Are you, or want to be, a game changer? Do you use the power of your ideas and connections to grow and change? Watch Nilofer Merchant, strategist and author,” in one minute tell Harvard how the way we do business is changing:
We don’t create value on our own but when we connect with other entities, people and ideas. People who master networking will be thriving in the social era.
The power of networks
How many networks do you belong to on and offline? Admittedly far from all networks are useful. They have to consist of people with shared interests and goals in order to produce returns and serve our needs.
Unfortunately there are plenty of networks consisting of individuals who just talk and seem to be stuck on the same treadmill forever. Such networks, needless to say, will not produce results. When it comes to networking, action definitely speaks louder than words.
Connected individuals taking over from institutions
It’s almost strange, isn’t it, that power today more and more comes from individuals connected in some way at the expense of institutions. Personally believe that’s a wonderful development. And it gets even better because because we can create value by connecting to individuals who are not working in our company. We can, for instance, hire a consultant at the other side of the world who can carry out work for us without leaving his/her home.
Let your customers have their say
Making your customers part of your innovation process is a wonderful aspect of the social era. How do you connect with your customers?
It’s also interesting that it’s mainly our values and goals that unite us in the social era. Not a company or product. It allows us to organise companies to be more fluid, work faster and increase their market share.
Isn’t it time to stop thinking in old ways and adapt to our new reality – the social era? We don’t need to work out of an office anymore. Maybe it’s time to to re-define what an organisation looks like and how it is structured? More and more individuals have their own company and successfully cooperate with other business owners as if they were one organisation. Do you agree that the amount of business owners working together along those lines will continue to increase? Are you operating that way? If so, what are your experiences?
For decades governments that dared to challenge the IMF model swiftly found themselves out of favor in Washington and other Western capitals.
Capital inflows are not always beneficial for a country, the IMF concludes.
But the financial crisis that started in 2008 prompted a new debate over free market policies and IMF ideology. So now after sixty years of zealously insisting on free market economic policies, the International Monetary Fund has traded its dogmatism for pragmatism, it seems.
IMF admits mistakes
It recently admitted that their policies for bailing out Greece has caused a lot of damage to the country. The IMF estimated that unemployment would go as high as 14% but it has now gone as high as 27%.
Capital controls cab be beneficial
The IMF has acknowledged that in some instances, developing countries might actually benefit from controlling how much foreign capital enters their economies — and how it’s used. After examining the experience of governments that have regulated capital flows, the IMF concluded that such policies helped reduce “financial fragility.
There is no surefire one-size-fits-all way to deal with the impact of potentially destabilizing short-term capital inflows. While controls can be helpful to individual countries under certain conditions, their widespread use could have deleterious effects on the efficient allocation of investment across countries, and harm prospects for global recovery and growth.
Glad to note that the IMF seems to have adapted a more flexible approach. Governments all over the world have complained to me about the inflexibility of the institution. Maybe in this respect something good came out of the global crisis? Plans are important, but we always have to be flexible about how to reach our goals. Do you think the new IMF flexibility will have a positive impact on global recovery and growth? Or is it just temporary and sooner or later they will become dogmatic again? Maybe it’s actually your opinion that all countries should stick to free market policies no matter what? Even when, as in Greece and Spain, unemployment hits 27 %? Photo: Flickr – businesspictures
Everything and everyone is a product. A country, city, company, product, service and a person. And how the market perceives the product determines its value. It’s sounds cynic, I know. But if you want to be valued and sought for on the market you have to on a continuous basis make sure your brand is in demand and sells.
Does Chanel have a higher turnover in the developing world than in the West? Most likely. But since it’s a private company the information is not available.
Innovating and updating your brand
When a product is a success all of a sudden the brand matures, growth slows and it comes under pressure from competitors. Europe and the US at the moment are good examples. That’s the time to start innovating and spending again if you want to defend your market position. If not, don’t complain if you lose out to your competitors.
Nothing ever stays the same – not even Cornflakes
You may object that some brands, like Cornflakes, or Chanel for that matter, have been around for a long time. But what we buy today is very different from the same product 50 years ago, not least when it comes to packaging and design. If your brand is out of date you will have to make an investment and innovate yourself. How you want to be perceived depends on what market you are aiming for.
