Vivek Sood's Blog, page 56

Why should the corporate world look to egolessness in 2014

2013 has been a breakthrough year for the top echelon of professionals around the world. One of the reasons, in my view, is the focus on mindfulness. For the first time, I have seen the corporate world embrace a practice adopted in the personal lives of many masters in various fields. As the two arenas come closer together, mindfulness is now firmly established as a practice worthy of attention. It sharpens insights, improves judgment and allows leaders to see around the corners. In other words, mindfulness brings you the wisdom you need to lead from the heart.

May I suggest that if you have been already practicing mindfulness in any of its forms then, in 2014 you should try and aim for the next level – egolessness. With the wisdom gained through mindfulness, egolessness brings you the courage to apply that wisdom in your daily life. I continue to notice that despite the fresh insights and sharpened judgment that comes from mindfulness, many professionals still feel that they have been stuck in a rut for the last decade or more!

The topic of this entry seems to be outside the boundary of what I normally write about in this blog, which is about corporate effectiveness and efficiency, business networks, global supply chains and the like. It is not purely random that towards the end of the year, I started expounding on esoteric material beyond the realm of concrete material prosperity.

This realisation came in a conversation over lunch with one of my clients, who despite a very successful 2013, appeared dissatisfied. At a similar lunch about 12 months ago, when he sounded unhappy with his results for 2012, I suggested mindfulness to him. He expressed great interest in the practice and has now made it an integral part of him own life as well as his corporate vocabulary. But his current dissatisfaction was rooted in trivial interpersonal dynamics, which got us on to the topic of egolessness.

Requested to explain what my view of ego was, I gave him an analogy of all the human body cells being formed essentially by the same mass of protoplasm, yet separated by a thin cell membrane which keep them apart and functioning as a single entity. Cells rely on each other, yet also act as separate entities with their own cell membranes that allow useful nutrients to permeate and toxins to be expelled. If the cell membrane becomes too rigid, or too unidirectional, the cell will surely die, either of starvation, or of toxicity due to too much nutrition.

Egolessness allows you to accept positive information and vibrations that support growth and positive transformation, and discard negative information that stunts growth or stifles accomplishment. Lack of egolessness in individuals takes the form of arrogance while in corporations it takes the form of hubris, and at national levels it takes the form of jingoism. I am sure you have seen enough examples of all three, as well as the results that follow.

Egolessness allows you to make difficult decisions, especially in tough times, stick with these when challenges get even more intense, and come out on top irrespective of the odds. Even more surprisingly, you do not feel the stress or strain of your endeavor. I still vividly remember after more than 20 years, navigating my ship for 72 hours straight while dodging one of fiercest storms in the East China Sea, and not feeling any stress or strain during or after the endeavor. Although I do not know how I got into that mindset at the time, all I knew was that we had to somehow keep out of the storm to save the ship and its crew.

I am not an expert on the topic of egolessness, but I am sure there is an abundant amount of information out there for your own research. Nonetheless, if the above analogy with cell membranes, and the incident of my ship in the storm make sense to you, then in 2014 try egolessness and see if it brings more peace to your life. After all that is the goal of all human endeavors – including getting hold of power. I will be most interested in hearing about your experiences with egolessness and mindfulness in corporate life – you can correspond with me via v(dot)sood(@)globalscgroup(.)com.

Outcompete anyone using your business network

Thought leaders have a five star business network. They leverage of the value created by their business and supplier contacts to outcompete rivals and stay relevant. Your business can outcompete rivals too using its network. There are a number of ways your business can achieve this goal.

Firstly, build a good business network. To outcompete your competitors, you must first have a network or trusted suppliers and customers. You can build your business network by joining your local chamber of commerce, optimising your online and offline business networks and attending regular, relevant networking events.

The second key to outcompeting your rivals using your business network is to have your network communicate your business proposition. It is often said that the best advertising is done by word of mouth. Therefore, getting your network to communicate why customers should buy your products is essential to outcompeting anyone.

