Inspiration Leadership and Aspiration Management Drives Business Success: Motivation Shifts– Inspire, Aspire, Achieve…

Inspiration leadership is often seen as the key to creating a successful business; however, businesses that are led by aspiration management are also notably successful. Hence, although inspiration leadership and aspiration leadership may have different drivers, they can both deliver positive results…

According to Kate Tojeiro; organizations that are based on inspiration style leadership have a clear vision of what they should stand for and where they are going. This leadership is inclusive by nature and it connects well with employees and is able to articulate its vision in a way that is compelling to those around them. These companies tend to be driven by innovation and creativity and tend not to be risk-averse, for example; Apple, Google, Amazon…

Whereas the aspiration style of leadership is driven by a different set of rules, for example; size, influence, market share, geographic spread… and these factors tend to be more important than innovation or creativity… These companies are often more hierarchical than those that are inspiration led, for example; businesses in media, banking, pharma, telecom… are typical of those with an aspiration management. Although clearly different in their styles, there are definite cross-over between these two types of organization… an ideal organization is structured with a mix of both inspiration and aspiration leadership styles…

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In the article Business Motivation by Nancy Wurtzel writes: Motivation is a complicated subject that is studied by many and understood by few. Virtually every aspect of human life– from the mundane to the life-changing– is guided, swayed and altered by motivating factors… Motivation is one of the most powerful driving forces in the workplace. It can mean the difference between tremendous success and failure. Motivation stems from two sources.

The first part of motivation is external or extrinsic (outside the person) sources. Other motivating factors come from internal forces, which are mainly people’s thoughts, patterns and collective experiences. However, humans are unique; what motivates one person will not necessarily motivate another. You– and only you– will be able to determine what works for you. Take the time to examine what internal and external factors are motivating you as a business person. Here are a few keys for motivation that may prove helpful.

  • Inspiration: Inspiration is critical to getting and staying  motivated. If you are not interested in your business, your motivation level will never be high and you won’t be able to sustain interest for very long.
  • Setting Goals: Short and long-term goal setting is vital… If you didn’t set goals, you would be adrift with nothing to strive for and no charted course to follow.
  • Networking: Network with other business people. One person can’t move a huge mountain but when a number of people work together the mountain is suddenly only a small hill– these are simply challenges waiting to be surmounted.
  • Reward Yourself: All work and no play is a huge mistake. Your motivation will soon begin to fall if you never take any time away from the demands of business. So, plan frequent rewards for yourself.
  • Exercise: There is a powerful connection between the mind and the body. It’s vital to take breaks and exercise, everyday. If your body isn’t healthy; your mind, concentration, and motivation will certainly suffer.
  • Organize: Organization is critical to motivation; vision, strategy, plan, structure, focus, effective time management…

In the article Brand Shift for 2013: From Aspiration To Inspiration by Alan Snitow writes: Great brands, those brands most in touch in with consumer sentiment, have evolved their message from one of aspiration to one of inspiration. They are focused less on what they can give, and more on what consumers themselves can achieve. In those very same aspiration prone categories, quintessentially U.S. companies are calling on consumers to make a better world for themselves, by themselves.

These brands have realized their role is not to be the solution, but to be the motivation for one. The call to action isn’t merely to buy something, but to build something. Of course, some brands have always acted thusly, particularly in categories predicated on personal achievement, like sporting goods. What’s interesting is how badge brands, whether of style, wealth, wisdom, or popularity, have taken the same tack…

And perhaps, brands will continue to benefit from the lessons of these last few years and remember that inspiration can be as powerful a proposition as aspiration…

In the article How To Succeed–Or Keep On Trying by biglittlewolf writes: I read not only to learn but to be informed, entertained… but most important, for inspiration. I recognize that both aspiration and inspiration can generate motivation. And, I am clear on the difference: The definition of aspiration is a strong desire, longing, or aim; ambition: intellectual aspirations; a goal or objective desired… The definition of inspiration is imparting inspiration (stimulation or arousal of the mind, feelings to a special act of creativity; person or idea that causes this state) I am keenly aware that I may aspire to a way of life and never attain it…

Our aspirations form part of who we are, what we seek to accomplish, how we look, how we feel, how we live, what we define as success. There is much to be enjoyed and learned from aspiration magazines, books, films… as long as we don’t presume that we must inhabit the entirety of this posed and painted picture of perfection, that anything less is failure, that anything less is lacking in value, that if we don’t arrive at the desired state it’s because we are lacking in value

As for inspiration, it’s a different matter: It stimulates the mind, it engages the most profound emotions; it stirs us to action whether to chase after our own dreams, or to help others pursue theirs. Some of us need aspiration; others need inspiration. I know that I rely on a reasonable dose of both; they may overlap and coexist and they do generate motivation…

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In the article Inspiration or Aspiration by Kate Tojeiro writes: Most businesses today, particularly large multinationals (the most noticeable and easiest to scrutinize), are driven by two distinct styles of management; inspiration led and aspiration led styles… Developing a leadership style to address the changing needs of business will ultimately involve everyone in the organization, not just those at senior management levels. It’s certainly accepted that– what has worked well in buoyant times is unlikely to be as effective in difficult economic times.

Traditional ways of thinking and operating will need to be challenged if companies are to remain strong and competitive. To quote Mark Twain; if you always do what you always did, you’ll always get what you always got… It’s about being prepared to change, then driving that change forward, both on an individual and corporate level… Great leaders are those who concentrate their energies on the things they are good at, and totally acknowledge the things they are not good at. Irrespective of whether their style is inspiration led or aspiration led, they are comfortable with the fact that they alone cannot achieve everything, so they surround themselves with good people who have skills to achieve what they cannot…

These leaders are able to inspire others, in their organization, to achieve greatness… Both inspiration and aspiration styles of leadership can be effective even when an economic collapse threatens the very existence of a business. Where there is a desire or a need to change an existing leadership style, business leaders should choose from the attributes of existing styles and nurture an approach that best suits them. The overriding objective, however, is not to create a style that becomes formulaic, but a style that is sustainable and repeatable…

In the article Get Motivated in Your Business by Dennis L. Prince writes: One of the top causes of waning motivation is unclear goals. If you don’t have a clear plan to reach your goals, it’s not surprising that you lose motivation… goal-setting is directly related to how you define the start of the journey and how finely you chart the key milestones you need to achieve it. Setting milestones can empirically define what success along the way looks like. When you see and attain it, you will stay motivated knowing you are on the right path… Milestones are crucial to staying motivated…

A key benefit of setting milestones, besides ensuring you’re staying on the right track, is to reassure yourself that you are making good progress. When you reach a milestone, celebrate it… Much of what keeps business people charged up is taking the excitement and confidence gained from a goal you’ve reached, and eagerly pouring that into their next quest. That’s the core of motivation– it fuels your inspiration and aspiration for moving your business ahead, year after year…

Achievement, accomplishment, prosperity… all of these words is a synonym for success… According to Reckless; we live in an aspiration society… Aspiration refers to material things you can possess, whereas inspiration refers to immaterial things you– wish to be. When you choose– ‘to have’ versus ‘to be’– you set yourself up for disappointment and frustration… A strong desire can help you get inspired and aspire… However: What comes first, inspiration or aspiration?

