Posted by: rongeri | October 12, 2009

The Challenge of Changing Times–Part I

 

 

A Functional Business Global Positioning Satellite System

To Meet The Challenge of Changing Times

IMPORTANT INTRODUCTORY NOTES:

 This article consists of several sections, with a few pages in each section. The sections are independent of each other and do not have to be reviewed in order, so if, for example, you are only interested in the  secton on Eight Rules To Use, feel free to go to that section first, or if you are only interested in the Fifteen Action Steps To Take, then feel free to go to that section first. Here are the sections:

Section                                                                                        

   I.            Introduction                                                    

II.            Are the Times Challenging? How Do You Know?                                     

 III.        Your Business Model and Value Proposition    

IV.         Diagnostics                                                                                                              

 V.            Basic Business Economics Principles for Becoming a Master Business Chef   

 VI.            Two Examples of Entrepreneurial Product Innovation                                    

VII.            Eight Rules 

VIII.            Fifteen Action Steps 

 IX.            Closing Thoughts                                                                                                   

 This article has two options for viewing so that you can select the one that fits your personal preference.

O ption “A” is for those who do not like to see detail and would be distracted by it. Option “A” is the presentation in its present form, with richly packed supporting endnotes.

 Option “B”, is for those who like to see detail and are not distracted by it. Option “B” is the presentation with richly packed supporting footnotes, enabling you to “see a detailed whole picture” at a glance.  To view the presentation in that format, simply download the presentation, save it, and then simply convert the endnotes to footnotes.

 I.          INTRODUCTION

 “If you don’t know where you are going in business…,

any road will get you there” (Old New England proverb)

you’ll end up someplace else” (Casey Stengel),

you’re lost(Yogi Berra), and

…“you will soon be out of business.” (Reed-Brown Consulting Group)

 “ One way to get to where you want to be is to find a good map 

and a smart guide….. 

[We are] all explorers. 

We have to beware of waterfalls. 

Some will have a sense of how to navigate…

Others will drift along placidly…

Till the water gets rough and murky…

And the bottom suddenly disappears.

Those who approach waterfalls in canoes…

With no map…

Are unlikely to survive if the waterfall is really high.[i]

 “It’s plenty tough out there. All the more so for small businesses, which run on gumption and grit during the best of times and must embrace any imaginative means just to survive in the worst.”[ii] 

 “There are three fundamental decisions facing any business in good times and bad: where to play, how to deliver, and how to win.”[iii]

 “[We] have to be thinking more expansively about where we’re going and how we can encourage …innovation to get us there.”[iv]

 “Every morning in Africa, a gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed. Every morning a lion wakes up. It knows it must outrun the slowest gazelle or it will starve to death. It doesn’t matter whether you are a lion or a gazelle. When the sun comes up, you’d better be running.”[v]

 In general, a Global Positioning Satellite System (“GPSS”) tells you where you are on earth. A GPSS is most commonly used in a car or truck. The following user’s experience may be typical:

 “I love GPSS. Because I often talk on the cell phone when I’m driving, I can easily get lost, even in my hometown. When I’m out of town, it’s literally impossible for me to go anywhere without missing a number of critical exit ramps or turns. GPSS has changed everything for me. I no longer have to look at a map, because a nice lady’s voice guides me to my destination quickly and efficiently. If I’m in the wrong lane and miss a turn or an exit, she instantly tells me that she’s ‘recalculating’ and directs me to my destination in spite of my mistake. How does the GPSS work? Quite simply, the GPS satellites have a perfect bird’s-eye view of the car I’m driving, my current location, the destination I’m traveling to, and every street and turn along the way. It can calculate the best route for me to take. Because I have my own mind and will, I sometimes stray from the path (or forget to turn the GPSS on). But when I’m lost or stuck in traffic, I turn it on; it picks up my signal and quickly directs me to an alternative route to my destination as efficiently as possible.”[vi]

 In addition to their use in cars and trucks, GPSS are being used in a variety of new contexts, including being used to help look for shipwrecks, being used to assist in settling property disputes, and even being mounted on screens in golf carts, enabling the golfer to see the distance from tee to green.[vii]

 There are business tools that can function like a GPSS and which, when employed correctly, can assist a business person in successfully navigating during challenging economic times. In traditional applications, a GPS simultaneously answers four questions[viii]: (1) Where are you? (2) Where are you going? (3) What’s the best way for you to get there? (4) When will you get there? A functional BGPSS should provide quantitative answers for the questions of where are you, where are you going, and when will you get there. Your business model should provide answers to the question of the best way to get there. In addition, some of the functional information of a BGPS and the entrepreneurial economics it encapsulates may also be partially captured by proxy in an executive business dashboard[ix].

 If your business stays still and does nothing to respond to the challenge of changing times, you might find your business very much like the saber-toothed squirrel who refused to let go of the acorn in the Ice Age films or like one of the three million fossil occupants of the Rancho La Brea Tar Pits in Hancock Park near the Miracle Mile district of Los Angeles: stuck in a near or actual state of extinction. In order to know where your business should move, and how fast it “better be running”, you need a Business Global Positioning System (“BGPS”).