The third part of outcompeting your rivals using your business network is to give your network ‘buy-in’ on your products. Your business needs to clearly demonstrate its value to your network, otherwise it will have difficulty demonstrating its value to customers.

The final way that you can outcompete your rivals by using your business network is to continually review the contacts in your network to ensure that your contacts meet your goals. Are your contacts help you learn top sales strategies? Do they help promote innovation in your firm? Do they really have your interests at heart?

New trends for management implied by the complexity increase

We have no choice but to accept that complexity is omnipresent in every organisation today. Complexity took a very important place in organisation because it is bigger than it used to be one century ago. For this reason, managers and executives have to learn how to run their business while managing complexity.

In a previous article, we talked about the pillars of complexity, on which they must rely: strategy alignment, transparency, sustainability and modularisation.

Then, complexity involves new methods of management for organisations. Therefore, this new trend is the cornerstone of a great evolution for future leaders. In effect, the increase of complexity is an opportunity for leaders. Managers and executives who would succeed in managing this complexity better than others will become leaders in their organisations and in their markets.

 First of all, competition is not a solution. Although everyone wants this main role of the leader, they have to work in team within the company. None manager can succeed alone in this very complex system. The leader is important but this one has to work with a team, which supports him. Working in a team is the key to good communication, close communication between the members. In this situation, people have to work in united systems that enable efficient communication. Small groups will think faster and more effectively, towards one precise goal. Thus, decision-making will be much more effective than if each one tries to work on his own to become the leader.

 The new trend for complexity managers is that they have to be very reactive to any situation. In effect, in today’s complex systems, a leader is someone who will be able to gather the conditions necessary to improve faster. He must be able to facilitate fast and innovative processes that are supposed to make adaptation to changes easier. That is the reason why this new trend is an opportunity for new leaders. Rigid control is not the solution to complexity. Despite what we could think, rigidity will not prevent organisations from complex systems. It could even be the contrary because rigidity keeps us from seeing what is really happening in the entire system. In fact, we would think all our predictions would be accurate whereas anything could happen.

Systems have to be flexible so managers and executives can act consequently and then find adaptive solutions.

 This new trend also includes the importance of relationships. In complex systems, interactions and interconnections are the principal characteristics of our organisations. That is the reason why relationships and business networks are so important nowadays. Therefore, leaders must also be those who think permanently about their business network. It is impossible that any organisation cope with complexity without building a proper and efficient global business network beforehand. Future leaders cannot neglect this point if they want to manage complexity in their organisations successfully – or at least, as successfully as it is possible, taking into account the riskiness of our current complex systems. The importance of relationships in the construction of your global business network for complex systems is analysed deeper in Vivek Sood’s book, The 5-STAR Business Network (http://bit.ly/5-STARBN).

Complicated Systems vs. Complex Systems

Complex organisations have always existed, but we have to admit that the level of complexity has tremendously increased over the past centuries, especially over the past decades. Complexity now touches everyone, and every organisation. This is something unavoidable, and that is the reason why companies have to learn how to manage it, how to live with it. The most important difficulty met because of complexity is prediction. In effect, today’s systems are so complex that it becomes very difficult to make predictions about what will happen in the future, even though in a close future. Interactions between the parts that constitute the systems are innumerable and this is what makes them complex.

 To be able to manage complexity, the most important thing is to understand that it is not the same as complicated systems. If you want to be a leader, you should be aware of the difference between complicated and complex. You cannot pretend to be a leader without understanding these concepts because they can actually define your business outcomes. In effect, managers often confound complicated and concept whereas they are two very different concepts, and the biggest mistakes come from this confusion. Complicated systems are easier to manage than complex ones. Indeed, complicated systems also contain many parts, as well as complex systems. However, in a complicated system, they usually follow a pattern, which make it much easier to make predictions and to manage the system. On the other hand, in complex systems, interactions do not follow any pattern and that is the reason why predictions about the future are impossible.

 What made systems more and more complex?