Many sources of inspiration can help you in achieving success in life. But, arguing about which comes first whether inspiration or aspiration is not one of them. The important thing is to find your true source of inspiration and to remain focused in the achievement of your goals… If the vision of a CEO is aspiration, then the team must be inspired to works towards actualizing it. It tells the team ‘what’ to achieve; it’s inspirational, and hence motivates the team to make the vision a reality… Aligning people to the business vision or goal alignment in aspiration management context is about creating the right balance between the business and individual aspirations and goals…

Motivation plays a critical role in influencing workplace behavior and performance. There are many theories of motivation and including; Abraham Maslow’s hierarchy of needs, Herzberg’s two-factor theory, Alderfer’s ERG theory, Goal-setting theory, Models of behavior change, Theory X and Theory Y…

However, the basic objective in motivation is to strike the right balance between the organizational growth opportunities (business aspirations) and personal growth opportunities (career aspirations)…

Motivation is what moves us forward in our personal and business lives… So, take the time to examine your motivating factors, improve your focus, renew your enthusiasm, and keep on track… and, the motivational momentum of your inspirations and aspirations will carry you forward…

International Trade– Models, Benefits, Risks: Global Economic Outlook, 2013… Open Markets Drive Trade Development…

International Trade: Countries cannot live in isolation. They must mutually share their resources, technical know-how, products and services, and undertake international trade in order to grow their economies and prosper…

The world economies are closely inter-dependent; economic progress of all nations depends on their ties with other countries… International trade is a vital engine for economic development, and in most countries it represents a significant share of their gross domestic product (GDP)…

According to Ben Bernanke: In U. S., as best we can measure, international trade is critically important. According to one study that used four approaches to measuring the gains from international trade, the increase in trade since World War II has boosted U.S. annual incomes on the order of $10,000 per household (research by Bradford, Grieco, and Hufbauer).

The same study found that removing all remaining barriers to trade (i.e., free trade) would raise U.S. incomes anywhere from $4,000 to $12,000 per household. Other research has found similar results. Our willingness to trade freely with the world is indeed an essential source of our prosperity– and I think it’s safe to say that the importance of trade for the U.S. will continue to grow…

While international trade has been present throughout much of history, its economic, social, and political importance has been on the rise in recent centuries… The classical model of international trade was developed over 200 years ago by Adam Smith. He believed that different countries possessed unique advantages in the production of certain goods. He then showed that world output would rise if countries traded freely along the lines of their productive advantages…

Torrens and Ricardo expanded on this theory by showing that even if a country did not have an absolute advantage in any goods, both it and other countries would still benefit from international trade. This would be the case if countries specialized in the production of goods with which they had the greatest absolute advantage, or the least absolute disadvantage– this is known as law of comparative advantage

Pre-trade relative prices, in many cases, determine the direction of comparative advantage and therefore the direction of trade… International trade is most commonly recognized as the exchange of goods or products; however, trading services such as, expertise in a particular field or the ability to facilitate the trade of goods is another common form of foreign trade.

Trading capital on the foreign exchange market (FOREX) represents a third facet of international trade. Capital or currency held for foreign trade fluctuates in value hourly due to political, business, weather and other conditions and factors from nation to nation. Trading currency in the international market attempts to profit from the rising value of one nation’s currency through selling the lower value of another nation’s capital…

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In the article Different Types of International Trade Models?  by Peter Hann writes: International trade models may be traced back at least to the theory of absolute advantage put forward by Adam Smith. This theory demonstrated that it was beneficial for a country to specialize and to engage in international trade if it could produce some goods more efficiently than its trading partners.

This theory was further developed by the comparative advantage theory of David Ricardo, which showed that a country should specialize in those goods in whose production it was comparatively efficient. Ricardo’s theory has been further refined in more recent times to produce neo-Ricardian theory that uses fewer assumptions than the original theory.

Other important international trade models include; the Heckscher-Ohlin theory that emphasizes the importance of factors of production in a country, and the gravity theory that looks at the size and proximity of trading partners. While Smith only demonstrated that international trade was beneficial in certain specific circumstances, Ricardo’s theory showed it always makes sense for a country to specialize in producing those goods and services in which it is comparatively most efficient. This specialization increases productivity and boosts the total output of the country.

A country does not need to have an absolute advantage in producing goods provided the opportunity cost of producing the goods is lower than that of its trading partners in producing same goods. Ricardo’s theory of comparative advantage uses numerous assumptions. For example, it assumes that the only input to industrial production is labor and that labor is mobile between industries, but not between countries.

Modern refinements to Ricardian theory have produced international trade models that can demonstrate comparative advantage across a range of goods and countries, rather than Ricardo’s original model that used two countries and two categories of goods. The Heckscher-Ohlin model of international trade emphasizes the resources available in each country and stresses the importance of factors of production in each country. The abundance of factors such as, labor or capital in a country determines the type of international trade the country engages in.

The country produces and exports goods that take advantage of the factors of production that are abundant, and will import those goods that require the input of factors of production that are scarce in the country. International trade models also include the gravity model that looks at the economic mass of each country and the distance between the trading partners. The gravity model arrives at a prediction of the trade flows between the countries based on these elements and other factors such as, the historical context between countries that have affected trading patterns…

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Global Economic Outlook 2013, May 2013 Update: According to the World Trade Organization (WTO); global commerce is set to grow by 3.3% in 2013, as persistent gloom in the EU led it to cut a previous forecast of 4.5%. The announcement marked the second time that the WTO has reined in its figures for 2013, after initially estimating that world trade would expand by 5.6%.

The WTO report said: In 2013, improved economic prospects for U. S. should only partly offset continued weakness in the EU, whose economy is expected to remain flat or even contract slightly according to consensus estimates; and, China’s growth should continue to outpace other leading economies, cushioning the slowdown, but exports will still be constrained by weak demand in the EU. As a result, this year looks set to be a near repeat of 2012, with both trade and output expanding slowly…

In 2012, the WTO said, global commerce expanded by 2.0% from the level in 2011, compared with growth of 5.2% that year. In 2012, the dollar value of world merchandise exports increased by 0.2% to $18.3 trillion… That trend was driven by falling prices for traded goods with commodities such as; coffee, cotton, iron ore and coal seeing major drops, while oil remained relatively stable. Meanwhile, the value of world commercial services exports rose by 2.0% to $4.3 trillion…

 In 2013, First Quarter Trade Results: Merchandise trade growth increased in major economies during the First Quarter of 2013. Compared to Fourth Quarter of 2012, value of merchandise imports and exports for the total of G7 and BRICS countries increased by 1.3% and 2.8%, respectively. Compared to the previous quarter, merchandise– imports and exports– increased in First Quarter of 2013 in most major economies, for example: Germany (by 3.9% and 4.8%), China (by 0.9% and 5.6%), Brazil (by 5.1% and 4.9%), U. S. (by 0.7% and 1.0%), Italy (by 1.4% and 3.2%), Canada (by 1.6% and 1.2%), France (by 0.5% and 1.9%), and Russian Federation (by 4.9% and 0.0%).

