The past is a foreign country: they do things differently there. L. P.Hartley, The Go-Between (1953).
The rapid shifts in technology, in particular the Web 2.0 technologies, are rendering the very recent past – yesterday, last month, last quarter – “foreign countries”.
One of the most important effects of these new technologies is the dramatic change in the way people work and play. There has been an veritable explosion in the online population and this growth is accelerating.
The new technologies have become so pervasive and integrated in our daily lives that many of them have become generic verbs in our everyday vocabulary, regardless of demographics.
Need to find something? “GoogleTM it”. Shopping takes a few clicks to find the best price, order and have it turn up on your doorstep without having to even get out of your PJs.
Liked or hated a product or service or even someone? You don’t just tell your friends and family about it. You “tweet it,” “facebook it”, blog about it or “show and tell” on youTube to the whole world.
And that’s not to mention FourSquares and rash of other location based technologies coming onstream
In today’s business landscape, the individual can vote about your products/services not only with his/her feet but with a pretty loud voice as well via a few taps on a keyboard. The internet together with associated technologies have levelled the playing field on a global scale. Barriers of entry into most markets have gone the way of the Berlin Wall. Competitors are everywhere – not just in your own backyard – and multiplying by the day.
Opportunity Or Threat? Your Choice.
There isn’t a single business niche or industry that is immune from the impact of these technology shifts. However, this new ‘flat world’ of the Internet opens up fantastic opportunities for SMBs which are prepared to constantly explore and experiment with new ways to reach and engage customers, take fresh approaches to product development (such as involving customers in the process; after all they are the one who are going to buy it!), re-engineer their business models to deliver value that keeps customers coming back and acquire new one etc. It is these nimble SMEs who will gain and maintain a competitive advantage even against the largest corporations.
In contrast, businesses which delude themselves that “none of these apply to my business” will go the way of the dodo. If you are one of those who are still in denial, take a look at what’s happening in the Australian retail industry at the moment.
Local retailers, large and small, have been squealing about the “unfair advantage” that online retailers have because online purchases from overseas don’t attract GST and other duty exemptions. Where have they been? Online retailing is as old as the hills in terms of the Internet timeline. eCommerce sites such as eBay and designer retailer Net-a-porter weren’t born yesterday. The tax structure wasn’t a problem before. Why is it a problem now? There are cries for legislative changes to protect them from online competition. If the local conditions are so unconducive to physical retailing, why are a raft of overseas retailers like Zara and Gap looking to expand physically into Australia?
The real issue is that no-one imagined that Australian consumers would take to online shopping the way they have or that online retailers would continuously refine their business models to attract and convert consumers. Security enhancements, free shipping and returns, quick delivery times, functionalities that enable browers to virtually “touch, pat and feel” the goods online steadily demolished any mental barriers to online purchases of even high-end designer shoes! The smarter physical retail operators will be the ones who look at the real cause for desertion of their stores and come up with new ways of how to engage customers.
For a business to succeed in this rapidly changing online world, it has to “be the best, be different or be cheaper”, as American entrepreneur Seth Godin neatly puts it, adding “And the last is no fun.”Note 1 Not only is it no fun, but for an SMB, a business model based built on being cheaper is on a hiding to nothing. Better to adopt the Mittelstand slogan:
Don’t dance where the elephants play.
Mittelstand is the term for SMBs in German-speaking countries. German SMEs such as Karcher (high pressure cleaners) and Dorma (maker of door and door-related products have carved themselves global markets by being the best in their respective chosen niches.
“Business as usual” is out the window. To survive and thrive, a business needs to continuously explore and experiment with how fresh ideas for every aspect of its business in order to successfully navigate the constantly changing landscape.
Imagination: Your Idea Powerhouse
Imagination is one of the most powerful tools in that business owners have at their disposal.
I am not talking about imagination in the sense “flights of fancy” or delusional thinking. What you need to harness is the powerful combination ofNote 2:
- productive imagination: the power which the mind has of forming concepts beyond those derived from external objects,
Recent brain research has that brain is a “proactive system”Note 3 which is continuously forecasting by drawing on past experiences (memories) and putting them into the context of the current circumstances. This means that a richer bank of past experiences and a broader view of the current situation are essential for generating innovative strategies which have high probability of success (as distinct from hare-brained schemes).
Put very simply, think of idea generation as “connecting the dots”, the “dots” being information. Innovation is the result of connecting dots that no one else has yet connected. The thing is, you don’t know which or how many dots would connect or could be connected to produce a great new idea. So you need to keep collecting as many dots as you can so that your brain has lots of dots to play with. Then, seemingly out of the blue, your brain will suddenly connect a string of dots and eureka! you have a brilliant new idea for your business.