The West needs to get their attraction back
When it comes to countries and continents, Europe and the US have matured and competitors are moving in. But the West seem to take their current status for granted and are not doing enough to defend their market position. What happened to innovation and making their markets more attractive to investors, not to mention more business friendly?
The West is losing out
The market is irrevocably global. That does not mean the concept represent the best of worlds. But the West will continue to lose relative power as a result. It’s ironic isn’t it that thanks to its generosity in exporting the secrets of success, China and other emerging giants are catching up.
Developing nations are not going to cede power to the US and Europe out of gratefulness. So the West needs to face up to reality – their brand is losing out. It’s time to innovate and make it profitable for businesses again to stop them moving to other parts of the world. If not, the West will gradually trade places with the developing world.
No matter how smart we are, as entrepreneurs what we have on day one is a faith based enterprise. Devote one minute and forty two seconds to hear what Steve Blank, serial entrepreneur and Stanford consulting professor, has to say about swiftly turning your vision into a sustainable business model:
Startups are, to quote Blank, religious enterprises. Catch is 95% of the time entrepreneurial visions are hallucinations. And as we all know, entrepreneurial minds are prone to have ideas the world is not yet ready for. It’s hence of essence to make sure we are not ahead of time. Or simply have an idea the market does not want.
So how do entrepreneurs swiftly find out if they are hallucinating?
Steve Blank’s suggestion is to break down the vision into a business model. Then get out in a fairly formal way and test your hypothesis with your customers.
Why should we test our visions?
Because we are not smarter than the collective opinion of our customers, is Steve Blank’s answer. And he is definitely right about that.
If we find out that we are wrong we then make minor changes or, if necessary, a pivot, i.e. a substantial change, to one or more of the business model components. Then we keep on making minor changes or pivots until we have a sustainable business model.
The alternative is to passionately go ahead and try to make an idea that’s not sustainable succeed. Far too many entrepreneurs make that mistake. Some even go bankrupt as a result. Probably most frustration is caused by having ideas that the market isn’t yet ready for. Not least because someone else will launch it in the future. Testing your hypothesis enables you to wait until the timing is right and do something else in the meantime. Or, if possible, gradually launch your idea.
Do you agree with Steve Blank that 95% of the time entrepreneurs are hallucinating? Is it essential to go out and test your hypotheses with your customers? Have you ever tested your visions the way Blank suggests? If so, did you make changes the way he recommends and ended up with a sustainable business model? After hearing what he has to say, will you now go out and test your hypothesis and then make the changes necessary? Or are you of the opinion that the vision you believe in will succeed, provided that you work hard at it?
Empathetic leaders are in high demand in the US. In the Nordic countries however, where empathy is an aspect of leadership, the debate is instead if leaders have become too compassionate.
How empathetic should a leader be? Will future leaders be compassionate or firm?
Is the grass always greener on the other side?
It seems you can’t win. Isn’t it interesting that when empathetic leadership is the norm, it’s benefits are being questioned while in countries with less considerate leadership styles it’s considered ideal? Some Americans even go as far as stating that the era of empathy is upon us.
Empathy a handicap?
In the Nordic countries empathy has long been part of management. Leaders have had to be considerate, weather they wanted to or not. Now however, some Scandinavians argue that being considerate is a weakness because it makes it hard to be firm and take tough decisions.
The ideal US boss is empathetic
Harvard Business Review concluded that empathy is high currency for a leader as is softer and more compassionate leadership styles. When it comes to CEOs being considerate, understanding and sympathise with employees and their feelings is considered optimal.
If you google empathic leader and empathetic leadership you get about 6,500 hits. And in general they are about leaders needing to be more considerate. The author Daniel Pink in his book “A whole new mind” writes that in the future empathy will be crucial for success.
Scandinavia a step further?
So have Sweden and Norway with their generally speaking more empathetic leaders taken the debate a step further by questioning if it’s a handicap? Or is it a step back to question if leadership have become to considerate?
Some claim that considerate leaders worry too much and can even be negatively affected by their environment as a result. If so, does that handicap them as leaders?