Conversely imports grew and exports contracted in South Africa (by 4.3% and minus 0.3%), while the opposite pattern (i.e. imports contracted and exports increased) held in UK (by minus 0.3% and 1.3%) and in India (by minus 0.9% and 6.1%). In Japan, imports contracted slightly in the First Quarter of 2013 (by minus 0.1%), whereas exports decreased more significantly (by minus 2.3%) for the fourth consecutive quarter…

Most countries of the world cannot have a growing economy or lift the wages and incomes of their citizens unless reach beyond their borders and sell products, services… to the world’s populations…  Exports support millions of jobs worldwide, for example; in U.S. more than 50 million workers are employed by companies that are engaged in global trade, and this represents approximately 40% of the U.S. private sector workforce…

Often overlooked is the fact that more than 97% of the quarter million U.S. companies that export are small and medium-sized enterprises (SMEs), and they account for nearly a third of U.S. merchandise exports… International investment is also critical to the future prospects of world business, for example; multinational corporations earn trillions of dollars in revenue through their foreign operations, which create tremendous value for stakeholders…

There are both benefits and pitfalls in international trade, and how these are managed determines the relative success of operations… Consider benefits: When trading internationally the universe of potential customers and suppliers increases significantly… The idea that a business relies solely on one market (e.g., home country) and directs all its resources into a single currency may prove to be more risky than it may first seem. Just look at the number of unprecedented global disasters over the last few years and the drastic impacts these have had on markets…

While expanding beyond home markets can increase sales, provide better profit margins, reduce pricing pressure, and could reduce seasonal market fluctuations… The ability to stand out from competitors is a crucial factor in business: In the home market your business may be viewed as comparable to competitors, but when placed in another country’s environment it may be considered a unique product or service not to be missed. By making the product or service available to worldwide buyers, you instantly create another life-line for the business… boost sales potential and allow your business to flourish…

However there are pitfalls, in international trade, and the key is managing risk… First and foremost, it’s crucial that you have a clear understanding of what international trade involves. It’s easy to become engulfed in the excitement of its benefits and marginalize risks… For example, it’s dangerous to assume that laws in countries are similar to those of the home country… and most critical is the development of meaningful relationships in the target countries…

With so many aspects to consider when trading at an international level, it’s easy to leave currency exchange to the last-minute, and it could have a negative impact on business’ profit, and if you do not plan ahead, the market’s volatility could always change the worth of the currency– and not always for the best…

International trade and investment is inevitable part of world economy, but international trade has to be approached sensibly and with a clear thought process so as to maximize the benefits and minimize the risks…

Datafication– Reflects the Past and Drives the Future: A Revolution That is Changing How We Live, Work, Think…

Datafication is the transformation of our entire world into oceans of data that can be explored– and providing a new perspective on reality. Datafication takes all aspects of life, and transforms it into a data format that makes it quantified; for example, Twitter datafies stray thoughts, LinkedIn datafies professional networks… Once things are datafied, we can transform their purpose and turn the data into new forms of value…

Ultimately, datafication marks the moment when our information society finally fulfills the promise implied by its name… Data are center stage: All those digital bits that have been gathered can now be harnessed in novel ways to serve new purposes and unlock new forms of value. But it requires a new way of thinking; datafication is a resource and a tool and it’s meant to inform, rather than explain it points toward understanding but its still lead to misunderstanding, depending on how well it’s wielded…

So how is datafication being used to shape our business activities and create new forms of values? Collecting data is not enough; it depends on how data is used to unlock its values, not only its primary use but also its reuse– its option value. In other words, quantifying things that we didn’t previously think to quantify. One way that we are probably being datafied right now is by location: Smartphone applications draw upon our real-time geographic coordinates to recommend– restaurants, events…

Social media also lends an interesting perspective on how society is now datafied… These online interactions can shed much light into our social dynamics and cultural future. These examples are just the tip of the iceberg, showing that datafication can apply to just about anything. Even though datafication holds enormous opportunity and value, there are negative impacts on privacy and sense of freedom… We didn’t used to look at our friends and view them as a rich source for data, but Facebook changed that by datafying friends

Similarly, we never used to think of our whispers, stray thoughts, professional networks as data-producing entities. Yet, according to Kenneth Cukier; Twitter, LinkedIn… changed that too. In short, we are datifying many aspects of our lives that we never actually thought as being informational before… and we’re just at the outset of the datafication era… consider all the potential uses of datafication as we move forward into the future...

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In the article New Buzzword: Datafication by Jeff Bertolucci writes: Just when you thought you had mastered all the data-riffic buzzwords out there, another rears its trendy head. We’re talking about datafication; the notion that organizations today are dependent upon data to operate properly– and perhaps even to function at all.

According to Andrew Waitman; datafication is a different concept– what’s happening in the world of data is that more businesses are fundamentally data businesses. Even if you think of– online retail, online grocery stores… they don’t operate without data infrastructure.

According to Waitman; you could argue that no online business could be operating without their backend data infrastructure… As trends go, datafication is not new: Many multinational corporations have processed and analyzed massive data sets for decades, but with little fanfare. For example, financial, energy, retail… were early adopters of data-style analysis…

Walmart and Target have been doing large data analysis for years– storing large volumes of customer data– and than later going back and doing post-analysis of that data. Google has done big data analysis since it started for optimizing their search engines… The ubiquity of powerful and personalized computing devices combined with– store everything mentality– has made it easier for organizations to analyze huge data sets.

Decades ago, people had to make decisions on the metrics they needed and the specific data type that they were going to store in the mainframe computers. But now you store everything, and do a post-facto query. In today’s big data world, organizations typically capture and store all information, even if they’re not sure what insights the data will provide…

In the article Rise of Big Data, Big Brother by Cathy O’Neil writes: Datafication is an interesting concept: We are being datafied or rather our actions are and when we ‘like’ someone or something online, we are intending to be datafied or at least we should expect to be. But when we merely browse the web, we are unintentionally or at least passively being datafied through cookies that we might or might not be aware. And when we walk around in stores or even on streets, we are being datafied in completely unintentional way

This spectrum of intentionality ranges from us gleefully taking part in a social media experiment we are proud of to all-out surveillance and stalking. But it’s all datafication. Our intentions may run the gambit, but the results don’t… Once we datafy things, we can transform their purpose and turn the information into new forms of value. But, who is ‘we’ and what kind of value? If you assumed that ‘we’ means– the people– then, you might re-think it, since ‘we’ really means– companies, governments… and they are becoming more efficient with datafication.

According to Cukier-Mayer-Schoenberger; the datafication revolution consists of three things: 1. Collecting and using a lot of data rather than small samples. 2. Accepting messiness in your data. 3. Giving up on knowing the causes. They describe these steps in rather grand fashion by claiming that datafication doesn’t need to understand causes because the data is so enormous. It doesn’t need to worry about sampling error because it’s literally keeping track of the truth– it’s all really about understanding what we can do with data and the potential behind it…

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In the article Datafication: Lens of How We See Ourselves by Lyndsay Grant writes: Datafication is both backward-facing, representing what has happened so far and also forward-facing, driving future behavior… Yet the way that datafication informs future action is not always straightforward… While providing an illusion of certainty and control, the data itself only provides a starting point for asking more questions…

Facebook is a prime example of how datafication attempts to influence our behavior, for example; displaying numbers of our– likes, shares, comments, friends… Facebook encourages its users to spend more time on the site creating and sharing content, which will increase our numbers and that provides more valuable data about us, which makes it easier for marketers to effectively target us with advertisements…