Firing Up Your Imagination
- Curiosity killed the cat but a lack thereof in this day and age could kill your business. Read widely across a whole range of topics (current affairs, marketing, IT, strategy, human resources, etc) and from a whole range of sources (newspapers, books, magazines, blogs, etc). The internet is a fantastic mine of information. There is a lot of garbage out there but there are also absolute gems. Don’t accept everything you read as gospel: you do need to question things.
Tip: Don’t take “read” literally (except with books). What you are actually doing is scanning very rapidly as many sources of pertinent information as possible. You will run across articles that are worth a thorough read but unless you look, you won’t know. You don’t have to analyse everything you read immediately for its application to your business. The aim is to park what you read as another ‘dot’ in your imagination. Yes, your brain can actually store a lot of this stuff and drag it out for use on demand.
Don’t limit yourself to only matters pertaining to your own industry: new ideas can come from adapting concepts in other industries. Example: “Software-as-a-Service” is a common business model today. But did you ever imagine that jet engine manufacturers could adopt this type of business model? “Power by the hour” is this industry’s take on the model under which units of thrust are sold as a service.
- Engage with a wide range of people: staff at all levels of your business, people from all walks of life and backgrounds. As in point (1) above, don’t limit yourself to only your industry peers. In fact, if you are setting up a brainstorming session, it is far better to have an independent facilitator. Someone who knows nothing about your industry or your business is likely to ask questions that may seem very basic, possibly even stupid from an insider’s perspective, but in having to answer the question, it may provide a fresh perspective on a matter. [Obviously that "outsider" must be someone with business acumen!]
Don’t try to force your mind to turn every piece of information into an idea (unless of course you are trying to solve a pressing issue).
Ruminate. Let your mind wander – consciously or unconsciously – when you are doing things that don’t require your undivided attention eg routine work that you do on autopilot, exercising, walking the dog, washing the dishes, mowing the lawn, waiting for a taxi/tram/train. You’ll soon discover how your imagination links and unlinks different dots in the background (akin to how stuff like as anti-virus scans take place seemingly unnoticed in the background whilst other computing functions are happening), briefly forming an idea then discarding it if it’s not of use, and so on.
Finally, an idea is just a figment of your imagination until it’s tested and implemented. Guess where there is an extremely cost effective forum for testing your business concepts? The internet, of course!
Food For Thought
Here are some things to chew over during the coming holiday season and perhaps get ideas pumping!
If you haven’t already, start looking into social media and how to use it for business. This is now a mainstream business channel.
Did you know that in December 2008, the Supreme Court of the Australian Capital Territory handed down a ruling that defined a summons posted on Facebook as legally binding? How mainstream is that?
Regardless of whether you are a B2C or B2B business, social networks are where your customers are congregating and if you are not there, you are leaving a lot of change on the table for your competitors.
Books to read
Put these on your wishlist for Christmas – they’ll do a lot more for you than another pair of socks! You can find all of these on online bookstores for much less than physical stores. All provide practical (as distinct from academic), roll-your-sleeves-up and get-your-hands-dirty ideas.
- Competing In A Flat World: Building Enterprises For A Borderless World. By Victor Fung, William Fung and Yoram J. Wind
Li & Fung is the world’s largest sourcing company which has revenues in excess of $7B with just over 7,000 employees and yet do not own a single factory. How did they do this? This book outlines concepts of network-centric and firm-centric business models and hybrids of both, as well as the requirements for success under the various models. Whilst the transformation of Li & Fung into a network-centric business is used as ‘real life’ example, there is much practical advice for businesses both large and small.
- REWORK. By Jason Fried and David Heinemeier Hansson.
The authors are the founders of 37Signal which provides web-based business applications.
Incredibly easy reading and a whole new (and very entertaining) take on what you need to do to build a business. No talk about business plans, SWOTs, financial forecasts etc.
- Purple Cow: Transform Your Business By Being Remarkable. By Seth Godin.
Godin, self described “writer, speaker, and an agent of change”, developed the concept of “permission marketing”. He founded Yoyodyne, the world’s first interactive direct marketing company which was subsequently acquired by Yahoo!
This latest of Godin’s books challenges the old approaches to marketing and provokes you into thinking about new ways to go about marketing that are more in-keeping with today’s business environment.
And of course, keep checking in her. I’ll do my best to help you feed your imagination.
In the meantime, I’m going online to get a copy of Where Good Ideas Come From: The natural history of innovation by Steven Johnson. It sounds absolutely fascinating based on the book review that I just read in a magazine.