Let’s face it: money has always been a bit of a scam. In the earliest days of commerce, the barter system worked as a method to trade something one person had, say available labor, for something another person had, like food. You do this work for me and I’ll give this much food to you. While the valuation of the labor and food would shift depending on location and circumstances, the direct trade of known items worked nicely.
As soon as humans began to attach abstract value to items like coins and the early forms of paper money, this direct correlation began to erode. It can be argued, and there is some merit to the argument, that money backed by other forms of payment (such as the Gold Standard) was simply a matter of convenience and conveyance. Carrying around gold bars was much more cumbersome than bank-notes that guaranteed the bearer the equivalent value in gold if one wished to turn in the note.
Of course, the days of backed currencies are long gone. Now, the entire system is based on a balance of faith and risk. Just about everybody is prepared to trade actual items of value (inventory, food, and services) for a piece of paper (or credit card proxy) that is guaranteed by governments (not just the US). By the way, these governments consistently fail to demonstrate an ability to keep its own books in order.
Entering into the current stream of events, we have two major factors that should give everybody, and I do mean everybody, concern about where money is going.
The first item is the significant rise of non-state controlled virtual currencies. While BitCoin gets most of the attention, and some rather significant investments, it is hardly the only player in this game. Virtual currencies come with all the conveyance benefits of traditional money. Currently, the convenience factor is lacking, but more and more merchants are adding virtual currencies to the list of acceptable payments every day. My consulting firm, Full Potential Associations, is working on accepting BitCoin as payment as I’m writing this piece.
The second item is the absurd way that U.S. Federal Government is treating its responsibility to manage the confidence-based currency called the U.S. dollar. The core idea behind the Federal Reserve’s QE policy is to have the U.S. Government print money in order to buy things from… the U.S. Government. If I came to you with a business plan like that, you would throw me out in two seconds flat.
So we have the world’s largest economy just moving money around from itself to itself in an effort to stave off a collapse of confidence in its currency. At the same time, we have a worldwide, group of markets that are expanding trade in a virtual currency each and every day.
The reality: a long time standard has changed and new options are on the table. It is time we all consider that money, as we know it, has come to an end.
I submit that technology is not THE answer to any business problem. Can technology make a difference, in some cases a huge difference, in the way your business operates? Absolutely! The trick is blending your business strategy and good technology components to build a solid solution for you and your customer.
Technology on its own can’t address any issue. However, a business in today’s climate will not succeed at any scale without incorporating technology into the planning and execution of plans to move forward.
The majority of the world’s population is younger than Microsoft (founded 1975) and Apple (founded 1976). Think about that for a second. Hundreds of millions of people have spent their entire lives in a world that already had products from Microsoft and Apple. Now think about this. There are more children under the age of 14 in India than there are PEOPLE in the United States.
Keep in mind that today’s young are digital natives expect everything to be available with the swipe of screen. You need to figure out how this impacts your business because, believe me, it does.
The wide world is growing younger, more digital, and more mobile. This is the greatest business opportunity since the industrial revolution.
The companies who wisely integrate technology and technologists into the highest levels of strategy and leadership will be the winners in the years to come. Just turning to technology without balancing it with what your business knows how to do and what your customers expect is almost as dangerous as not doing anything.
Humans and thinking will always be important. No tech only solution can replace a handshake, hug, or a smile at just the right time.
The common sense solution here is to blend the expertise of your existing business with the technology solutions to enable you to continue your success into the future.
With each passing day, technology becomes more and more a part of our overall life. We are way past the point of just using gadgets and software to help us do repeatable tasks. We rely on mobile phones, websites, GPS devices, and a wide variety of other tools to do just about everything.
A manifestation of our acceptance and integration of technology into every aspect of our lives can be found in the recently released list from Interbrand that ranks the Best Global Brands. Six of the top on the list are technology companies.
How did this happen? When did this happen? What happened to all those tried and true brands like Nike and Ford? Well, the how and when was every minute of every day. You see, tech companies endlessly push everything forward. With each iPhone release, Android update, or Google search, the whole world is made aware of what just happened. As for Nike (24th) and Ford (42nd), they are still there. Just a little lower down the list.
With GPS devices giving us directions, our Fitbits helping us track our exercise habits, and the expanding list of Kindle devices from Amazon bringing us a seemingly endless amount of entertainment content right to our fingertips, technology has risen almost to the level of companion rather than servant.
What is your business doing to address these changes? How are you changing the way you control your inventory, display your merchandise online, or interact with directly with your customers?
In an environment when anybody walking into a store can scan a barcode and find 1,000 places to buy that product, how are you adjusting the in-store experience to help ensure there will be an in-store experience five years from now?