The use of data to drive online behavior does not stop at Facebook. By using cookies to track interaction across multiple sites and then aggregating this information, marketers get an even more accurate and nuanced picture of who you are, and therefore  advertisements you are more likely to respond to… The effects of datafication also arguably extend to our offline behavior, and influence how we see ourselves and the world around us. If numbers of our– friends, likes, comments… are what drives our interaction online, then particular attitudes and perspectives are being cultivated that we may carry offline…

While datafication may give the illusion of more certainty about us and our world, it does not in itself provide final answers. If data is to open up opportunities for thinking and acting differently in the future, it can only ever really succeed in posing more questions… According to Dawn Nafus; this is the more-and-yet-less quality of data. Measuring data gives more information, but only succeeds in posing more questions about what data really means…

Datafication exposes variability and enhances value: Companies use data to create better products, airlines use data to plan flights at times… Datafication leads also to improved decision-making, e.g., companies like Proctor and Gamble use their data to plan expansions into new markets…

According to an MIT Sloan study; companies that utilize data driven decision-making have seen 5-6% greater output and productivity than what was expected… A recent McKinsey report says; the next frontier for innovation is in healthcare, and if data is used creatively and effectively it will drive efficiency and quality, which could create more than $300 billion in value every year...

According to Viktor Mayer Schönberger-Kenneth Cukier; the scale of datafication allows us to extract new insights and create new forms of value in ways that will fundamentally change how we interact with one another. These new insights can be used for good or for ill, but that’s true of any new piece of knowledge, but what is most disconcerting about datafication– it’s on a direct collision course with our traditional privacy paradigms

The fear is that well-meaning organizations may become so fixated on the data and so obsessed with the power and promise it offers that they will fail to appreciate its limitations… According to Kate Crawford; datafication is full of hidden biases… data and data sets are not objective, they are creations of human design… Organizations and individuals must become more aware of the biases and assumptions that underlie the datafied world.

According to Jules Polonetsky and Omer Tene; organizations must disclose the logic underlying their decision-making processes, as best as possible, without compromising their algorithmic– secret sauce. This information has two key benefits: it allows us to monitor how data is used and it also allows individuals to become more active participants in how their data is used…

According to Paul Vallée; while many organizations are coming to grips with the brute impact of the data explosion, others are already starting to experience some of its deeper consequences… Businesses create trillions of bytes of data each day. People share more than 30 billion pieces of content a month on Facebook… Passive devices like sensors in cars, computers, smartphones, energy meters… log trillions of bytes…

Datafication is a resource and a tool. It is meant to inform, rather than explain; it points toward understanding but it can still lead to misunderstanding, depending on how well it is wielded. And, however dazzling the power of datafication may appear, we must not be blinded by its inherent imperfections… Rather, we must adopt the technology with an appreciation not just of its power, but also of its limitations…

Pursuit of Perfect– Don’t Ignore Good Enough, which is often Good Enough: Balance the Law of Diminishing Return…

Perfect: Perfect is the Enemy of Good  is an aphorism or proverb which is commonly attributed to Voltaire (great French writer 1694-1778). The moral is that perfectionism is contrary to satisfactory competence…

Aristotle, Confucius and other classic philosophers propounded the principle of– golden mean, which counsels against extremism in general. The Pareto principle or 80-20 rule explains this numerically. For example, it commonly takes 20% of the full-time to complete 80% of a task while the last 20% takes 80% of the effort.

Achieving absolute perfection may be impossible and so as increasing effort results in diminishing returns, further activity becomes increasingly inefficient… In other words, instead of pushing yourself to an impossible perfect, and therefore getting nowhere, accept good

According to frugalblog; as an overall philosophy being a perfectionist really doesn’t work... If I tell myself I need to be perfect from start-to-finish that will be enough reason to never start, so I ascribe to a– less than perfect philosophy– ninety percent is the new one hundred percent…

According to Trent writes: perfection demands a lack of mistakes, and when you set yourself up expecting perfection, you’re doomed to fail from the start. Success comes from recognizing that mistakes happen, that you can’t beat yourself up over them, and that you need to step back and learn from them. The pursuit of perfect, while ignoring good enough, can be a big mistake…

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In the article Perfect is Enemy of the Good – Find the Right Balance by Marty O’Neill writes: Voltaire’s Perfect is the Enemy of Good fits perfectly into the operational life of many business executives. Guy Kawasaki’s blog post– A Dozen Don’ts for Entrepreneurs also reminds us that perfection is an allusion. Ed Calabrese, a friend and colleague, had a saying; shoot the engineer and ship the product. So the balancing act we engage when we have to– release a product, publish a report, post a blog, wrap up a presentation is; what is the right balance?

Folklore has it that an intern working for Henry Kissinger gave him a report and asked the Secretary of State to review the document. A week later, Kissinger gave it back and said– you can do better. Another week passed and the intern gave the report back to Kissinger with a comment indicating the report was much better. Kissinger gave the report back a week later with the comment– I still think you can do better. So the intern put his very best work into the report and a week later gave it to Kissinger saying this is the best I can do. Kissinger said– thanks, I’ll read it now.

Somewhere between Guy Kawasaki’s– don’t worry, be crappy and Ed Calabrese’s– shoot the engineer and ship the product and Henry Kissinger’s painfully long review cycle is the answer. I’m leaning towards Guy and Ed…

In the article Perfect is the Enemy of the Good by J.D. Roth writes: The pursuit of perfection is an exercise in diminishing returns, for example; some initial research will teach you the basics; little more research will help you separate the wheat from the chaff; still more research will enable you to make an informed decision. Theoretically, if you had enough time, you might find the perfect option. But each unit of time you spend in search of higher quality offers less reward than the unit of time before it:

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Quality is important: You should absolutely take time to do research… But remember that perfect is a moving target, one that’s almost impossible to hit. It’s usually better to shoot for good enough today than to aim for a perfect decision next week. Procrastination is one common consequence of pursuing perfection: You can come up with all sorts of reasons to put off decision-making… Get in the game: Just start. Starting plays a greater role in your success than any other factor. When you spend so much time looking for the perfect choice then you never actually do anything…

In the article Getting to Good Enough by Dustin Wax writes: There are times when perfection is called for, of course, but allow me to suggest to you that most of the time, good enough will do. There’s a point where it takes more and more energy to achieve smaller and smaller gains– where you’re putting in much effort to get a tiny 1% or 2% improvement…

The sciences are based on the premise that you publish as soon as your work is good enough– and let the rest of the science world try to perfect it; and yet we struggle: We concede a lot when we aim for less than perfection. Here are a few ways to get over these blocks and get your work, whatever it is, out into the world:

  • Planning: Begin your planning with an outcome in mind that’s good enough to get the job done. Then, set benchmarks that are ‘good enough’ to move on. At any step, of course, you can always go beyond good enough towards perfect— but focus first and foremost on building the necessary foundation.
  • Confidence: Confidence can be a tricky thing; just saying be more confident probably won’t solve all your problems. Building self-confidence is really a life journey, not a quick fix. But, most important you must give yourself the permission not to be perfect and accept good enough. Don’t make your self-worth contingent on perfection…
  • Make perfect mistakes: Mistakes are the stuff of personal growth, and making the right mistakes can help you build a firmer foundation for any project. Embrace mistakes as part of the process of getting to good enough. Embracing mistakes means more than  just accepting them, though– it means analyzing and learning from each mistake… Perfect doesn’t correct for mistakes– it ignores them…
  • Putting your best foot forward: There’s a difference between good enough and half-assed… A lot of the advice out there for perfectionists says to settle for 80%, 60%, or less— their hearts are in the right place, but getting to good enough isn’t about settling it’s about achieving…

In the article Pitfalls of Perfectionism by Alex Lickerman writes: As long as I can remember, I’ve been burdened with a desire for perfection in all my creative endeavors. But, my dogged pursuit of this verisimilitude has often proven itself to be the greatest obstacle to my achieving it. We lose perspective on the quality of our creations the moment we create them. And the more we pore back over them in pursuit of a fresh perspective, the farther it moves away from us.