It’s common sense that leadership is facilitated by compassion. But taking the current debate in Scandinavia into account, maybe empathy combined with an ability to take tough decisions when necessary is ideal?
Most leaders either adopt a persona that’s excessively tough or overly empathetic, or feared or loved, if you like. Obviously neither leadership style is ideal. Maybe a leader focusing on helping other people to achieve their full potential would be best? A happy medium is obviously the ultimate but how many leaders are both compassionate and tough?
Do you believe empathy is an asset or a handicap for a leader? Will we see more empathetic leaders in the future? If so, will the considerate trend then, like in Scandinavia, be questioned because such leaders worry too much which has a negative effect on their ability to manage? What lies ahead for leadership? Will it, like it always has and still is, be a mix of different kinds of leadership styles? Empathetic – to be or not to be – that’s the question leaders have to ask themselves. Or maybe the debate about the ideal leader has gone to far? The different debates going on in the US and Nordic countries certainly makes you wonder, doesn’t it? Maybe it’s time to accept that leaders are different and empathy works for some and not for others?
Former British Prime Minister Tony Blair was adviced by Bill Clinton to schedule time to think strategically on a regular basis. Watch this short video of him talking to Garth Saloner, Dean of Stanford Graduate School of Business, about Clinton’s advice:
What Tony Blair has to say applies to all of us, no matter what we are doing. Not least when we run our own businesses. It’s easy to devote all our time to dealing with day to day business and forget about how to reach our goals.
Have events taken over your life?
If so, you are not alone. Apparently most people in high positions spend less than 5% of their time dealing with their priorities. Above all we lose our grip on strategies when dealing with a crisis.
Did Bill Clinton give Tony Blair good advice? Do you schedule time for strategic thinking on how to succeed with your priorities? Is finding time to do so hard? Have you noticed what a difference it makes when you find time for strategic thinking? Have not done so yet, maybe it’s time you do?
Well you can. And it’s not expensive. Watch this short video of Michael Kofsky talk to Keller Rinaudo, CEO of Romotive about their smartphone robot:
Talk about innovation. Until now a robot would have cost you somewhere between $10-50k. But now all you need is a smartphone and $150.
Do you need a robot?
So the big question is do you need a robot? Do you need to increased automation on an assembly line, a drone, explore the site of a nuclear disaster, enter active volcanoes or perform completely sterile surgeries from a location far from the operating room? Maybe for your business but most likely not in your private life.
In your home a robot can actually do the housekeeping, clean the pool, iron your clothes, entertain your kids, massage you and bring coffee to your guests. Maybe the smartphone robot isn’t yet able to do that. But in the future we are bound to find cheap robots that can do all that an expensive robot can do today.
Do you believe the smartphone robot is a sign of the future of robotics? Would you like to have a robot? At home or at work? Do you like this kind of innovations? Could robots take over more of what human beings do today? Is this a good development? A bit of Catch 22, isn’t it? Am all for it, but if robots, and other technologies, take over more and more tasks human beings currently do, what will be left for us to do? Imagine if robots take over what maids and cleaners do today on a world-wide scale. A huge section of humanity would be made redundant. And how would we create other jobs for them? Or maybe robots will create jobs?
No, it’s not a joke. The Economist were debating if the economy would be better off without MBAs. Have some fun and watch, or rather read, this short video on opinions voiced in their recent debate:
The video speaks for itself and looks at both sides of the coin.
Needless to say the debate took place because MBAs are blamed for calculating financial instruments that contributed to, or caused, the financial crisis.
Do you agree with the The Economist and Bloomberg Businessweek that it’s 50-50 if an MBA makes a difference or not? Or are you of the opinion that MBAs are good for the economy? Or do they harm it? Would we have avoided the recent financial crash if MBAs had not made faulty calculations? Or would it have happened anyway? Maybe a bit later? Should companies keep a close eye on MBA students straight out of university to avoid faulty calculations? Or should they be allowed to be as innovative as possible?
Being a leader is different from being a manager and Jack Welch is right when he says that leaders are born and then develop by learning. IQ and energy we are born with. What we call charm and charisma is actually energy. And having that kind of energy is a crucial aspect of a natural leader that people follow without even realizing it. So much so that natural leaders, unlike managers, don’t even need to ask people to do something, merely suggest and people follow.
