Corporate Dyslexia
Mr. Anjani, Canta Coffee Company's CEO had quit the troubled coffee chain after a short one-year stint. He was the third successive top-level official to have exited this group-owned coffee chain in a span of two years. The core of Canta's problems included an indiscriminate expansion strategy, steep overhead costs, high employee churn, new competition and high prices. Recently, the group sold off its stake in the chain.
Knowledgeable people are the key to corporate success. The corporate houses which cling to yesterday's haphazard means of developing organization and their people suffer from corporate dyslexia. In this era when executives are turning entrepreneurs or joining competition for higher perks, it is important to know about the next big opportunity as well as innovative organizational dynamics and business frameworks which can overcome this so called corporate dyslexia.
There's a scene in Alice in Wonderland when Alice comments that everyone in the domain of the Red Queen seems to be perpetually running. The Red Queen responds that Alice must live in a very slow place indeed, for in her world everyone must run simply to stay standing.
If you are a business leader, chances are you know the feeling. Like the Red Queen, you live in a world in which continual changes in technologies, markets and organizational forms require your firm to be in constant motion just to keep in place. Understanding the paradox of the Red Queen involves recognizing that, unlike in the tidy world of economic and organizational theory, in the real world there is no equilibrium. If you are doing a good job causing problems for your competition, you are sowing the seeds of problems they will cause you down the line.
Drawing from a recent happening where Mr. Ram, MD & CEO of a book store retail chain, who moved out to create a new business model, where client companies will become virtual organizations, outsourcing essentially all of their management activities. This new concept venturing in future retail practices will manage complete gamut of activities like, project roll out, human resources planning, marketing, store designing and M&A consulting etc. These kinds of changes disrupt the market and over time, alter the basis of competition.
Thus to overcome this corporate dyslexia, the business leaders should keep in mind that today's innovation is tomorrow's noose. Organizations that don't keep changing eventually become punished for being really good at what used to be rewarded. In 1980s, for example, Bank of America's efficient brick-and-mortar operation became a liability as automatic teller machines and electronic funds transfer emerged to allow people to get their money more easily.
Nevertheless, competition is one of the best forces for organizational learning and improvement. Dealing with the troubles of competition allows you to build the capacity of your organization. Good business models arise from trial and error and even the road to microprocessors and the Internet were fraught with early misjudgments about the utility of personal computers and linked networks.
Business leaders must therefore face the Red Queen head on. One way of doing so is to get in on early diffusion of the product, which can often give a firm an advantage. Establishing product teams, phase reviews and cross-functional mechanisms can all speed the rate at which an organization is able to respond to the market. But it's not just about going fast. The art of strategy is about understanding your industry well enough to know a promising innovation from a blind alley.
Leaders should focus on connecting strategy planning teams with those who are involved in product and service development and are actually in touch with customers. In the end you want to think of yourself as the architect of a system that is trying to engage, not eradicate, competition.
Just to share with you, Google has acquired feedburner.com. Do you know what this company is? Ok, if you are subscribed to my case studies and getting emails as and when I update this section of my site, it's a service by the feedburner.
It is not the strongest of the species that survive, not the most intelligent, but the one most responsive to change. - Charles Darwin
Drawing from a recent happening where Mr. Ram, MD & CEO of a book store retail chain, who moved out to create a new business model, where client companies will become virtual organizations, outsourcing essentially all of their management activities. This new concept venturing in future retail practices will manage complete gamut of activities like, project roll out, human resources planning, marketing, store designing and M&A consulting etc. These kinds of changes disrupt the market and over time, alter the basis of competition.
Thus to overcome this corporate dyslexia, the business leaders should keep in mind that today's innovation is tomorrow's noose. Organizations that don't keep changing eventually become punished for being really good at what used to be rewarded. In 1980s, for example, Bank of America's efficient brick-and-mortar operation became a liability as automatic teller machines and electronic funds transfer emerged to allow people to get their money more easily.
Nevertheless, competition is one of the best forces for organizational learning and improvement. Dealing with the troubles of competition allows you to build the capacity of your organization. Good business models arise from trial and error and even the road to microprocessors and the Internet were fraught with early misjudgments about the utility of personal computers and linked networks.
Business leaders must therefore face the Red Queen head on. One way of doing so is to get in on early diffusion of the product, which can often give a firm an advantage. Establishing product teams, phase reviews and cross-functional mechanisms can all speed the rate at which an organization is able to respond to the market. But it's not just about going fast. The art of strategy is about understanding your industry well enough to know a promising innovation from a blind alley.
Leaders should focus on connecting strategy planning teams with those who are involved in product and service development and are actually in touch with customers. In the end you want to think of yourself as the architect of a system that is trying to engage, not eradicate, competition.
Just to share with you, Google has acquired feedburner.com. Do you know what this company is? Ok, if you are subscribed to my case studies and getting emails as and when I update this section of my site, it's a service by the feedburner.
It is not the strongest of the species that survive, not the most intelligent, but the one most responsive to change. - Charles Darwin
Labels: Innovation, Retail
posted by Narayan Mantri at
4:33 PM
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