Combine this with the need for perfection and the result is often paralysis. The irony, of course, is that while perfect may exist as a concept that impels us to keep trying to better our work, any judgment that we’ve achieved remains entirely subjective and therefore by definition– imperfect. This almost certainly explains why we can judge something perfect one minute and then hopelessly flawed the next without making a single change…

More commonly, we don’t so much finish a project as abandon it, not knowing what else to do to salvage it from our own obsessive tinkering… And when we finally return to it later, we often find that the time away from it was the only thing that actually had the power to grant us an improved ability to judge its quality objectively. If we’re lucky we see, not how to make it perfect but how to make it work…

Recognizing that inflection point– the point at which our continuing to rework our work reaches a law of diminishing returns– is one of the hardest skills to learn, but also one of the most necessary… What helps to release the compulsion to create perfection is the striving to put into proper perspective the importance of the act of creation itself. When I’m immersed in the creative process, nothing feels more important to me at that moment than the thing which I’m creating.

And though that sense of importance is what drives my passion and discipline (which in turn is what makes creating it possible at all), it also represents the source of the painful sense of urgency for the final result be perfect. Forcing myself, then, to recognize that in the grand scheme of life no one thing is so important that failing to make it perfect will permanently impair my abilities, and that’s what frees me from the need for it to be perfect.

Freed, then, from the need to attain the unattainable, I can instead focus on enjoying the challenge of simply doing my best. Because if we allow ourselves to remain at the mercy of our desire for perfection, not only will the perfect elude us, so will the good…

Don’t spin your wheels doing a perfect job, when a good job will do. There are diminishing returns for your diligence… According to Lee Knight; to attain a perfect thing, whatever that is, becomes infinitely more difficult as you near it… So, at some point, you have to cut your losses, and simply say–good enough. This is not a justification for shoddy workmanship or laziness, for that certainly would not be, per se, good enough. The point is more to know when to realize that any additional effort toward improvement would result in a negligible improvement, especially in comparison to the effort required. Do what’s important, maintain your high standards, but don’t let them get in your way…

Some researchers divide perfectionists into three types, based on answers to standardized questionnaires: First, there are the self-oriented strivers who struggle to live up to their high standards and appear to be at risk of self-critical depression… Second, the outwardly focused zealots who expect perfection from others… Third, those desperate to live up to an ideal they’re convinced others expect of them…

According to Mic Farris; customers want solutions, it’s very important to get them a good answer, something that explains most of what they need, and provide it to them quickly… Being productive is an incredibly important quality in business… In fact, being productive translates to being reliable and dependable to others, since they can always count on you to produce good stuff that meets their needs…

According to Amber Singleton Riviere; perfection is not attainable and chasing it is pointless. Excellence, on the other hand, means not letting yourself off the hook, not cutting corner, not coping out… It’s being extraordinary, which, as Steve Harvey says; requires doing extra, and extra isn’t always easy…

If you want to be a cut above your competition… being the go-to expert in your field… the name that stands out in the minds of your customers, then you have to strive for excellence. You have to know when you’re giving too much attention to things that don’t really matter (i.e., trying to be perfect) and when you need to give extra attention to those that do matter (i.e., being good enough)…

Leverage– Business Valuation– Know It, Understand It, Apply It: It’s a Pre-Requisite for Intelligent Decision-Making…

Business Valuation: Most business people know the value of their home, automobile… but have no idea on the value of their business.

Most business management rely on simple formulas or multipliers that do not take into consideration many business variables, such as– industry trends, technology, revenues, profitability, receivables, equipment and much more… But, quite simply, business valuation is a process and a set of procedures used to determine what a business is ‘worth’– it’s a measure of the worth of the business…

The premise of business valuation is that– we can make reasonable estimates of value and determine the worth of all types of assets, even intangibles… Some assets are easier to value than others and the details of the valuation varies from asset to asset; similarly the uncertainty associated with each value estimate is different for different assets, but the core principle remains the same…

There are those who are disingenuous enough to argue that value is in the eyes of the beholder, and that any price can be justified if there are other people willing to pay the price. That is patently absurd: Perceptions may be all that matter when the asset is a painting, sculpture… but we do not and should not buy most assets for aesthetic or emotional reasons; we buy business-financial assets for the cash flows we expect to receive from them.

Consequently, perceptions of value must be backed up by reality, which implies that the price paid for any asset should reflect the cash flow it’s expected to generate– various valuation models attempt to relate value and levels of uncertainty about the expected growth in cash flow. There are two extreme views of the valuation process: At one end are those who believe that valuation, done right, is a hard science, where there is little room for analyst views or human error.

At the other end are those who feel that valuation is more of an art, where savvy analysts can manipulate numbers to generate whatever result they want; but in reality, the truth lies somewhere in the middle…

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Business Valuation Methods: Business Valuation has become an intrinsic part of the corporate landscape. The corporate landscape has witnessed dynamic changes in recent years as– mergers and acquisitions, corporate restructurings, and share repurchases are happening in record numbers, both in the U. S. and abroad. At the core of the dynamics of all these activities stands some notion of business valuation.

The valuation methods are not only necessary for accounting purposes, but they also serve as roadmaps for– capital investors, venture capitalists, corporate acquirers… in order to know an estimated value of a company’s assets… Four standard business valuation approaches are:

  • Asset accumulation: This approach is based on the premise that it’s generally possible to liquidate the property, plant and equipment (PP&E)… assets of a company and after paying off the company’s liabilities the net proceeds would accrue to the equity of the company. Valuation of assets based on liquidity does not yield better results, if the fair market value of assets is in excess of the value of its assets on a liquidated basis.
  • Discounted cash flow method: This valuation method based on cash flow is  considered a strong tool because it concentrates on cash generation potential of a business. This valuation method uses the future cash flow of the company discounted by the firm’s weighted average cost-of-capital, plus a risk factor measured by Beta (measure of volatility or systematic risk); since risks are not always easy to determine precisely…
  • Market Value: This valuation method is applicable for public companies only. The market value is determined by multiplying the share price of the company by the number of issued shares. This valuation reflects the price that the market, at a point in time, is prepared to pay for all shares, and that determines the value of the company…
  • Price Earnings Multiple Valuation: The price-earnings ratio (P/E) is simply the price of a company’s share of common stock in the public market divided by its earnings-per-share. By multiplying this P/E multiple by the net income, the value for the business could be determined…

In the article Myths in Valuation by Aswath Damodaran writes: Myth–Valuation is a science that yields precise answers…

Reality 1: Valuations are always biased…

  • Truth 1.1: All valuations are biased. The only questions are how much and in which direction.
  • Truth 1.2: The direction and magnitude of the bias in valuation is directly proportional to who pays you and how much you are paid.

