Shedding Business Irrelevance

Published on 20th November 2007

The world is dynamic, and so are the principles of doing business. The traditional model of maximizing on capital, land, labor and entrepreneurship has become obsolete. New rules and emerging technologies are spinning current thought in the world of business and changing the way the world thinks about profit and survival. Better still; the emerging new economies represent a tectonic upheaval in our commonwealth, a social shift that rearranges our lives. Business nowadays has its own distinct opportunities and its own new rules. People playing by the new rules will prosper; those ignoring them will not.

 

Kelvin kelly, a business consultant argues that the new rules governing the global restructuring revolve around four pillars. Wealth in this new business regime flows directly from innovation, not optimization; that is, wealth is not gained by perfecting what is known, but by seizing what is unknown. The ideal environment for cultivating the unknown is to nurture the supreme agility and nimbleness of business networks. The domestication of the unknown inevitably means undoing what was perfected. In the thickening business web, the cycle of "find, nurture, destroy" happens faster and more intensely than ever before.

 

Business owners should know that success is nonlinear. During its first 10 years, Microsoft's profits were negligible. Its profits rose above the background noise only around 1985. Once they began to rise however, they exploded. This is what is happening to Equity bank in Kenya. Very few people knew the Bank’s activities in the 90s but now, Equity Bank is a household name. 

 

Significance precedes momentum. In epidemiology, it is the point at which a disease has infected enough hosts, moving from local illness to raging epidemic that can be thought of as the tipping point. Take notice of the mobile phone industry, for example. Safaricom (I am  told) had not budgeted for the current number of subscribers but because what they sold had significance in our lives, everybody has contracted the disease of being ‘connected’ even when service utilization (say for school children) is low.

 

The other thing to know is to anticipate the cheap. Through most of the industrial age, consumers experienced slight improvements in quality for slight increases in price. The arrival of the microprocessor however flipped the price equation. The price and quality curves are diverging so dramatically that it seems the better something will be, the cheaper it will cost. The cost of motor vehicles for example, will obviously come down, making them accessible to most people. The share prices of motor companies will on the other hand always soar.

 

Business may involve freely giving out something initially with a view of making it relevant in the minds of clients and customers, such that the spread of the product becomes self-fulfilling. Once the product's worth and indispensability is established, the company sells auxiliary services or upgrades, enabling it to continue its generosity and maintaining the marvelous circle. Most people have free yahoo and gmail internet accounts. The companies hosting them are top earners in the world through selling advertisement space, an auxiliary service.

 

To succeed in business, you must learn to position yourself strategically. Business networks depend on each other for survival. Think of your Toyota automobile without Kenol/Kobil fuelling stations. Most importantly, feed the web first. The distinguishing characteristic of business networks is that they have no clear center and no clear outer boundaries. The only "inside" now is whether you are on the network or off.

 

Learn also to re-invent yourself. You must possess a creative mind. Just like Kelly notes, big money flows from innovation- not optimization. Currently, the sudden disintegration of established domains is as certain as the sudden appearance of the new. It is not long ago when we were told that analogue TV sets are now obsolete and are being replaced by digital ones. This is the kind of drift I am envisioning. The internet basics are a must know for almost all commerce is jumping onto the Internet. Everybody is talking about e-commerce, websites and that kind of thing. This is the future of world business. 

 

Some people are lucky to be in careers where they solve problems for the boss the whole day. Your ability to solve social and economic problems will be limited primarily by your lack of imagination in seizing opportunities. Learn to develop your sense for smelling opportunities. There is always a way that this can be done without killing the trust your company has in you. Outsourcing companies are an example.


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