Nowadays, systems are built by many systems. Thus, systems are complex because in one great system, there are actually many parts that are systems themselves! At first, small parts were connected, which made the systems; but then, systems have also been interconnected, which made bigger systems, and so on. This was because of the Information Technology revolution. However, it is possible to use these IT systems to manage this very complexity. Thus, everything is interconnected. Business networks have become great and that is what made them complex. Vivek’s book, The 5-STAR Business Network (http://bit.ly/5-STARBN), explains the functioning of great business networks, and its complexity.

 What is complexity then?

 As we said, complicated systems follow patterns and accurate predictions are possible to make. Complexity is a little more complex, if I may say so.

 One of its characteristics is multiplicity: the number of interactions is difficult to determine, especially because it can be infinite. In effect, there are so many systems that are somehow interconnected that it became impossible to be aware about all the interactions. We are not even able to determine the number of systems that are interacting together, so how could it be possible to make predictions about them?

The second property of complexity is interdependence. Many parts are connected and they form a system. Then, these systems are also connected. Consequently, every part of every system depends on many other parts and systems that can affect them in many different ways. Besides, if one connection affects many parts, the consequences are also multiplied, affecting again many interconnections. Thus, the multiplication of connections involves the multiplication of consequences, which might explain the inability to predict any of these consequences.

A third main property of the concept of complexity is diversity. So many systems are related that they cannot be alike. The result is obviously heterogeneity.

 Therefore, these properties of complex systems imply many difficulties, including inexplicable situations sometimes. In fact, the consequences can either be positive or negative for your business because of unexpected interactions and interactions between systems that are already complex themselves.

When all the results of all the interconnected systems and parts are put together (because results are also interconnected), the final situation can seem crazy. You may think bad results can come from nowhere, but this is actually not true because every decision you make is important. In fact, one decision-making has not one unique consequence on your own business, but it has many consequences (whether they are positive or negative, whether they are big or small), on many systems, organisations, or businesses. Although you cannot explain all the consequences of these decisions you made, you have to learn how to manage complexity, to limit the uncertainty, by making the right decisions. Sometimes, you might not see the consequences of your decisions, but they can be very important and determining, even if hidden and inexplicable.

 To summarise, the difference between complicated and complex systems is crucial because the consequences are not the same. Predictions are accurate in complicated systems whereas they are not in complex systems. Although you cannot understand or explain everything in complex systems, you have to manage it the best way you can, in order to avoid great mistakes that could be fatal for your business. What can be interesting, to conclude and summarise the concept of complexity, is author Jeffrey O’Brien’s writings. He thinks, “‘Complex’ is a synonym for ‘unpredictable’ – or at least not easily predictable”. According to him, “interactions are not linear, but emergent”, and he also says, “computers can help, but they must be augmented with perception, reasoning, cognition, and intuition”.

 by Anais Lelong

How to maximise both efficiency and effectiveness at the same time

 In his book The 5-STAR Business Network (http://bit.ly/5-STARBN), Vivek Sood talks about prophecies coming from an article written in the Harvard Business Review in 1999. Although this article was written almost 15 years ago, the authors, John Hagel III and Marc Singer, were very forward thinking about companies. In fact, they foresaw organisations would focus so much on core competencies that they would specialise in one particular area of efficiency – customer relationship management, infrastructure and assets management, or competency and innovation management. This is what de facto happened. Companies started to focus on core competencies and this unbundling led them to high specialisation. Some organisations decided to put their money only in innovation and, as a result, they became highly specialised in innovation and new product development, which is good in some points, but reduces their general efficiency. In other words, too much specialisation leads to high effectiveness in the area on which they choose to focus, but it reduces the general efficiency of the organisation. There are also companies that decide to focus on the consumers. Thus, they concentrate their efforts in understanding the consumer’s mind and needs, but it prevents them from improving their products, in terms of innovation, and their infrastructure, in terms of asset management.