Reality 2: Equity valuations are always imprecise, but they are most valuable when they are most imprecise.

  • Truth 2.1: There are no precise valuations.
  • Truth 2.2: The payoff to valuation is greatest when valuation is least precise.

Reality 3: Complex valuations do not yield better estimates of value.

  • Truth 3.1: One’s understanding of a valuation model is inversely proportional to the number of inputs required for the model.
  • Truth 3.2: Simpler valuation models do much better than complex ones.

In the article Business Valuation: Three Approaches by ValuAdder writes: Quite simply, business valuation is a process, and a set of procedures used to determine what a business is worth. While this sounds easy enough, getting your business valuation done right takes preparation and thought.

Business valuation results depend on assumptions: For one thing, there is no one way to establish what a business is worth. That’s because business value means different things to different people… For example; business management may believe that the business connection to the community it serves is worth a lot, and an investor may think that the business value is entirely defined by its historic income… Traditionally, there are three fundamental ways to  measure what a business is worth:

  • Asset approach: The asset approach views the business as a set of assets and liabilities that are used as building blocks to construct the picture of business value. The asset approach is based on the so-called economic principle of substitution which addresses this question: What will it cost to create another business like this one that will produce the same economic benefits for its owners?
  • Market approach: The market approach, as the name implies, relies on signs from the  actual market place to determine what a business is worth. Here, the so-called economic principle of competition applies: What are other businesses worth that is similar to your business?
  • Income approach: The income approach takes a look at the core reason for running a business– making money. Here the so-called economic principle of expectation applies: If I invest time, money and effort into the business; what are the economic benefits and when will they be available?

In the article Valuation Myths by Lewis Schiff writes: Since valuation is part science and part art, it’s very easy to fall into misconceptions of the business valuation process… Two valuation experts recently identified common myths that could lead to poor management of intangible assets, and could also cause confusion:

  • Myth 1: Valuation is a well-defined and well-understood term.
  • Myth 2: Valuation of intangible asset is equal to price someone is willing to pay.
  • Myth 3: Valuation is equal to the cost of creating an item.
  • Myth 4: Each intangible should have only one official value.
  • Myth 5: Balance sheet provides good information about the value of intangibles.
  • Myth 6: Fair market value is a good construct for use with intangibles valuation.
  • Myth 7: There should be only one accepted method for valuing intangibles.
  • Myth 8: Current estimate of the future price must equal the eventual transaction price, in order to be considered accurate.
  • Myth 9: Patents cannot be valued credibly because each one is unique.
  • Myth 10: Value of company’s intangibles is the difference between its market value and the value of its tangible assets.

Determining the value of a business is a complicated and intricate process. Even valuation experts have referred to it as more of an art than a science. Valuing a business requires the determination of its future earnings potential, the risks inherent in those future earnings, an analysis of its mix of physical and intangible assets, and the general economic and industry conditions…

A business valuation is not just for a businesses preparing for a sale: In fact, there are numerous business and legal situations that require a detailed valuation. First, a detailed valuation is needed when a seller is considering merger, sale, acquisition, or shareholder wishes to buy-out other shareholders… Second, government or judicial authorities often require a business valuation for legal matters such as; shareholder disputes, divorce proceedings, eminent domain takings; employee stock ownership plans (ESOPs), S-corporation election, or breach of contract disputes… Third, taxable events, such as; estate and gift planning or charitable giving also necessitate a valuation…

Finally, a detailed valuation can help identify what’s needed– to increase the value of the business, attract new capital, project potential proceeds from an initial public offering (IPO)… With this many potential situations requiring a business valuation, it’s important to have an up-to-date estimate of the value of business. However, unlike fine wine, valuations do not age well. Sales can go up-or-down, demand for products and services can go up-or-down, the economy can go up-or-down: The state of a business can change pretty quickly… and a valuation becomes out of date, quickly– perhaps even by the time it’s done…

But, a valuation can be very useful when there is a specific reason for it, and a time frame within which to use it… Learn to understand the principles of valuation and what a valuation is trying to achieve, and then harness what the valuation provides to– identify strengths, weaknesses, opportunities, and threats in the business…

Idealized– WIN-WIN Strategy– It’s Less about Process, More about Tactics, Most about Results: The Prisoner’s Dilemma…

WIN-WIN ranks high on the list of over-used buzzwords, but many people have trouble understanding the counter intuitive notion that two sides can win in a negotiation… In theory, the win-win strategy is about changing conflict from adversarial– attack and defense– to cooperation. It’s a powerful shift of attitude that can alter the whole course of communication.

Win-win, win-lose, lose-win, lose-lose are game theory terms that refer to the possible outcome of a game or dispute involving two sides and more importantly, how each side perceives their outcome relative to their standing before the game. For example, a ‘win’ results when the outcome of a negotiation is better than expected, a ‘loss’ when the outcome is worse than expected. Two people may receive the same outcome in measurable terms, for example; $10 for one side may be a loss, while for the other it’s a win. In other words, expectations determine one’s perception of any given result…

According to Brad Spangler; situations where parties agree to act in both their own interest and in the interest of the other parties can be a win-win situation… The basis for any win-win situation is that compromise and cooperation must be at least as important as ego and competition. Everyone likes to ‘win’ but the question raised to create the win-win situation is: How can a situation be established where nobody loses? A win/win approach rests on strategies involving: going back to underlying needs; recognition of individual differences; openness to adapting ones position in the light of shared information and attitudes; attacking the problem, not the people…

Even when trust between the parties is very limited, win-win can be effective, and if there’s some doubt about the other person keeping their end of the bargain you can make the agreement reciprocal. For example; I’ll do X for you, if you do Y for me: X supports their needs, Y supports yours. I’ll arrange for the demo, if you bring the people. I’ll help you draw up those figures for your reports, if you schedule a meeting with the project manager… Usually, co-operation can result in both people getting more of what they want. The win-win strategy is conflict-issue resolution for mutual gain.

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In the article Habits of Highly Effective People–Habit 4: Think Win-Win by Stephen R. Covey and Joseph M. Mellichamp write: Win-win is misused very often and it mostly comes down to a win-lose proposition in a pretty package. Win-win is about adopting a new paradigm; the paradigm of ‘creation‘, instead of the paradigm of ‘competition’. In summary, there are seven different paradigms of interpersonal interaction:

  • Win-Win: I win and you win. Solution that creates value for all parties involved. This is based on the premises of ‘abundance’.
  • Win-Lose: I win, you lose. Highly competitive mindset, based on the premises of limited ‘rewards’.
  • Lose-Win: I lose, you win. One party accepts a loss… Sounds strange? Ever caved in to an apparently pointless  argument, saying; Alright, if it’s that important to you, we’ll do it your way. That’s a typical lose-win situation.
  • Lose-Lose: All parties are very competitive and need to win at all cost. This ultimately ends up in lose-lose situation.
  • Win: Only focused on winning, regardless of what it brings to others. The others are not in the equation here.
  • Win-Win or no agreement: All parties want to agree to a win-win solution, but if it’s not possible, let’s agree to disagree agreeably.
  • Compromise: All parties win and lose ‘a little’.

