Fast, flat and free: The new business order
The business landscape is increasingly changing, with industry models shaken, revenue streams turning volatile, and competition becoming hybrid.
Industry giants that have withstood the test of time are now seeing their customers moving to newer, nimbler industry players, changing how business is traditionally done. Business models that have existed for years are now under attack by changing consumer behaviors and technology, forcing them to either adapt to the trend or wither away into obscurity.
More changes are coming into the mainstream, with the organizations of tomorrow being a total reversal of the organizations of yesterday. Revenue streams that usually come from one source can now be offered for free by another up-and-coming firm. Companies that fail to live up to the new challenges put themselves at risk of obsolescence, from market leadership to market demise.
Thus, CEOs and business managers should be aware and look at these trends in the face, and must be able to anticipate the competencies and resources needed to evolve their companies to these changing times.
There are three glaring realities in business that companies have to prepare for in order to survive the next generation of consumers. In the new business order, everything will be fast, flat and free.
Instant answers
Fast because consumers of today are called Generation Now, where they know that they can get anything in an instant.
Flat because consumers that engage with organizations do not expect to wait, but want instant answers. Companies should make sure that their internal structures are flat enough to be dynamic and can respond to consumers, not within 24 hours, but in an instant when the customer wants them.
Free because companies are now changing their business models and trying to give products for free to customers who used to buy from them, and acquire business from an alternative source that would find value in the volume of customers getting products for free.
Speed is now the name of the game, as traditional distribution methods have become irrelevant, with customers defying them and now wanting to go straight to the manufacturers or service provider rather than go to aggregators.
Take the case of travel agencies whose value offering is being challenged, as consumers are now going straight to the airline companies and buying their tickets over the Internet. If this trend continues, we will see hordes of travel agencies going out of business.
At the same time, as the travel industry looks dumbfounded with the rise of budget airlines, suddenly, traveling has moved from the industry to the hands of the consumers. Through the Internet, people have become “travel agencies” on their own, booking their own flights, and finding the best deals online.
Given that an organization should now be made for speed, the organizational structure should also follow lest an organization wants to survive.
These are times where an average tenure of an employee is not 10 or 15 years, but three years. These are times when people do not wait five years to move one rank up the company, or companies having five different manager and vice president levels.
These are times where people move around the company and their industry in less than three years, finish their master’s degrees by 30 years of age, and do consulting work on the side.
An organization should be flat to ensure that decisions are made fast, with all benefits going towards the consumer. The organization of today has little structure, no official titles, and is focused on projects rather than hierarchy.
As power shifts towards consumers, the race for their recognition and wallets have become the name of the game, to the point of offering consumers free products and services.
‘Freemium’
Consumers of today are seeing the rise of products being offered to them for free, subsidized by another paying segment. In academic term, it is called a freemium model, where a segment gets a product for free but the price is paid for by another customer segment.
Take the case of Inquirer Libre, a free newspaper distributed at MRT and LRT stations. It is fully free to readers, but advertisers, who find value in reaching a targeted middle class market, are willing to pay a premium to advertise in it.
Software, consumer goods, and even fashion goods are being given for free to a targeted crowd, subsidized by a paying advertiser or brand that will find value in the exposure they get.
As technology becomes part of the lives of consumers, empowering them with limitless information and quick access to everything at their fingertips, companies should now ensure that their business structure and model would have evolved also to changing times and already changed consumers.
In the new world of business, times have changed. Consumers have changed. Businesses that did not evolve and change would find themselves losing their customers and eventually their market share, not gradually, but quickly.
Trends that every business is currently experiencing, supposedly far off, are becoming business realities. Companies that do not prepare for the convergent realities, are bound to wake up rubbing their eyes and asking what happened.
The Management Association of the Philippines recognizes the trends of today, and are bringing in the best speakers in the upcoming 9th MAP International CEO Conference.
Glaring business reality
These people are those who stayed ahead of trends and catapulted the institutions they are working for to achieve the success they are experiencing now. Learn from them, their business insights and experiences as they help us bring our companies to a sustainable and successful future.
Fast, flat and free is clearly a glaring business reality that all businesses should prepare themselves for. MAP, in its advocacy to elevate the level of management in the Philippines, is offering this conference to prepare business leaders for the future.
The MAP Conference will be held on September 13, Tuesday, from 8 a.m. to 6 p.m. at the Rizal Ballroom of the Makati Shangri-La. For inquiries/reservations, visit <www.mapceoconference.ph> or contact the MAP Secretariat at telephone number 7511149 to 52, or e-mail [email protected] or [email protected].
(The author is chairman of the MAP CEO conference committee and managing director of MRM Worldwide [Philippines]. Feedback at [email protected]. For previous articles, visit <map.org.ph>.)
