knowledge. Innovation is more like using the information and knowhow that you have to generate new ideas. The keyword is ideas. Innovation means generating new ideas always and not only when your company starts facing competition. Innovation means generating new ideas before anybody else does. Innovation is generating ideas that add value to your company in the short run and long run. Innovation means getting everybody in your organisation to come up with new ideas, not just the people at the top. And finally, innovation is the process of generating ideas about an organisation's products and its internal processes. So in effect innovation is finding new and better ideas on how to run your organisation, new and better ideas about how to make your products, new and better ideas on new products, and new and better ideas about making your customers satisfied. Innovation simply equals successful ideas.
The second business trend I want to bring to your attention is “Social Media”. And without doubt I can imagine some faces have lit up with the expression “Ahhh! Facebook”(I hope you also bought your Facebook shares). With the rise of information, came about a problem. You see, before the information age, you needed people (human beings) to be in the picture for you to get access to information. And if you think about knowledge being the way in which information was used, you'll realise also that in the past, every business needed real people to teach them how information could be used. In the past also, you needed a customer to be physically present in order to transact a business. With the information and knowledge age happening through the internet, business became more and more divorced from people. After so many years of the information age, the world has realized that human beings are indeed social animals and then …knock! Knock! Knock! Enters Mr Social media. The social media is simply an attempt to re-connect people who were divorced during the information and knowledge booms. It's a way of adding back the “human factor” to the already booming information and knowledge age – Mark Zuckerberg, the founder of Facebook was one of the pioneers in adding a human and social dimension to the information age – and this is a typical example of innovation. The information he used wasn't new, the internet technology was not new, the people who use Facebook were also not new to using the internet – the truth is he just had an innovative idea on how to connect all three components.
The Social Media age has meant that whereas in the past we only had access to information everywhere, now, we have access to people everywhere. So you have platforms such as Facebook, blogs, Twitter, Linkedin, Skype etc. and they all give you access to people everywhere.
For businesses, this is a brilliant opportunity – In the past, if you were physically located in say Kenya, it meant you were very restricted from finding potential customers in say Ghana and Namibia, unless you had a physical office in Namibia or Ghana or you placed an expensive advert in their national newspapers and Televisions and Radio. These days you can make yourself available on Social Media sites, and customers themselves will find you.
Every business undisputedly thrives on people. The more people you can reach means the more customers you can find, and the more customers you can find means the more money in your…. I'll leave that to your imagination. The point I am trying to make here is that if your business can make itself available in the social media, it provides an opportunity for customers and potential customers to relate to you in a way that makes them feel part of a society. Social Media, undoubtedly is changing the face of business – it is an opportunity for businesses to meet with their customers every day, where they want to be met – think about the advantage it brings. Averagely every Facebook or Twitter user logs unto their account at the least twice a week – try imagining physically meeting with all your clients and potential clients at least twice each week at a fraction of the current cost. Now, think about the advantage your business has if your customers start seeing you as part of their own social family. Think carefully about it.
INTERACTIVE MARKETING & CROWDSOURCING
The whole idea about marketing is that it is meant to tell your customers what you have to offer, for how much, where, when and how. Currently, marketing by most African businesses broadly falls in two categories – carry out a marketing analysis and then put out an advert hoping that it will entice customers to buy your products and services OR you put out a promotion so that customers win prizes for buying products or services. Today, we can safely call these methods traditional methods of marketing. Two of the biggest shortfalls of these methods of marketing are that (1) It's a one way road – you offer something to the customer and the customer either buys it or leaves it. There is no opportunity for the customer to offer you anything, even if it is for free (2) these traditional methods of marketing fail to recognize the fact that customers change all the time, their desires change, their tastes change, they are always changing but the question is, does your marketing change at the same pace as your customers.