The paradigm of ‘abundance’ is critical– it’s the basis for the win-win concept; it says that there’s enough in it for all parties and, it’s not about getting a bigger piece of the pie, it’s about making the pie bigger… However, if there are limited ‘rewards’, then accomplishing a win-win is difficult, if not impossible… Win-win is a paradigm, a mindset… You have to genuinely want to achieve a win-win solution and not just aim for it– and then just ‘settle’ for win-lose; if it proves too difficult…

When it comes down to achieving a goal through a ‘relationship’, the win-win mindset calls for seeing it from the other party’s prospective, i.e., trying to understand what the other party wants to achieve, so that you can try to find a way to get their ‘wants’ fulfilled. In the end, if you want ‘win-win’ to succeed; you must make mutual agreements that ‘define it’, have reward systems that ‘reward it’, and processes that ‘support it’…

In the article What Does Win-Win Negotiation Mean? by Robert Menard writes: Negotiation strategy always has a profound impact on business… There are four basic strategies: win-win, win-lose, lose-win, and lose-lose. Selecting the appropriate strategy depends upon how each of the parties values the ‘issue’ and the ‘relationship’. A visual-aid works well to explain this concept:

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These four quadrants represent the four different negotiation strategies available. The choice of negotiation strategy depends on the value both parties place on the ‘issue’ and the ‘relationship’: Take win-lose, in lower left quadrant; it’s the strategy that’s most frequently practiced, and it’s used when the ‘issue’ matters more than the ‘relationship’…

Take lose-win, in upper right quadrant; it’s the strategy that’s used when the ‘relationship’ is valued more than the ‘issue’… Take lose-lose, in lower right quadrant; it’s the strategy used when both the ‘issue’ and the ‘relationship’ have little value; and it might only occur in rare situations…

Finally, take win-win, in top right quadrant; it’s the strategy used when both the ‘relationship’ and the ‘issue’ are very important, and when both parties are interested in a long-term commitment… Ideally, win-win should be the preferred strategy when dealing with major customers and suppliers…

However, many people who talk about a win-win strategy actually hedge their actions  because– all that ‘really’ matters, to them, is that ‘they win’…

In the article Win-Win Really Means Win-Lose by Douglas E. Noll writes: In my opinion, win-win expresses a superficial niceness while papering over differences. Seeking a win-win outcome creates distrust and frustration… Win-win is one of four outcomes from a game called the ‘Prisoner’s Dilemma’; a game that theorists devised thirty years ago to examine strategies of competition and cooperation…

The game is a favorite research topic for psychologists with hundreds of experiments conducted; as a result, win-win is used to describe an optimum conflict outcome. However, many experts say that the ‘win-win’ concept is dangerously simplistic… For example, in addition to unrealistic assumptions underlying the win-win orientation, the very nature of the term ‘win-win’ implies competition instead of cooperation: Winning means beating your opponent. The term win-win is consequently unconsciously translated as, I win more than you win– or, I don’t care if you win, so long as I win. Thus, win-win is a self-contradictory euphemism.

People say they want a fair resolution, but what that really mean that the resolution has to be on their individual terms. When someone says he wants a win-win solution, contextually that does not make sense. Hence, the win-win idiom often creates mistrust… In the world where large corporate cultures and small teams are supposed to express shared values, win-win conflict resolution strategies are often applied…

That is, it’s supposes— that we can come together and resolve our differences, such that everyone will come out winners. It’s a cultural discourse, not a neutral one. This is the discourse of nice guy liberalism, the passive-aggressive discourse of politeness, the patronizing discourse of trying to get what you want while trying to tell someone else that they are getting what they should want.

Some people play this discourse better than others. Indeed, agreeing to disagree may be the optimal outcome, even the most productive one: The best negotiation should not be forced to end with win-win… Generalizing across all conflict contexts; win-win is not a genuine conflict resolution, but rather a mechanism for persuading others that they can have what they want, without really giving anything away. It’s clever, but not very productive for long-term conflict resolution.

Thus, win-win is neither a process nor an outcome… Thus, be aware of the fallacy of win-win: Conflict or negotiation is far more complex than game theory, and it’s not reducible…

Ever heard someone say that they ‘gave away the farm‘? Despite our best intentions, we sometimes negotiate too much value away to arrive at an agreement; even when we go into negotiations with high motivation, grandiose, and exuberant spirit of cooperation. Today, many hear that ‘win-win’ negotiations are all the rage… Yet it’s all too common that most negotiators fail to understand that this term represents achieving a win-win negotiated ‘settlement’, instead of a win…

According to Lewis Schiff; a survey of business executives found that they overwhelmingly disagreed with the idea that win-win solutions are ‘best’, and it was suggested that the notion of win-win is widely regarded as a dangerous trap; that having a win-win perspective almost guarantees that you’ll be the only one offering concessions in order to reach agreement. Almost all guides to negotiating recommend the same three-step alternative to win-win: First, write down your wished-for goals. Second, study what the opposition wants. Third, write down the conditions at which you will walk away…

According to Michael Donaldson; these three steps are called– wish, want, walk… However, the only full-proof ‘win-win’ strategy is simply; treat customers the way you would want to be treated– with integrity along with providing good quality products… and then, you will be well on your way to making every customer feel like a winner, and your company will also be a winner, too There are three things that you must keep in mind:

  • The customer is not always right.
  • There are some customers you can never please no matter what you do.
  • When faced with an un-winnable situation, your duty is to mitigate the loss.

 

Reinvent Your Business Model: Think Customer, Aim Big, Move Fast– Kill the Old Business Model Before It Kills You…

Business models describe the rationale of how an organization creates, delivers, and captures value (e.g., economic, social, cultural, or other forms of value). 

Simply put, the business model describes– how a business positions itself within the value chain of its industry, and how it intends to sustain itself… The business model converts innovation to economic value, and spells-out how a company makes money by specifying how it’s positioned in the value chain… 

Whenever a business is established, it either explicitly or implicitly employs a particular business model that describes the architecture of the value creation, delivery, and capture mechanisms employed by the business enterprise– it reflects management’s hypothesis about what customers want, how they want it, and how an enterprise can organize to best meet those needs, and make a profit… Ultimately the success or failure of a company depends first and foremost on how well its business model design matches customers’ priorities…

According to Joan Magretta; a good business model answers Peter Drucker’s age-old questions: Who is the customer? And what does the customer value? It also answers the fundamental questions every manager must ask: How do we make money in this business? What is the underlying economic logic that explains how we can deliver value to customers at an appropriate price?

The creation of a business model is much like writing a new story, which is a variation on the generic value chain underlying all businesses. This chain has two parts: First, associated with making something; second, associated with selling something. A business models need to pass two critical tests: the ‘narrative’ test (the story doesn’t make sense) or the ‘numbers’ test (the profit & loss doesn’t add up). However, a business model is not the same as strategy; it describes a system but they do not factor in competition…

According to Michael Porter: Dealing with competition is a strategy’s job and doing better than your rivals, which means being different… Ultimately, both a good business model and effective strategy are required for business success…

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In the article What Exactly is a Business Model? by Vivek Wadhwa writes: Many people in business talk about business models. But, if you quizzed a random sample of these people, you’d find that they really don’t know what a business model is… The reality is that a business model is like the old saying about teenage sex: everyone talks about it all the time; everyone boasts about how well he or she is doing it; everyone thinks everyone else is doing it; almost no one really is; and the few who are fumbling their way through it incompetently.

