June 2007 Archives

If you're on top of your business, then sooner or later you will have to figure out what's happening in the world around you. After all, fresh information is typically the way to identify opportunities that can be availed of. In large organizations, this is what's called environmental scanning, and it ty pically involves having the corporate planning group gather data about the indu stry, the economy, and the market, among others. But for small enterprises, environmental scanning typically consists of the own er scrounging for any useful information that he or she can stumble upon. The n ewspapers become invaluable, as well as any bit of information that can be gath ered from peers and from industry folks. So how can an SME owner fine-tune the environmental scanning process? Here are some tips. 1. Network. And network aggressively. Simply put, the more people you know, the n the more information you can have a chance of stumbling upon. Participate in industry roundtables if any, meet with your suppliers, distributors and partner s, and engage in a lot of small talk. The kind of information that they may be able to share with you may surprise you. Take up golf, or any social activity t hat will give you access to quality people. 2. Read. Lots. And not just the newspapers. Find out what are the trends abroad via the internet. Pick up old magazines in related and unrelated industries. T he more diverse your reading material, the more you get access to information t hat is typically unavailable to others who are in the same industry. More impor tant, solutions that are presented in various literature may have a way of actu ally being applicable to your business as well, and when that happend, you may end up with truly innovative solutions. 3. Think. Lots. The more time you have to spare for deep thinking, then the mor e your brain has a chance of processing the information that you actually encou nter. Because environmental scanning is not just about gathering data, it's abo ut figuring out what to do with them. And if you're the head of an SME, then it looks like you're the only person around who can actually engage in this kind of high-level thinking. So allot a generous amount of time regularly for you to just sit and think or even to meditate. What you might uncover may amaze you.

Next time you think that that nice person you just met is being a pushover, thi nk again. He may be slyer than you think. Turns out that being nice is actually a strategy. For individuals, it is a surv ival strategy: by being nice, a nice person accumulates less enemies and even e nds up with a larger pool of allies whom he can count on over the long term. He doesn't get into fights in school, and he ends up with a lot of friends with w hom he can share lunch with. The same thing goes for businesses. "Nice" companies, characterized by CEOs who make it a point to minimize conflicts with other agencies, suppliers, partners and even with the competiton, end up having larger networks that they can coun t on. Thus, if the organization finds that it lacks in certain essential resour ces, it becomes viable to forge strategic alliances with partners who can provi de these. Not only that, but "nice" companies end up with less enemies, which means that they don't have to waste precious resources in fighting off competition and opp osition. Imagine for a moment the bloody price wars that used to happen between Coke and Pepsi--such fights were expensive. Now imagine Coke and Pepsi being f riendly competitors--not only do they need no longer fight each other tooth and nail, but they might even end up sharing industry tips and coordinating their pricing strategies. Of course, the idea of seeing competing companies being too chummy is also unco mfortable because this brings up visions of oligopolies or cartel-like behavior . But from the companies' perspective, such behavior actually makes more econom ic sense than to fight one another. At least from the perspective of preserving precious resources rather than wasting them on war-like behavior. So your grandmother was right after all. Being nice does have its rewards!

Small companies, especially micro ones, are characterized by having owners who tend to do everything themselves. Hands on, details-oriented, action-oriented - - these are the marks of a good business CEO. But as the company grows, things have to change by necessity. The most obvious change is that as demand for the company's product increases, the need for a la rger organization becomes more apparent. Less apparent for many CEOs, however, is that as an organization becomes larger , it becomes less practical for a CEO to be hands on, details-oriented, and act ion-oriented. Result: CEOs who still try to treat the business as if it was their own little serfdom when in fact the world has already become far too complex for just one person to control. What CEOs of firms in such growth zones should realize is that while operations have to be delegated, there is one function that cannot be delegated. That's t he planning function. And that's where the CEO should focus, rather than being stuck in the details-centric stage. The larger the organization, the more there is a need for a person who will do nothing but plan because everyone else will be too bogged down with the details to find time to plan, while at the same time the challenges and the environmen t of a large company becomes more and more complex. Which is why it makes so mu ch sense for the CEO to delegate all the work and just focus on the planning pr ocess. If you are the CEO of a fast-growing business, make sure that you are capable o f farming out your most pressing duties. Because the more time you spend planni ng, the better your firm has a chance of living up to future growth challenges.