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The new business model
The internet is creating a new business model - there is a
migration from an inward looking closed loop model, to an outward looking open
feedback model. Some of the key trends driving this transformation are :
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Creation of new channels is transforming brand, sales
and marketing management
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Increasingly, the customer is moving from being King to
being an Emperor!
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The rules of competition are changing. Competition is
intensifying across all possible fronts
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Business and product cycles are shortening
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Knowledge is becoming a key strategic and competitive
advantage
Some of the key changes that these trends are driving
through are :
The traditional boundaries no longer apply to enterprises.
Organizations move from national, multi-national or trans-national to global
players. As the barriers in the market place of the global village fall, the
new organizations are more nimble and lean - with very little of the overheads
that were required in multi-national organizations. This leads to the
regulators and the local commercial laws framework often being questioned at
some fundamental points. These structures are still behind the curve, leading
to the regulation of global organizations being made under a traditional
framework - often leading to un-commercial results!
The traditional linear value chain is being replaced by an
integrated value network - where every point in the chain is inter-connected
and inter-related to every other point in the network. This raises some
fundamental organization structure issues and the "new world"
organizations are starting to mirror the new integrated value network in their
people structures. Traditional organizations will have to make this huge
transition. No longer is the why-do-we-need relevant, whether this is done
fast enough is the remaining question that will determine the survival of
"old world" organizations.
The new organization structure is characterized by
"empowerment". The traditional "top-down" control
structures are no longer relevant. With this comes the change in employee
focus - away from responsibilities and a move towards vision and execution.
Innovation is now standard operating procedure - this will put tremendous new
pressures on both the managers and the managed. Now change is required,
efficiency will come later!
This also creates interesting communication and control
challenges in "old world" organizations. The traditional
command and control structure is being rapidly replaced by a more flexible and
fluid team based structure. The team is often a virtual team : one that is geographically
separated but requiring constant communication channels to be kept open with
each team member. Over-communication is a thing of the past! This leads to new
communication networks (often virtual and real-time) being created and
managed. The teams have moved from running projects to running businesses as
the distinction between projects and businesses starts to blur.
Clearly, the challenges on the people is a quantum
increase. No longer will a "narrow" vision approach be the model
for success. The development of the new labor force is already underway. As the
numbers of the newly trained managers increase, these trends will gain
momentum leading to the further strengthening of the new business model.
We are in the midst of another virtuous spiral - sinking is not an option!
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