Would Mandela have achieved what he did if he was just an educated, but not natural, leader?
Charming people actually make others feel satisfied with themselves. Most women fell in love with JFK and the majority of men did anything they could to make him happy. And that’s exactly what happens with natural leaders.
How do you change your energy?
Leadership also comes from education and training but the “cherry on the ice cream” that, for instance, JFK had can not be learnt. Another word for it is star quality, but you are either born with that kind of energy or you are not. And without it leadership is much more difficult.
A good example is the difference between Nelson Mandela and his successor Thabo Mbeki. The latter is one of the most intelligent people I have ever met, if not the most intelligent. But Nelson Mandela, like, for instance, Bill Clinton and JFK, fills up the room. Mbeki does not and hence failed to make the amazing connection with the South African people, and people around the world for that matter, that Mandela has.
Leaders make others feel good about themselves
Like all effective leaders, Mandela makes others feel good about themselves as well as the work they are doing. He has a vision of what he wants to achieve and can communicate it to others in ways that makes them want to be part of it.
Passion is crucial to leadership
Back in school we all had teachers that were natural leaders and passionate about what they were doing. Even without being told what to do, we loved what we were doing, learnt a lot from them and got high grades. Don’t need to mention all the terrible teachers we had that made us fall asleep and loose interest in the subject. And they were all educated and trained to teach.
Emotional intelligence makes a difference
In many companies today people who are not born leaders are in charge and it is definitely having a negative impact on their results. Managers who are also leaders use their influence to coach and mentor others to make the most of their potential. They are more likely to be strategic and integrated planners, thus spending less time putting out fires and more time streamlining and planning ahead. In general, employees are more attracted to managers with excellent leadership skills as they are more emotionally intelligent.
Why are natural leaders not better utilized?
Personally I can not understand why educated natural leaders are not better utilized in business since they would really have a tremendously positive impact on results. In some companies top management unfortunately feels threatened by natural leaders who are hence not allowed to lead. Can’t help wondering what shareholders would have to say about that if they knew? Another reason is that the first step in evaluating candidates usually is looking at their CV/resume. And there is no way of judging if a person is a natural leader or not just by looking at their CV. So by the time top management meets the candidates for a C-level position there often isn’t a natural leader amongst them.
Imagine the massive positive impact more educated leaders to whom leadership comes natural would have on companies world-wide. Results would increase significantly while at the same time making employees happier to work.
Let’s hope we will see more educated people with leadership qualities in key positions. Why this amazing resource is overlooked I can not comprehend. It is a fantastic asset that should be utilized to its full potential. Eisenhower put it very well when he said “you do not lead by hitting people over the head – that’s assault, not leadership”. And in today’s world we really should be civilized enough to move beyond that.
How companies communicate with investors is changing. In this short video Elizabeth Blankespoor, assistant professor at Stanford, explains how smaller firms can benefit from using Twitter:
Got some news that the market should know about, tweet it. According to Elizabeth, it works and is actually an effective way of reaching investors.
Twitter should be taken seriously
A lot of new technology is being dismissed because it’s not the way it used to be done and definitely not the normal way of communicating with investors.
A study done at Stanford, however, shows that Twitter works very well indeed. The more invisible your company is to media outlets the more important Twitter is for you. So if you are a start-up or an SME that media hasn’t paid much attention to, you have a lot to gain from using Twitter.
Whether companies like it or not, new technologies are changing the way businesses communicate. And don’t forget that it’s also altering what investors expect from companies. Social media can hence not be ignored, but should be used in ways that benefit your company as much as possible.
Twitter is a great way of delivering company news directly to investors, improve market liquidity and enable you to compete with bigger companies with access to media outlets.
All this obviously depends on who your followers on Twitter are. You have to start by building up the right kind of followers. Then Twitter will be a great tool for reaching not only your investors but media outlets, customers and potential customers as well.
Do you use Twitter? If so, do you have followers that are of importance to your business? Are you tweeting news about your company? Have you had great response? What reaction have you had from investors? Do they like the fact that you are up to date and communicate in innovative ways? Do you agree with Elizabeth Blankespoor that Twitter is a useful tool for reaching investors?