 Therefore, to be efficient and effective at the same time, your company needs the support of its network. In fact, although focusing on core competencies is essential in today’s businesses, it is also essential not to neglect the other areas. This is the role of your network. When talking about these new businesses in his book, Vivek Sood calls them “Super Networked Businesses”. In fact, you can focus on core competencies, as long as you have an appropriate network to back your core competencies’ processes. Then, companies can reach effectiveness and efficiency at the same time by using strategically their business and supply networks. Besides, your IT system can help you reach these objectives in the global business environment. One more time, collaboration with your partners is very important in this perspective. In effect, your business will benefit from synergies provided by the collaborative teamwork within the supply network, and you can go even further to achieve synchronicity. The concept of synchronicity has been developed in a previous article and more information is also available in Vivek Sood’s book.

 Therefore, through the teamwork of companies’ networks, a process of re-bundling has been appearing since the 00s and 10s. These companies are building super networked businesses, and collaboration enables to be efficient and effective, putting customer, innovation and infrastructure areas back together. Today’s technologies and methodologies can help you build super networked businesses, especially using teamwork. In fact, all the areas within a company must be aligned with the same strategy and on the same features. This is the reason why collaboration is important within the network, as well as within the organisation itself. This is the key for the success. Consequently, in this article, I would say the key word is “teamwork”. This word reveals the importance of collaboration to build super networked business, which will be effective and efficient at the same time, in today’s globalised business world.

How to manage complexity while expanding your business

We have to admit that the world has become more and more complex over the past centuries, and it is even truer for the past decades! We are interested in business and it is not less obvious about it. Interaction and interconnectivity between people are a proof of this increasing complexity in today’s business world. Indeed, the first ones who started to think about applying complexity science to management did by the 1990s, which is pretty early. However, technology and systems were not developed enough to be able to manage complexity at this time.

Jost Hoppermann, analyst in the technology and market research company Forrester Research, defines business complexity as the fact of having several interdependent and interconnected stakeholders, IT systems and organisation structures. In effect, all these interactions involve many people: employees, suppliers, clients, investors, and even competitors. Besides, organisation structures involve several divisions, subsidiaries, as well as joint ventures, and everything needs to be managed properly, at the same time, by many people who consist the business.

 Therefore, we have no choice but to admit that complexity is unavoidable and omnipresent in great businesses. However, businesses have to expand themselves and their relationships with other parties if they want to survive against competitors. You can find more about business relationships in Vivek Sood’s book The 5-STAR Business Network (http://bit.ly/5-STARBN), which will teach you a lot about business networks and relationship building. That is the reason why the only solution is to learn how to manage this complexity. Thus, the concept of complexity management appeared. It is a business method, which aims at optimising the complexity in companies, to make it beneficial and profitable.

 The consequences of complexity appear at every step of the production process and along the value chain. That is the reason why nobody should neglect the effects of complexity. In effect, depending on how you manage complexity, your business can whether be very successful or go bankrupt in very little time.

An effective complexity management process along the entire supply chain can increase tremendously the profitability of your production process.

Complexity can be good, but its effects have to be anticipated beforehand the implementation of new decisions made. Indeed, as we already know preparation is crucial and the effects of complexity can also explain this. Preparation can avoid many troubles by anticipating this complexity and acting accordingly. To be beneficial, complexity needs support. Thus, systems and processes have to be implemented to support complexity. That is the reason why companies must include them in their strategies. The efficiency of complexity management relies on several pillars that you must pay attention to, but we will see those pillars and complexity management methods in a later article.

 To conclude this article, let us say that complexity is natural for business that decide to expand and grow in their market, as well as in new markets. The important point to remember here is the importance of its management. In fact, complexity is not a problem itself, but its bad management is. Complexity is essential, and it can be very profitable for your business if you use it properly and through a smart approach.

5 Things You Must Know About Social Media

Although social medias are obviously helpful tools of communication for your business, there are some things you should know before initiating any strategy. In fact, you cannot implement an appropriate social media strategy if you do not know the bases and the common traps. Then, this article aims at underlining a few important points people usually ignore about social media, especially in businesses.

 1.         Practically free communication tool

Traditional medias are more expensive for your business than social medias. Obviously, you will have to pay people to carry this work. However, compared to traditional media, like advertising in print, social medias are much less expensive. The only thing you will have to pay for will be your staff and the management of the team who will be dealing with social medias. However, the price is very low compared to the earnings provided (and compared to what traditional medias would provide).