Interactive marketing as the name suggest is marketing alright – except that you give your customers and yourself an opportunity to relate and interact with each other, more frequently. And as a business, your greatest ally in achieving this is Social Media. Its interesting how this works – Social media, because it is now available on the internet, mobile phones, televisions etc gives you an opportunity to market yourself to customers and potential customers in a way that they can connect with you, discuss with you and feel a part of your company, your product and your services – now this is true marketing. It is the kind of marketing that makes customers see your company and products and services as people that they can relate to. And the good thing about it is that you can reach them everywhere, not only through the traditional TV or radio or billboards. Today, you can reach them even when they are at work or on holiday.
An advantage of Social marketing is this – when your customers start feeling that they are being heard, if they feel they are a part of your organisation and more than just your customers, they may even start giving you innovative ideas, which if you listen and develop into a product or service, these same customers will turn around and buy. That's how the term crowd-sourcing came about. It really is the ability of an organisation to interact with its customers in order to find new ideas. Crowd sourcing comes in different forms – I have seen companies that have idea submission sites where their customers submit ideas on what the new products should be and some of those ideas have become successful products that the customers are proud to buy – why? Because it was their idea in the first place and they are proud of it. Other crowd-sourcing approaches have involved customers submitting ideas and other customers voting on what the best idea is. The good thing about all of this is that you don't have to physically meet your customers in order to market to them effectively or strengthen their loyalty. I am not saying your company necessarily has to be on Twitter or Facebook or Linked in or any other social network. No. That's a choice for you to make – But at least I can tell you that a lot of organisations I know are benefitting from it.
The former CEO of Xerox Anne Mulcahy once said that in today's business world you either partner with someone or you perish without anyone – and she is right! How do I know? Because I am married, and sometimes I still can't figure out if the marriage is a takeover, a merger or an acquisition – but I am excited there is a working partnership. Almost every business in Africa wants to grow. The shareholders, the directors, the employees all want the organisation to grow. They may all have different reasons for wanting such a growth but the bottom line is they all want the growth. Every business grows by either increasing its share in the existing market or finding its way into new markets. There are many ways of achieving these but traditionally, there are only two ways. 1) by building the growth. This is the hard method where everybody in the company has to work very very hard to grow the company internally. No 2) is to buy the growth – through a merger or an acquisition. Even though Mergers and Acquisitions appear to be the easiest option – there is a hard truth, two hard truths in fact. The first hard truth is that when you acquire or merge with another company, you don't only take on its good side; you also take on the cancer infected parts too. The second hard truth is that mergers and acquisitions take very long, they are exhausting, and the integration process can go well or wrong but the biggest truths of all is that over the years, it has become overwhelmingly accepted that mergers and acquisitions generally don't work.
Now, lets welcome “Strategic Alliance”. Others choose to call it “Strategic Partnership”. Whichever way you choose to call it, it is the route which allows you to enjoy all the benefits of a merger or an acquisition without the related troubles and failures. As businesses, you need to realise that you don't have what it takes to satisfy every single need of your customers. It is impossible. A Strategic Alliance is a very simple agreement between two parties to pool resources together to achieve a specific goal. I remember some years back whilst in a firm called Pannell Kerr Forster, we engaged in a strategic Partnership with Deloitte and Touche (also another firm) to carry out a job for the National Bank – My firm presented me as a specialist in Internal and Accounting Controls whilst Deloitte presented a specialist in Banking Operations. Now this is a strategic alliance between two complimentary firms – But it gets wider than that. It is possible too for an organisation to have strategic alliances with customers, or with its suppliers, or even with its competitors or with Academic and research institutions and last but not the least, with government. The beauty about strategic alliance is this – you don't have to get involved with the other party's entire organisation – just the part that is of interest to you. Japan's mobile internet market is dominated by an alliance between a company called NTT and another called DoCoMo and together they own 50% of Japan's mobile internet market. So for example in a marketing alliance two parties can come together and share each others customer database with the result that both can sell to each other's customer – the benefit is that the number of customers you can both reach now increases and you didn't have to work hard to win those customers.
By Charles Kofi Fekpe (FCCA, CFE)
The author is a Writer, Public Speaker and a Chartered Certified Accountant currently managing the Finance Operations of a Development fund in excess of $90 million for one of Europe's premier Governments. All views expressed here are personal.
Email: [email protected]