Posts Tagged ‘ recession ’

recasting your company as a ‘smart growth’ venture?

For all companies of course, but perhaps even more so for those in the mid-range, finding (and boasting about) one’s uniqueness, one’s ‘distinctive competencies’ is paramount.

Management consultants – at least some of the edgier ones – have been warming to the ideas of how companies can grow in ways that are less brittle to massive swings of capitalism. 

A poster-child for ‘smart, slow , sustainable growth’ is as close as pointing your browser to Etsy.com — a global marketplace for handmade objects.

Havas – the sixth-largest global advertising and communications group worldwide – makes a boatload of money advising companies on where to place their bets. Their think tank, Havas Media Lab, just released an essay on ideas about smart growth.  (below, text and URL)

‘point is, we can all pick and chose from what that article’s author  Umair Haque suggests about how companies will prosper.  Any *one* of the suggestions can help mid-range companies carve out an important niche.

——–

 

 

UMAIR HAQUE EDGE ECONOMY RSS Feed

The Smart Growth Manifesto

10:45 AM Friday January 30, 2009

Obama is stimulating. Davos isdeliberating. C-levels areeliminating. Wall St is recriminating. Welcome to the macropocalypse: no one, it seems, can put the global economy back together again.

It’s time to reboot capitalism. So where do we begin?

Here’s a suggestion for what should be at the top of agenda of every decision-maker across the economy, from Davos, to Obama, toSand Hill Road, to the revolutionaries in tiny garages hatching tomorrow’s Googles: reconceiving growth.

Why?

20th century capitalism is eating itself. For the first time since World War II, global growth is forecast to turn negative — and that’s an optimistic forecast, relative to the possibility of a global lost decade.Today’s leaders are plugging dikes, bailing out industries and banks as they fail. Yet, what negative global growth suggests is that the problem is of a different order: that we have reached the boundaries of a kind of growth.

Reigniting growth requires rethinking growth. The question Davos — and most leaders — are asking is: where will tomorrow’s growth come from? Will it result from oil, cleantech, bailouts, China, or Obama? The answer is: none of the above. Tomorrow’s growth won’t come from a person, place, or technology – but from understanding why yesterday’s growth has failed. The same growth models applied to new people, places, and technologies will simply result in the same crises, over and over again. We have to reboot growth: the problem is not what is growing versus what is not, buthow we grow.

20th century growth was dumb. The central, defining lesson of the macropocalypse is that 20th century growth wasn’t built to last. Dumb growth is unsustainable – if the world grows the same way that developed countries did, well, there won’t be a world. Dumb growth is unfair: it’s growth that’s an illusion for many; just ask the American middle class. And, ultimately, perhaps most dangerously, dumb growth is brittle: it falls too easily into collapse, reversing many of yesterday’s gains; just ask Iceland.

21st century economies will be powered by smart growth. Not all growth is created equal. Some kinds of growth are more valuable than others. Where dumb growth is unsustainable, unfair, and brittle, smart growth is sustainable, equitable, and resilient. 

Here are the four pillars of smart growth – for economies, communities, and corporations:

1. Outcomes, not income. Dumb growth is about incomes – are we richer today than we were yesterday? Smart growth is about people, and how much better or worse off they are – not merely how much junk an economy can churn out. Smart growth measures people’s outcomes – not just their incomes. Are people healthier, fitter, smarter, happier? Economics that measure financial numbers, we’ve learned the hard way, often fail to be meaningful, except to the quants among us. It is tangible human outcomes that are the arbiters of authentic value creation.

2. Connections, not transactions. Dumb growth looks at what’s flowing through the pipes of the global economy: the volume of trade. Smart growth looks at how pipes are formed, and why some pipes matter more than others: the quality of connections. It doesn’t just look at transactions at the global, regional, or national level — how much world trade has grown, for example — but looks at how local and global relationships power invention and innovation. Without Silicon Valley’s relationships powering the development of personal computing and the internet, for example, the volume of trade between Taiwan, Japan, and China, would be a fraction of what it is. Smart growth seeks to amplify connection and community — because the goal isn’t just to trade, but to co-create and collaborate.

3. People, not product. The next time you hear an old dude talking about “product”, let him know the 20th century ended a decade ago. Smart growth isn’t driven by pushing product, but by the skill, dedication, and creativity of people. What’s the difference? Everything. Globalization driven by McJobs deskilling the world, versus globalization driven by entrepreneurship, venture economies, and radical innovation. People not product means a renewed focus on labour mobility, human capital investment, labour market standards, and labour market efficiency. Smart growth isn’t powered by capital dully seeking the lowest-cost labour — but by giving labour the power to seek the capital with they can create, invent, and innovate the most.

4. Creativity, not productivity. Uh-oh: Creativity is an economic four-letter word. Why? Because it’s hard to measure, manage, and model. So economists focus on productivity instead — and the result is dumb growth. Smart growth focuses on economic creativity – because creativity is what let us know that competition is creating new value, instead of just shifting old value around. What is economic creativity? How many new industries, markets, categories, and segments an economy can consistently create. Think China’s gonna save the world? Think again: it’s economically productive, but it’s far from economically creative. Smart growth is creative — not merely productive.

Here’s a final point — and a question.

Smart economies are driven by smart growth. The four pillars of smart growth are design principles for next-generation economies. 20th century economies are limited to unsustainable, unfair, brittle, dumb growth. Smart growth is more sustainable, equitable, and resilient.

