Business ventures should never be set up without a clear and comprehensible intention. This purpose gives all activities one direction. The most profane is to win. However, the intention does not always have to be the first, the fastest, the greatest, or the pressure to grow steadily. The direction could also be a fitter company, or better utilization of existing resources, or more satisfied employees. If people do not agree on one direction, any success can be undermined by concurrent disparate efforts by the various parties. That is why the intention considered by all parties is an important prerequisite on the way into the future.
The intention is somewhere between growth and contraction (horizontal axis) and between the gradual change of first order and the radical change of second order (vertical axis). Put simply, the following intentions arise.
Making the current business more robust doesn’t sound very exciting. The protection of viability on the basis of the available means is a good measure to experience the future. For this purpose, existing offers can be developed, better placed or advertised. Additionally, the chosen value discipline (customer, product or process orientation) can be further applied.
As long as the revenue has good prospects, this is a reasonable approach.
Business can be made fit for the future by leveraging existing core aspects, offerings, sequences and capabilities and by mobilizing existing skills. For this purpose, the image of the company is polished up, the culture is described or the entrepreneurial awareness of the employees is refreshed.
It is a question of making greater use of established paths with the current range of offers.
When adjacent fields of business are identified and decisively developed, new work contents, forms and fields of activity emerge. This is made possible by continuous creation, cross-functional cooperation and shifting the boundaries of end-to-end operations.
The closer surroundings of the own field of activities are easily accessible and offer direct contacts for the add-on of the own assortment.
When you leave the comfort zone of the previous market, completely new possibilities open up. New business can be exploited and previously unnoticed partners can be found. In the end, this changes the building blocks of the business. Everything starts with radical BPR, the invention of new portfolios and the opening of completely new customer groups.
Such developments are driven by personalities, who have a clear idea of what they can additionally do for their customers.
If the entrepreneurial body suffers from overweight and the incomes do no longer cover the current enterprise, a thought-out compaction of the activities is inevitable. The whole thing should not be torn into the abyss – e.g. closure of plants, losses or bankruptcy. This is made possible by abandoning tasks that no longer contribute, because they are obsolete or simply no longer in demand. Tasks that are not part of the core business are outsourced.
Superfluous business and routines are proliferating, if you don’t notice the need for action and don’t take early care to shift capacities.
When all measures have been exhausted, economic collapse will occur sooner or later. In the interest of all those involved, the orderly task or separation of individual areas or locations is the last resort, if it enables employees to make a secure transition to new tasks.
Due to the early dissolution, external entrepreneurs may find ways to continue the business under different premises.
Bottom line: It may seem strange that the intentions can always be condensed into the six directions described. As soon as you start selecting the direction, you will quickly notice that nerve-wracking discussions are being replaced by joint plans. The distinct intention should be clear to every manager and every employee and the areas should be aligned in a common direction. It is the ONE intention behind any effectual strategy.
All activities need a compass to align with. The first thought of many strategists is to win. However, that does not always mean that you are the first, the fastest, the greatest, or that you have to grow constantly. The desired impact direction might be a fitter company or better utilization of existing means or happier employees. The selected alignments can be undermined by different simultaneous directions. The impact direction is therefore an important basis for the design of the future.
The common direction can be found between growth and contraction (horizontal axis) and gradual first order change and radical second order change (vertical axis). The following options arise.
Making the current business more robust doesn’t sound very exciting. Securing viability on the basis of available means is a good preparation for the future. For this purpose, the offers can be enhanced, better placed and advertised. Or the chosen value discipline (customer, product or flow orientation) persistently pursued. As long as the turnover has good prospects, this is a reasonable approach.
If the existing core aspects, the offers, flows and skills, are expanded, it favors the business. For this purpose, the corporate image is revamped, the culture is described and the entrepreneurial awareness of the employees is refreshed. It is a matter of better utilizing the current palette on the bogged down paths.
If neighboring areas are identified and expanded, new work contents, forms and market areas emerge. This is made possible by continuous design, a wide variety of cross-enterprise teamwork and the shifting of the boundaries of end-to-end procedures. On closer look, additional sources of income can be found in customer touchpoints.