For almost any traditional business, the business model is so obvious that you don’t have to talk about it: Stores sell goods. Restaurants sell meals. Hotels sell lodging. Airlines and taxis sell transportation. Think of the business model as how you make money. How you get money out of your customer’s pocket and into your bank account. The new businesses, mainly Internet businesses, need to explain how they make money.

Some businesses still get away with generating traffic, so-called eyeballs, but not money. The underlying assumption in these cases is that the traffic means a likelihood of being able to generate money– somehow, some day. And if you want to be really trendy, use the phrase ‘business model’…

In the article Kill Your Business Model Before It Kills You by Ron Ashkenas writes: Why do business leaders wait too long to modify or abandon their business models? The U.S. Postal Service, even with the constraints of its government mandate, has known for years that its traditional model was coming apart; Kodak realized that film was being replaced by digital media long before it changed its investment strategy; even a sophisticated G.E. waited too long to reorient its lighting business away from incandescent bulbs.

From these cases, and others over the years, it seems to me that there are two keys for getting ahead of the business model curve, both of which apply to managers at all levels: First, remember that no business model lasts forever. The most dangerous trap that any manager can fall into is complacency. Peter Drucker reportedly once said; the biggest curse for any business was twenty years of success… Markets, environments, and technology can change so quickly that no amount of profit today guarantees success tomorrow.

Years ago, during the ‘dot-com’ boom, Jack Welch required each of his businesses to go through an exercise that he called ‘Destroy Your Business.com’ in which he asked them how ‘dot.com’ competitors could possibly put them out of business. In other words, long-term success is more likely when we welcome the anxiety of competition, instead of avoiding it. The second key is to continually and actively be on the lookout for new business opportunities that can potentially replace the current model. If you only invest in refining today’s business model you’ll get locked into it.

Testing, incubating, and investing in alternative models hedges against that possibility. Sure there will be failures, but with enough persistence and creativity, some viable alternatives will emerge. Nobody wants to be in the position of trying to defend a business model that has little runway left. So instead of assuming that it can’t happen to your business, take the lead in looking for alternatives– long before the competition leaves you in the dust…

In the article Your Business Model is Obsolete by Geoff Colvin writes: Innovation is the hottest word in business, but most of the discussion centers on products and services. The more profound challenge for most companies now is imagining a new business model, a new answer to the fundamental question: How do we make money? All business people face the challenge, sooner or later– even if business model has worked for decades, even if it’s working okay right now, odds are that it soon won’t be...

Not since the Industrial Revolution have we seen a longer or broader list of companies whose business models are suddenly obsolete. Start with virtually all companies in the media business, or any company that relies on owning copyrights or selling advertising. Then look at how major retailers– Best Buy, Target, Wal-Mart… are rethinking their models in response to show-rooming (i.e., browsing in-store and buying online from eBay, Amazon…)

The whole education industry needs a new model. So do banking, the post office, computer makers, big-pharma, music, and telecoms. They all need new business models, and almost all are having a hard time finding them: Business model innovation is a competency that doesn’t exist in most companies, since it never had to... For example, the newspaper business model worked great for 200 years; twenty generations of management didn’t have to change it.

Why should we expect that today’s generation would know how it’s done? It’s the same in most companies. Even in today’s environment, your new business model will not last nearly as long as the old ones… The new normal is Amazon: It launched with an innovative model as an online bookstore. Then, it also became a marketplace for other booksellers. Then, it started offering other products (e.g., clothing, computers…) requiring far different distribution infrastructures; then, it began selling digital books, music, TV shows, and movies online; created its own branded devices (e.g., Kindle and Kindle Fire); added web services for companies; and is now investing hundreds of millions of dollars in original programming, and in warehouses for same-day delivery of groceries and other merchandise…

The model is changing continually. Peter Drucker noted that ‘sloughing off yesterday’ is almost impossibly difficult, yet every organization must get used to doing, it regularly. The largest obstacles will be weak imaginations, threatened interests, culture… Business model innovation is the new essential competency: It’s hard, and it will separate tomorrow’s winners from the losers.

In the article How Sustainability is Reinventing the Business Model by Eric Lowitt writes: Do you remember when business was not only uncomplicated, but dare I say, easy? You found customers with unmet needs, created a solution to those needs, and sold the product or service at a profit… Essentially you created a business model; identify customers, create a solution customers want, source the needed materials to put the solution together, and get it to the customers– that mapped out a path to growth…

There are trailblazing companies that are rewriting conventional business thinking to overcome the challenge of sustainability. These companies view sustainability not as altruism, not as ‘do less bad’, but as an arrow in their competitive strategy quivers. They are marrying profitability with sustainability by seeking– partnerships with strange bedfellows, financing from unique sources, and ideas from the crowd. In short, these trailblazers are reinventing their business models.

Companies used to set goals they were capable of achieving on their own, that is; be number one or number two; go global…To achieve these goals, companies have entered new markets, invested heavily in developing countries, and adapted to the realities of the Internet. As long as they applied their core capabilities correctly and swiftly, they controlled their own growth trajectory. But, not anymore: Trailblazers think not only bigger, but also broader when setting the paths for growth. Sustainability is the catalyst that is leading trailblazing companies to reinvent their business models…

We are witnessing a fundamental paradigm shift in business today; business dynamics have evolved beyond many of current business models… According to Carol Kinsey Goman; today’s business leaders are experiencing shock as their old business model are breaking down, and many business leaders remain emotionally attached to theories that have long since been disproved… We are only just beginning to understand what it means to move from a purely analytical ‘objective’ perspective to one that includes; subjective, intangible and emotional aspects of business

In 1982, John Naisbitt wrote in his classic book ‘Megatrends’ about the collapse of the ‘information float’. He defined information float as the amount of time information spends in any media channel– the amount of time between transmission and reception. Today, technologies such as; social media, smart phones, high-speed data mining, ubiquitously networked electronic devices… have precipitated the collapse of the customer feedback float— the amount of time it takes a vendor to understand whether their product suits the market’s interests. This collapse of the customer feedback float becomes part of the new psychology behind the new business models…

The old business model was– market research leads to a defined problem that leads to a defined solution that leads to big scope development… Whereas, the new business model says; take a step back from any pre-defined ideas about a product and think about possible consumer pains, undiscovered needs… Allowing your perspective to shift from a big-plan-specific vision to a fluid-discovery-process… Seeing business growth as a series of discrete discoveries, instead of an over-reaching plan, that wires your brain for flexibility. This, in turn, will enhance creativity and ability to innovate… It’s a new way of thinking; a clearer, braver way to think…

According to Clayton Christensen; one of the most compelling cases yet for the maxim: You can build a better mousetrap, but that doesn’t mean they will necessarily use it… Christensen’s argument goes something like this; innovations that disrupt markets nearly always start with a new, or newly applied, technology that offers a significant improvement over previous ones. But, great technology alone is not enough for success.

To truly shake things up in a market, innovations also needs– new business models and value networks– new supply chains, channels to market… and, sometimes it can take a long time for new business models and value networks to evolve…

However, it’s time for business models to get back to being actual business models: If you really want to grow your business, then base your business model on innovation and new value creation; most important–value what your customers really wants and are willing to pay…