In a supply chain where raw materials can be bought and sold several times while the goods are still at sea, how are you adjusting your manufacturing schedules?
In a world where just about every bank allows customers to take a mobile phone picture of a check and have the amount automatically deposited into their account, what innovative services are you developing to combat the need for multiple branches? In fact, what are you doing about a competitor like Ally that has no branches?
Technology is not now, nor will it ever be, the answer to all business problems. The common sense solution is to blend the expertise of existing business with technology solutions to enable you to continue your success into the future.
Although it may seem as though it has always been there, Microsoft is still not 40 years old. From the incredibly humble beginnings of 2 employees and less than $20,000 in sales in 1975, Microsoft is now the world’s largest software maker and one of the world’s top 10 most valuable companies.
However, things are not all rosy in Redmond. With the resignation of Steve Ballmer, often blamed for Microsoft’s seeming stagnation of the past decade or so, Microsoft must now find a new candidate to lead the company in these very uncertain times.
Yes, Microsoft needs someone to lead the company rather than just try to manage it. Basically, Microsoft has been without any real leadership since Bill Gates stepped away from day-to-day operations in very early 2000.
Yes, Microsoft is the 7th largest company in the world. Yes, Microsoft still maintains an overwhelmingly dominant position in the computer operating system market. Yes, Microsoft has something like $60 KATRILLION in cash. Looking at the numbers, things must be great, right?
Well, maybe not so much.
Microsoft has been lagging beyond Apple (iOS) and Samsung (Google Android) in the smart phone and table markets almost since those markets came into existence. From the trailing position, Microsoft continues to make things worse with each new OS generation. To address this problem, Microsoft has chosen to buy Nokia’s mobile device business so that they too can sell their own phones with their own OS on them.
Microsoft has morphed into something so much more than just an operating system software company. They have several software product divisions, including Windows, Servers, and Business Systems. They have a whole host of web-based systems and services. They even have entertainment product suites, like the XBOX device family and software games series like Halo.
Now, Microsoft is adding the mobile devices from Nokia. Can all of this comes together to build a stronger company? Will one of these divisions be allowed to reach its full potential even if it threatens one of the other divisions? Can Microsoft capture the spirit that made them great in the first place?
Under the new leadership, Microsoft needs to get back into shape as a company. They need discipline, focus and the daily attention to detail that made them into what they used to be rather than the current series of half-steps that has brought them to where they are now.
Only time will tell if Microsoft’s “middle-age” (it turns 40 in about 18 months) growth will be happy and healthy as it trims off some fat and learns some new exercises and skills. OR, if that growth will be sad and soft as it continues to just eat other companies in a desperate attempt to capture the vigor and relevance of its younger days.
As I combine my two main morning routines, working on our property and reading the Wall Street Journal, I’m struck by how similar these two seemingly different “worlds” really are.
There are significant parallels between gardening and business. We even use gardening terms to describe key elements of business activities. At the early stages of a business, we talk about seed money to get things started. Once things are moving forward, the focus shifts to growing market share so that the business can stay viable. We even manufacture our products in plants.
When things are going well, we speak of reaping profits or harvesting profits. When things are not going so well, we might cut expenses by pruning the workforce or weeding the product line. Failure to adjust to changes in market conditions may cause certain products or even whole companies to die on the vine. Perhaps the best way to find an increase in sales is to grow the business organically.
As you can see, there is a lot of garden speak in our business talk. If we could go beyond just using gardening words and start thinking of our company as a living thing that needs tending, we would most likely increase the yield of the business.
The garden is a wonderful metaphor for a business. A good business leader ensures that the right sort of people are selected and planted in good soil so that they have the optimal chance for success.
The business garden is well tended when there is every opportunity for growth. The prickly problems, weeds, are quickly identified and pulled out of the way. By removing the weeds, the business allows their people and products to grow rather than being distracted by things that don’t belong there in the first place. The weeds also drain the company resources away from what you are trying to accomplish.
The proper light and rain, perhaps in the form of cross-training and more challenging assignments, can go a long way towards personal and professional growth. One can’t simple plant employees in a cube, walk away and get the desired results. Nor can you release a product and leave it to fend for itself in the wild.
Look over your business as if it was a garden and what do you see? Do you have the right kind of soil (offices, IT systems, organization chart) to attract the type of people and products you want? Are you using the right type of fertilizer (training, clear vision and mission, promotional track) to help your organization grow strong and rapidly? Are you removing the weeds (unnecessary meetings, unclear policies, and conflicting priorities) that would choke off the growth of your staff? Are you pruning the garden (ending dead products, removing underperforming staff, and cutting policies that aren’t helpful) so that the best of your people and products have the room that they need to grow?