When you leave the comfort zone, different options open up. New trades can be revealed and thereby common tasks shared. In the end, the building blocks of the business model change. The whole thing starts with radical redesign of the flows, the development of new product lines and the disclosure of completely new customer groups. Such developments are driven by individuals, who have a clear idea of what else is imaginable.
If the enterprise body suffers from overweight and the incomes do not cover any longer the current expenses, a thoughtful compression of the activities is inevitable, if the whole does not want to be dragged into the deep. This is made possible by the sacrifice of certain tasks, the bundling of the core business e.g. in which regular handlings are outsourced. Needless business and routines arise, if you are not prepared to take care of them at an early stage.
When all fitness measures have been exhausted, sooner or later economic collapse will occur. In the interest of all involved people, the orderly surrender or separation of individual areas or locations is the last resort, if it enables employees to make a secure transition to new tasks. Early dissolution may allow external enterpriser to find ways to continue the business under different premises.
Bottom line: It may sound strange that the common alignment can be condensed for all cases into six possible directions. Once you have performed the clarification of the direction beforehand, you will quickly notice that debates on principles are replaced by joint plans. The unambiguous intention should be clear and all areas should be aligned to one direction. Before any strategizing it requires the one thought.
Platforms allow nowadays new business models. While in the past a business had to build the necessary infrastructure itself, today it is possible to use facilities and organizations to implement the own business idea.
- Authors use services such as Print on Demand to publish their books without a publisher.
- Freelancers find their orders through appropriate online platforms.
- Small business owners can rent phone services that allow customers to access the small company or schedule appointments.
- Repair meetings or repair cafés use platforms, as The Restart Project, to reach the users.
You can already use a Fab Lab, in order to produce the own product (without the need of creating the appropriate production facilities). The potential applications are limitless. What are the challenges for such platforms?
A platform behaves like a natural organism, which is constantly fighting for survival in its environment. For this purpose, the following challenges should be mastered.
- Exploiting network effects
Everyone is in contact with everyone through the internet. This allows exploiting network effects. That way all protagonists of the platform have a wealth of knowledge at their disposal: publications, events, contacts and market information. That reaches as far as to a broad-based investigation of the wisdom of the crowd via forums and virtual events. In order to get the full impact of the network effects, it is important that not only biased offers can be found, but also complementary product ranges, which pursue additional approaches. The more interesting and diverse the platform is prepared, the more providers and customers are attracted and trigger the network effects.
- Activating protagonists
The entry threshold of a platform should be as low as possible. This can be achieved with a free membership that, for example, allows getting to know the entire offer in the first month for free. In order to involve the protagonists, contributions should be rewarded with bonuses and other incentives. Regularly changing competitions and special offers pull interested users again and again into the platform. Once a protagonist mediates between different people, this can be rewarded by monetary or other benefits.
- Offering choices
As soon as the users understand the platform, the widest possible variety is an advantage: not just accommodations in Berlin, but all over the world. In addition, the platform becomes interesting through contact people in the various areas, as it makes the technical websites more personal. The structure of the platform is a collateral benefit, since it promotes an indirect influence on the creation of mental models among the users. Appropriate search engines, glossaries and wikis offer users professionally focused information that pulls them constantly onto the platform.
- Mastering the Tipping Point
The first platform users find only few other users and above all just a few offers. Over time the platform gets filled and then develops a life of its own. The point, at which the numbers of users exponentially grow, is the tipping point. Facebook had reached this point after three years. Until then, a lot of effort is needed from all people concerned, so that the platform does not collapse before it reaches fruitful user numbers. In order to avoid this, platform providers do everything they can to attract interested parties with as little hurdles as possible to enter the platform: free membership, great value at low cost, and an interesting start-up of content through the cooperation with content providers.
- Developing continuously
The efforts to expand the platform must be made by all three protagonists. The providers should continuously expand their existing offers and product range. Users contribute to the page’s attractiveness with their forum posts and content provision. The operators are in charge to continuously enhance the platform with additional functionality and the linking of existing contents. The more dynamic the platform evolves and grows, the more new protagonists are attracted.
Bottom line: Platforms do not automatically achieve the desired effect. The platform providers face the challenges of exploiting the network effects, activating the protagonists, offering a wide variety of choices, mastering the tipping point, and eventually enhancing the platform continuously. Only the proactive management increases the likelihood of coping with the tipping point and the other challenges.