 Usually, when the phrase “business entrepreneur” is used, we think of someone who starts a new business venture. However, in addition business entrepreneurs, we also have developments such as venture philanthropy funds[x], not for profit entrepreneurs[xi], as well as social entrepreneurs[xii].  Here are some examples of social entrepreneurship:

“A social entrepreneur engages in the same tasks as an entrepreneur, but in the nonprofit arena…Being entrepreneurial about social issues can be accomplished in a variety of ways. The most obvious is to run a not-for-profit organization in innovative ways that create funding for their programs or create employment opportunities for their clients. Non-profits have added some fascinating innovative twists to this model. Some examples are homeless shelters that start businesses to train and employ their residents; the Women’s Bean Project that gives job training, GED tutoring, individual counseling, internships and job placement to ‘at-risk’ women while employing them in manufacturing and distributing bean soup and salsa mixes. The sales of the mixes cover 80% of job placement.”

 These other forms of entrepreneurship reinforce understanding and appreciation of the fact that “entrepreneurship is not only about hotshots taking companies public. A lot of entrepreneurial activity …is in the exercise of getting things done more efficiently and creatively in response to constraints that people find themselves in.”[xiii]

 Though this article focuses on business entrepreneurs, many of the ideas, principles, thoughts, and suggestions could also apply to these other forms of entrepreneurship, and the challenging of changing times that those other forms of entrepreneurship face. For example, challenging economic times not only impact individual and institutional portfolios, but also the actual ability and psychological readiness of donors to provide financial support to non-profits.


[i]           As The Future Catches You, by Juan Enriquez, at 11-12

[ii]           Forbes, April 13, 2009

[iii]          “Creative Entrepreneurship In A Downtown”, Q &A with Bhaskar Chakravorti, Harvard Business School, Working Knowledge, February 23, 2009. Bhaskar Chakravorti is senior lecturer in the Entrepreneurial unit at Harvard Business School, a partner in McKinsey & Company, and a leader of that firm’s Innovation practice.

[iv]          The McKinsey Quarterly, April 2009, “Surveying the Economic Horizon: A Conversation with Robert Shiller”. Robert Shiller is Arthur M. Okum Professor of Economics at Yale University and a Fellow at the International Center for Finance at the Yale School of Management.

[v]           Kenneth Chenault, Chairman and CEO American Express Co, in Take A Lesson, at 8. Caroline  V. Clarke, editor

[vi]          Steven K. Scott, The Greatest Man Who Ever Lived at 11.

[vii]         For example, GPS Industries INFOREMENT golf product not only gives the distance from tee to green but also includes a fly over view of the hole such as you might see during a televised pro golf tournament, on screen golf tips from pros (‘This three shot par 5 is uphill till you get to the green. Ideal lay-up shot will leave you on the right side of the fairway to avoid a deep bunker in front of the green on your 3rd shot’), a menu screen from which food and  beverages can be order ahead of the turn at the ninth hole with the total charge displayed, a feature which allows a  messages to be sent from the clubhouse, for example about pace of play, and also has screen space for advertising. Some golf course owners buy the product, others lease it, and still others lease and share in the advertising revenue stream. Here is a link to a CNBC Video about the GPS Industries’  INFOREMENT golf product : http://www.gpsindustries.com/media/cnbc_segment.html

[viii]         Adapted from “Everyday Mysteries: What Is GPS and How Does It Work.” http://www.loc.gov/rr/sci/tech/mysteries/global.html

[ix]“         Performance Dashboard”, Bain & Company,  (“A Performance Dashboard is an integrated measurement system, often put in place to track the progress of a new strategy or change program. It can show the completed and in-process steps, illustrate the critical path for a project plan, as well as indicate resource consumption and overall timeliness relative to goals. Ideally, monitoring and feedback systems are designed to tie directly to corporate financial performance issues such as return on equity.” )    

[x]            “Social Enterprise”, Small Business Notes. www.smallbusinessnotes.com (“One of the most promising developments in social entrepreneurship is the emergence of ‘venture philanthropy’ funds. Under the venture philanthropy model, an organization funds and helps guide nonprofit organizations in planning, launching and managing new programs that are designed to provide ongoing funding for the organization. While primarily supported through donations, the funds also generate income through loan generation fees, interest on loans, cost-sharing fees for consulting services, and interest income on cash balances.”)

 [xi]          “Social Enterprise”, Small Business Notes. www.smallbusinessnotes.com

 [xii]         See  V. Kasturii Rangan, Herman B. Leonard, and Susan McDonald, “The Future of Social Enterprise”, Harvard Business School Working Paper 08-103 .

 [xiii]         Martha Lagace, Interview with Tarun Khanna, author of Billions of Entrepreneurs in China and India, Harvard Business School, Working Knowledge, January 28, 2008.


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