Mr Blue Sky – I am not going to even attempt to make any startling predictions for the future. I have my own take on where I think things are heading and what I’d like to see. However, it’s worthwhile sharing some aspects which I continue to find inspiring, and over the years have seen enter the consciousness of a wider audience, and shape the world in which we now find ourselves. These are just some of my thoughts that I think will positively impact and shape how we do business in years to come;
Business replacing governments as the shaper of economies – In 2000 I read Funky Business by Kjell Nordstrom & Jonas Ridderstrale. Recognised by the Financial Times as foremost business book of the year, its creativity and challenging thinking addresses the role of business in shaping the wealth of the global economy. Nordstrom & Ridderstrale pointed at that some global enterprises balance sheets even dwarfed some developing countries’ economies. Their suggestion was that should this continue, the role of governments would change to being national facilitators of a political state, and regulators of the economy where the economic power would lie in the hands of businesses. In some ways a worrying scenario, but in fact with the collapse of the banking system in 2008, this has already become a partial reality – the financial crisis caused by mismanagement of funds by banks from which we are still struggling to overcome. The big lesson for me from this scenario being that business owners need to take the ethical high ground, especially if economic success and the welfare of millions rests upon the shoulders of entrepreneurs and management boards. This is where corporate social responsibility and ethical trading can no longer be deployed as part of cynical price mechanism or tick box item on the reputation checklist, it’s people lives and the earth’s resources that are at risk here.
Embrace the principle of giving – Felix Dennis in his book How To Get Rich stresses the importance of ‘giving back’ as part of a healthy business approach. What might seem to be contradictory to a seemingly acquisitive function of growing a business, Dennis highlights that aside from the tax relief aspects, that funding worthy causes enhances the reputation of the business. It imbues the business culture with a sense of responsibility, and reinforces business values and those applied to decision-making on both strategy development and operational activity. Furthermore, it informs the dialogue with third parties and can furnish the building of useful partner relationships, which can be leveraged to drive engagement and change around issues, and win support that can shape behaviours amongst audiences and the environments in which each party moves.
Maslow’s self-actualisation, the new mantra – Fulfilling one’s potential in whichever area of interest or specialism an individual chooses to pursue, is held as the goal many hold dear within their professional and personal lives. Maslow’s hierarchy of needs is one of the key management theories often adopted to shape thinking around business culture and employee development. The principle of self-actualisation at the top of the hierarchy of needs pyramid model, has become a mantra for many new enterprises and entrepreneurs who see their business as an extension of their personal lives – a trend that’s highlighted by the blurring between home and work life, and where career development is no longer linear with set stages, but often erratic and random. Arguably, ‘career’ is now a more appropriate descriptor of today’s professionals working lives. Now many more professionals are becoming self-reliant and taking ownership of their career development, meanwhile the numbers of contract and freelance workers continues to rise as large corporates outsource functions and reduce headcount. The impact of reducing the number of permanent employees has meant that many people are now trying to build ‘their own castle in their own image’, and doing business on their own terms. This has become a driving force for innovation, enterprise, and is forming a business culture of collaborative and socially aware enterprises that recognise the value of holistic business practice. It will be fascinating to see how this shapes the business landscape over the forthcoming years.
‘Customer’ supersedes the historic capital assets – As any CEO will tell you, accepted management board thinking and decision making has for the past fifty years been shaped by an accounting mind set. Hence the rise of the ‘Big 4‘ accounting firms and their consulting arms ascending into prominence, while the management boards were increasingly being led by accountants occupying the driving seat. The resultant management approach and business strategy is invariably heavily reliant upon pulling the levers attached to the three key assets – property, land, and money. Leveraging these assets to enhance business performance has become the pre-occupation of senior management teams, their adeptness and skill in doing so crucially has become integral to how their business is judged by the stock market, shareholders, and the investment communities. Ownership is key, and stewardship of that enterprise where new revenues can be successfully squeezed from those assets forms the basis of accepted business thinking and best practice. However, today we are seeing global online businesses that possess very little capital, and their assets are largely intangible – no land, little property, but smart people doing smart things that ricochets round the world. The millions of customers that now buy from low capital, high reach businesses are helping to set a precedent for new enterprises, and shaping the business models that sit outside of the traditional triumvirate repertoire. ‘Customer’ is arguably the 4th asset, and largely ignored in the boardrooms (hence the traditional dearth of Chief Marketing Officers taking their seat at the top table). New thinking about business, its role, and where its inherent strength lies is permeating through the consciousness of new enterprises based upon the hard evidence of customer interaction and scale of engagement with online platforms – Amazon and Betfair remain excellent examples of phase 1 web business success. And now in phase 2, social interactivity through networked social platforms is creating new game changers with the likes of Facebook and YouTube feeling their way into virgin territory. Which leads to me to mention Richard Branson, someone whom I believe cleverly built the Virgin empire by leveraging the ‘customer asset’ long before anyone else – cleverly seeing that the students who bought imported records from his stores would require different products and services as they progressed through life. He realised that if you establish the right relationship with that customer from day one, had their best interests at heart, demonstrate you understood them, and would fulfil their requirements honourably with a personal touch in the same spirit as you did when you first met their impoverished student music needs, you’d have a friend for life. The straight talking, no bullshit and open relationship that permeates the Virgin ethos means that occasional mistakes will be forgiven and customers will keep coming back, and back, and back. That’s the value of the customer asset, and putting this at the centre of the business approach will be the characteristic of the leading enterprises in the future.