Capitalism 2.0 cannot be powered by growth.1.0: that’s why the race for smart growth is inevitable. The economic pressure — the potential for value creation, in a world being ripped apart by value destruction — is simply too great.

Can you build a business powered by smart growth? The four pillars of smart growth aren’t just design principles for next-generation economies: they’re also design principles for next-generation businesses. Already, tomorrow’s radical innovators don’t accept yesterday’s toxic, tired consensus. Revolutionaries like Apple, Threadless, Etsy, Whole Foods, American Apparel, and Google are already reinventing better ways to grow – from the grass-roots up.

Yesterday’s incumbents are beginning to fail en masse, while these revolutionaries remain resilient. Why? As our research at the Lab suggests, getting smart is a better choice than staying dumb: smart growth results in more creativity, innovation, effectiveness, and power than dumb growth.

For now, fire away in the comments with questions, examples, or criticisms. Which other companies are seeking smart growth? Is your organization building any of the pillars of smart growth? Are there countries or cities that are pockets of smart growth? 

* * *

 

http://blogs.harvardbusiness.org/haque/2009/01/davos_discussing_a_depression.html

——-

author’s bio:Umair Haque is Director of the Havas Media Lab, a new kind of strategic advisor that helps investors, entrepreneurs, and firms experiment with, craft, and drive radical management, business model, and strategic innovation.

Prior to Havas, Umair founded Bubblegeneration, an agenda-setting advisory boutique that helped shape the strategies of investors, entrepreneurs, and blue chip companies across media and consumer industries. Bubblegeneration’s work has been recognized by publications like Wired, The Red Herring, Business 2.0, and BusinessWeek, and in Chris Anderson’s Long Tail, to which Umair was a contributor.

Advertisements

panic versus urgency

My own sense of complacency was shattered into a VERY big number of little pieces with a particular bit of news over the course of the last few days. 

I panic -d. Simple as that.  SO, I started sending panic-y emails to my closest friends, my confidants.

One old friend reminded my of an important distinction, the one between panic and urgency.

I think there are a lot of business owners who are veering precariously close to going into panic mode – and that is hurting them.

Urgency is a whole lot better.

And the article my old friend pointed me to?

 

http://www.feld.com/wp/archives/2009/01/the-difference-between-panic-and-urgency.html

It may not be Business As Usual … for a while

For a very long time one of my consulting specialties had to do with helping companies plan for turbulent times.  We *used* to think we knew what turbulence was…  While the specific methods could get us bogged down in really silly-sounding ‘consultant speak,’ one of the most important things we argued was that the future is NOT going to be like the immediate past – except more so …  

We see this everywhere. In boom economies, breathless enthusiasts tell us that Everything Is Different Now — that only Old Farts and zombies from The Last Century worry about, oh, profits and cash flow.  And in troubled times, we start seeing events that conjure up scenes of Dustbowl Depression and Grapes of Wrath.  

Look.  Neither is right.  

That said – the profession of business brokering needs to face the current reality:  a large share of its regular clientele, Main Street Businesses, is nervous.  People are holding tight.  

 

There are a lot of businesses, often Main Street stuff that go up on the sales block.  I think there’s some (suspect) factoid that at any one year in the US, there’re nearly a million companies held up for possible sale. 

One of the intro sidebars in this blog is the factoid that any any time, there may be up to one MILLION small businesses on the sales block.  Now, the dirty secret is that most don’t get sold.  And – no sale, no commission.

 The flip side – for every business that wants to be sold, there’re (I’m guessing) a number of serious potential buyers.  So – the numbers are better. If there’re a million businesses for sale, there might be X-million potential buyers.  BUT – conventional wisdom (and custom) is that these people are trotted around by business brokers – for free – to see or hear about potential company opportunities. 

 For Main Street company buyers (or, tire-kickers) free service is the industry norm. 

 BUT, two factors might be at play here – making conventional wisdom about free-service-for-buyers a bit less inflexible.

 On one hand is a changing demographic for buyers.  Boomers who’d had successful corporate careers, who’ve acquired business savvy along with nest eggs, might be the next big wave of company buyers/entrepreneurs. These are buyers who would benefit from a bit of ‘buyer coaching.’  Services that do ‘opportunity-searches,’ that help assemble management expertise (or that sub out research that the potential buyers have to do but don’t really want to do it themselves), hand-holding through the loan application process, helping potential buyers see mid- and longer-range strategic business opportunities, even professional and managerial coaching to bring corporate-smart potential buyers up to speed on business specifics that they’ll need to be successful.  ALL of these could be a la carte consulting services for a ‘new’ kind of business brokerage profession.

 And on another hand – the nature of the buying clientele changes when a business brokerage  goes ‘upstream’ in terms of business size. That becomes a world where brokers deal with individuals working on behalf of other (wealth managers) and small groups (PEGs, angel investors) who expect a greater level of service in helping locate opportunities. AND, as professionals who sell their services, I’ll bet they’re comfortable with the idea of paying for professional services.

Some of those services could be borrowed and modified for this class of buyers:  ‘strategic recasting’ for example.  AND, most likely, these are potential buyers who would see tremendous value in acquisition ‘scouting.’ 

These are possibilities.  Spit balls of ideas.  And as such, a lot easier to talk about than to implement.  (there are even professional guidelines on how licensed business brokers may or may not help clients and from whom they can accept money.  

These are times when creativity can be rewarded.  Doing what Every Other Business Broker does is a tough way to ride out this economic slowdown.  Who will come up with new ideas, new products and services, ways to broaden customer bases?