2.         There are many

When talking about social medias, people first think about Facebook and Twitter, which is understandable. However, many other social media are available for your company to interact with customers and partners. Social networks like LinkedIn are very important, but there are also social news, etc. Besides, despite the fact it is not the first thing we think about, people watch a lot of videos and this cannot be neglected. Youtube and Vimeo, for example, can be very helpful in your communication strategy.

 3.         They are for everyone

Social Medias are not websites for kids or teenagers, everyone – or almost – uses them nowadays. For example, according to Facebook the age group users who are increasing the fastest  are people over 35 years old. Then, if those people are your customers, you have to use social medias to interact with them. There is no other option for your business to make its place on the market.

4.         Social Media keeps evolving

You – and even more the team in charge in your business – must keep an eye on what is happening in the world of social media every single day. In effect, the age of 2.0 is evolving very fast and all the time. If you want your business to survive against competition from all over the world, you have to adapt to this continuous evolution. See what others are doing for their business, and if you are not already doing it, then you are late, and if you do not catch up fast, you will quickly be left behind.

Social media devices also evolve over the time. A few years ago, your presence on social networks may have been enough, but today, social media is going further. In effect, for example, applications for Smartphones are becoming more and more important. Social medias keep evolving, as well as business networks themselves. Vivek Sood’s book, The 5-STAR Business Network (http://bit.ly/5-STARBN), will give you a better view of the evolution and importance of business networks.

5.         A Two-way communication tool

They are great channels of communication in which you can exchange with people. It is not just about communication, but also sharing and discussing. This is amazing because nowadays, this is what causes progress. You can finally be aware instantaneously about what people say about you, your products, and your company. Thus, this is a great communication tool, which involves many actors from everywhere.

by Anais Lelong

How to develop a business network

Developing a “five star” business network is not as hard as it seems. People say that to develop a powerful network requires years of hard work. However, all it requires is three things: knowledge of who you would like to develop a connection with, your purpose for connecting and knowledge of the value you can bring to his/her career and also your follow-up.

The first element to building a business network is to to have a knowledge of who you want to connect with. This may sound obvious but he key element in preventing you from building a business network is confusion over which type of connection you are trying to make. If for example, you want to find a mentor for your civil engineering business you would not network with mechanical engineers.

The second element to building a business network is to know the purpose of connecting. In order to get the most value from your business network, you need to know why you are connecting. Are you looking to improve your knowledge of your supply chain? Do you want to find someone with sales expertise for your business?

The third element you need to consider in developing your business network is to consider what value you can bring you to your potential connection . Do you have a unique viewpoint on social media or message that you can share? You are less likely to be able to build a “five star” business network if you do not have a ‘massive transformation’ you can bring to someone’s network.

The final element you need to consider in developing a five-star business network is your follow-up. To maintain a high quality network of individuals interested in your success, you needs to follow-up and have a buy-in and have a commitment to their success as well.

Products, customers, competitors, subsidiaries, countries, and partners, all increasing: are they making your business too complex?

Every company wants to improve its results, and to do so, they can use very different ways. The most common ways they use to achieve this goal are whether improvement of the quality or the reduction of their costs. How do they do? What methods do they use? They want to sell more products, in more many locations, to target more customers and achieve better results. On the other hand, they also want to cut their costs and that is the reason why they implement subsidiaries in many different locations and countries because they think it is always a good solution. However, sometimes (if it is not often), they happen to be wrong about their evaluation and analysis about the process they chose to carry out.

 However, this article is not about preparation and wrong analysis of opportunities, but it aims at proving that complexity is the only result they get through these decisions. First of all, what is complexity? Complexus (Latin) means “twisted together”, which is quite a good definition of this concept. According to Wikipedia, “Definitions of complexity often depend on the concept of a “system” – a set of parts or elements that have relationships among them differentiated from relationships with other elements outside the relational regime. Many definitions tend to postulate or assume that complexity expresses a condition of many elements in a system and many forms of relationships among the elements.”