Well before the first company was formed and the first business organizational chart was drawn, people have been growing gardens. A well tended garden, which requires daily and detailed attention, can yield many times more than a similarly sized garden that doesn’t receive the same focus.
The garden is a great metaphor for a business.
The common sense approach is to pay the daily and detailed attention necessary to see your business grow like a well-tended garden.
There is so much pressure today on Quarterly P&Ls, potentially going IPO, trying to go social like Facebook or get agile like a Silicon Valley firm, that common sense and its associated hard work is often tossed aside in search of the next thing.
People chase the latest trending concepts on Twitter without a full understanding of the trend. They try to emulate the success of other businesses despite the differences in markets or models. They read an article in the Wall Street Journal or a book from Harvard Business Review Press and treat it like a how-to manual.
There is a lot of focus on technology firms, social networks and virtual companies. While I’m a big fan of all those things and I’ve done nicely in each of those areas, they are a type of business, not a definition of business itself.
By gathering the actual facts that impact your company, your marketplace and your customers, you should be able to build a strategy and execute the associated plans using common sense.
Yes, the pace of business has greatly accelerated. Yes, your existing methods, processing or perhaps even finances may have to change. Yes, things like the e-commerce, 3-D printers and funding via sites like Kickstarter have really lowered the barrier to entry for competitors.
Common sense, however, never changes. Business fads come and go. New companies rise and then, like Icarus, come crashing back down. Books are written, case studies done and speeches are given. Still, common sense remains.
Through all these cycles, America’s best businessman, Warren Buffett, is buying railroads and newspapers. Can you go more old school than that? Pause a moment and consider that.
In the midst of all this speed, noise and 24/7 information, the common sense approach is more valuable than ever.
To discuss common sense, we must first define it. Two core components present a clear and simple understanding of the term.
First, common sense is a solid and logical judgment or decision based on the understanding of the facts before us. These facts should be readily available (common) and the judgments should be based on those facts (sense).
Second, ideas and actions resulting from a common sense approach are part of the ordinary human experience and require no specialized knowledge or education to obtain or execute these ideas. One does not need to be a rocket scientist or nuclear physicist to have and use common sense.
Common sense simply requires the basic ability to distill all the noise of the everyday world into the simplest set of actual facts. From there, one just needs the basic ability to make an unbiased decision based on those distilled facts. No magic, no deep insight, no special vision of the future.
Why then, do so many sensible business people make so many nonsensical decisions? Why then, do highly educated people do things that make no sense? Why then, do well established businesses lose so much market share or perhaps even go out of business when common sense would have prevented it from happening?
This is indeed a complex series of questions. However, the answers are actually very simple. The state of today’s business climate has forced many people to abandon common sense and common sense practices in search of a magical elixir that will make business success easy.
I’ll discuss the magical elixir in my next post.
Rarely a week goes by when Google is not in the news for something or another. As Google gets ready to turn 15 (yes, Google is still a teenager) this September, no doubt they will be in the news even more regularly.
Beyond the technology miracles that make Google the preferred search of most humans, Google’s business model is a thing of beauty. The majority of people that help Google generate value use the services for free. By doing so, they become a free labor pool that makes Google even more attractive to its paying customers. Genius!
A wide variety of services, Google Search, Gmail, Google Docs, and Google Earth chief among them, are 100% free to those who use them. Giving some things away while charging for others isn’t news and this practice, on its own, isn’t really that interesting.
The magic is in the way that Google turns free products, and the corresponding free labor of its software users, into a seemingly perpetual motion money-making machine. Advertising access to all those free users continues to grow at impressive rates. Q1 2013 figures show revenues have increased to just short of $14 billion, up 31% against Q1 of 2012. Even though this significant sales growth was a disappointment to some on Wall Street, it far outpaces anything else happening in the software and search world. Add in the fact that Q1 profits were almost $3.5 billion, which exceeded expectations, and it is fair to say that Google had a great overall quarter.
As I said, giving things away to drive some other type of business is not new. However, the give-away strategy usually focuses on getting the person who got something for free to buy something else. In Google’s case, the free things are not at all intended to drive business from the people using the software. Google’s model is much closer to the phonebook (remember those?) of yesteryear, which provided a truly useful, free service.
Regardless of Google’s size, user base, or cash hoard, it is still a young company. Like many teenage superstars (think Tiger Woods or Taylor Swift), Google is in a position to continue to dominate, some might even say define, how software is written, distributed and used for decades to come.
On balance, history is littered with young superstars who never really reached their full potential. Some of these stories end in tragedy, others in mediocrity. It is my hope that Google will continue to learn, grow and expand as it moves through its teenage years.