Equally it is also about your organisation’s ability to reshape how your suppliers interact with you each and every time you engage them.
To understand just how radical this idea is we need to go back to the beginning of the decade and take another look at how we thought the internet would change the way we do business. We need to take another look at what the eBusiness revolution was all about.
We all know that managing the growth of any business is difficult. It doesn’t matter how large or small the business is or at what stage of the business life cycle it is operating carefully managed growth is the key to long-term success.
The Business Life Cycle
Most manages today still associate growth with employee numbers. Successful businesses need to employ more people to cope with the increase in demand. However, large quantities of very good quality employees are rarely available at the right price at any time.
As the business grows so do the number of employees
Consequently the average skill level of your workforce declines dramatically as your business grows. Generally speaking the larger the company the lower the mean skill level of the staff.
As employee numbers grow the average intelligence across the organisation falls
To compensate for this industry wide lack of suitably qualified talent the successful business manages growth by introducing more and more policy and procedures. This means the success of the business evolves from being totally reliant on the talent and skills of a few specialists to the quality of the processes that drive the business.
Policies, Proceedures and Processes are introduced to improve the overall level of intelligence across the organisation
In a process driven business the business does not stop operating or growing just because an employee (however important) chooses to leave.
The opportunity that eBusiness represented back in 2000 was the automation of these processes. Thereby allowing the business to reduce its total number of low value employees.
The eBusiness challenge is to automate these policies, procedures and processes
The most successful eBusiness models were those that embraced the idea of IT not just managing the process but actually becoming the process.
It all depends where want your eBusiness strategy to take you
The pre-internet economy value equation was Smart Processes + Dumb People + Dumb Technology = Success.
The eBusiness value equation was Smart People create Smart Processes that utilise Smart technology to deliver improved speed to market capability and customer intimacy. So the opportunity for the large corporations was not in generating new revenues but in reducing the costs of existing processes between and within businesses.
The focus was on extracting the maximum return from your existing investment in people, people and technology. Or, put very simply, it was all about doing more with less.
So what’s changed? What is so different about the way we think today?
10 years ago the predominant idea was the corporation - and even the market place – was a fine tuned machine that need constant measuring, monitoring and managing to ensure it was fully optimised. A mechanised or better still computerised system of smart people utilising smart processes and smart technology to secure market leadership. That’s why executives and senior managers the world over were tasked with activity of monitoring their KPIs on their performance dashboards. eBusiness may have put the business on auto pilot but it still need the captain at the helm to keep a professional eye of the progress.
Today, 1o years on from the eBusiness revolution, everything we believed we knew and understood about how corporations work, and more importantly can be configured to make profits, has changed. So much so that we have moved well beyond the idea that making a smarter corporation is the answer to improving Productivity, Performance and Profitability. Today we see outsourcing and the networked supply chain as the answer to the 3 management P’s.
By 2020 I suspect we will see an even more fragment corporate entity as the global giants fragment even more into hundreds, if not a thousands or a millions entities that will be gathered together on an ad-hoc, as needs basis to meet the market demand as and when the opportunity arises … and the only thing that will be holding them together will be the Brand.
This means your most important asset in the future will be your Brand.
Today, thanks largely to the influence of Naomi Klein and the explosion of mobile/global communications, we think of the corporation not as a mechanical system but as a strange attractor. A dominant Brand identity that is strong enough and influential enough to be able to attract and aggregate on an ad-hoc, just in time basis the best customers, suppliers, investors and talent the market has to offer.
A Brand that is so influential it is able to reshape the competitive landscape in its own image (Think: Apple).
The message then for entrepeneurs and start-ups is to focus your energies on building the brand.
This after all is at the heart of the “Freemium” strategy. Forget cashflow, forget profits. Focus on keep yourself fast and agile. But most of all focus on building widespread recognition and support the Brand because it is your Brand that will allow you to remain fast and agile as your market share grows.
The message today is get the Brand right and the Customers, Investors, Innovations (Think: 3rd party App Developers), Cashflow and Profits will follow. (Think: Facebook and Twitter)
These are what I call - for fairly obvious reasons - Rainbow Brands.
Rainbow Brands exist because the convergence of mobile and desktop communications technologies (The MobCon) has created the ideal conditions that allow them to thrive.
Until recently agility (Read the flexibility to respond to the customer’s individual needs) and efficiency (Read the ability to respond on a just in time basis) were as compatible as oil and water. They just didn’t mix. You could be “either/or” but not “both/and”. Small Business was flexible. Big Business was efficient.
As the market share of any business they would form increasingly larger bodies of people and resources in centralise locations to service the client. They did this because having everything in one place significantly reduced the costs of conducting the individual and shared transactions that make up the day-to-day activity of producing the goods or delivering the service.
How the MobCon changes everything
The revolution in mobile communications and the internet has changed the economics of supply chain management and customer service to the point where it is now longer cost-effective to have all the resources in one location. It is more cost-effective to outsource these activities to specialised units. Over the next decade these specialised units have the potential to fragment even further into specialist individuals.
We have already seen this phenomenon in the services sector with the explosion in contract, freelancers and teleworkers who perform specialist tasks like research, design and book-keeping on an ad-hoc piece meal basis.
This then is the value proposition of the Rainbow Brand. It is both Agile and Efficient at the same time. Delivering a whole lot more for a whole lot less simply because it has the “personality” to excite, influence and then mobilise customers, suppliers, financiers and investors to work tirelessly on its behalf to open up brand new and highly profitable markets.
All businesses have to spend money to make money. The trick is to spend it after you have made it. That way you don’t have a cash flow problem.
After all, growth is a lot easier to achieve when your suppliers finance the manufacturing and delivery of your Branded product and all you have to do is get your loyal customers into the store to purchase the product within the 90 day payment window.
This then is the real value of investing all your energies in creating a Rainbow Brand. It allows you to dictate the terms of trade with your customers and suppliers and it allows you to redirect their energies and cash flow into building your Brand.
A successful Rainbow Brand allows you to do more, with more, on a promise of delivering more - sometime in the future - to everybody you do business with today… and that I would suggest is something money can’t buy. Need I say more? 
Posted on May 17, 2010
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