Therefore, complexity appears through tremendous numbers of interactions between the numerous parts of a system. In fact, complexity keeps increasing while systems have more and more parts, which makes sense obviously.

A very small business does not imply complexity because interactions and relationships are limited to a few numbers of parties and people. However, there might not be enough complexity in those businesses because it also means that results will not be as good as for bigger businesses. Obviously, we are talking about profit here.

Consequently, it is very logical that companies want to grow, in order to improve their results and beat their competitors in the market.

However, at some point, companies that cannot stop increasing anymore can end very badly, and this is because of over complexity. Beyond a certain point, expansion involves complications and the turnover starts to decrease, as well as profitability.

 Therefore, every CEO should have a look at its entire business, and the parties and relationships that consist it. In effect, your business might be becoming over complex because of useless interactions that make the business go down instead of helping it improve.

 All the content of this article can be summarised by the complexity curve below:

 

To conclude, we have no choice but to accept that the more complex your business become, the less money you will earn. Thus, CEOs must pay more attention to what is happening when expanding a business. In effect, management has to evolve while your business is expanding and that is the reason why it is important to take into account all the consequences that can appear every time you make a decision. Complexity can be unstoppable and make your business go bankrupt if you do not act before it is too late. If you want to understand more about growing businesses, you can read Vivek Sood’s book, The 5-STAR Business Network (http://bit.ly/5-STARBN).

5 Business Boosters

When establishing a business strategy, CEOs and other executives often do it on random criteria. However, it is necessary to determine specific criteria and axes beforehand. In fact, every organization is particular and has its specificities, which implies different approaches in terms of strategies. The strategy you decide to implement has to be adapted to your business requirements. However, there are 5 key cornerstones that are the basis of successful strategies. They are defined and exposed in Vivek Sood’s book, The 5-STAR Business Network (http://bit.ly/5-STARBN). In fact, this book is entirely based on this approach of the 5 key factors that will help you build a great business strategy. The very essence of this book relies on business networks, and how they must be built. According to Vivek Sood, there are 5 stars that will enable you to build the best business network.

 The first one is  innovation or “Fire-Aim-Ready (FAR) Innovation”, as Vivek Sood defines it. This is the first cornerstone of your 5-STAR Business Network. Innovation have been existing for a long time, but this is a specific approach, on which every organisation must base its strategy. In fact, this book explains how to combine the key factors to be more efficient and effective, at the same time. Although innovation has already played great roles in business, like during the Industrial Revolution, this is not the same any more. Nowadays, innovation must be steady and specific, relying on your business area. Besides, it is not only about products, but also management innovations or strategy innovations can be found.

 The second star is “$eed-to-$tore ($t$) Efficiency”, a term that needs to be explained in more details, but we will dedicate an entire article to this term. To explain it shortly, $eed-to-$tore Efficiency relies on a good management of the supply chain and of the entire process, from procurement to storage and distribution. In fact, this is all about management, and its efficiency obviously.

 Then, Transaction Optimisation Profitability is also a key cornerstone. This is obviously about profit. With this expression, “5-STAR”, Vivek Sood explains how to capture the more profit you can, by using efficiently your business and supply networks. In fact, everything relies on your network. Networks are becoming bigger and bigger and they are now the main cause on which all your decisions and strategies depends. Transaction Optimisation Profitability (TOP) is the way you use your network to capture the greatest profit and value.

 The fourth key of your 5-STAR Business Network is Advanced Product Phasing (APP). This term will also be defined in a later article. What we can say for now is that APP is about product life cycle and innovation cycle. You must pay attention to them in order to act accordingly and make your business evolve in agreement with these cycles.

 Finally, the last one is Results-focused Outsourcing and Modularisation (ROM). This is quite a complex one, but also very important. Indeed, it will be the subject of Vivek Sood’s next book: Outsource, Outsmart, Outprofit. This term reveals the power of modularisation and networks will play a great role in this strategy establishment and implementation.

 Consequently, we have here the 5 key cornerstones of a great business network. They can now be defined as business boosters because they can push your business towards great results if they are well aligned and well used together.

by Anais Lelong